Community leaders are beginning to question the economic value sports stadiums really bring to their area. More and more the answer appears to be not much, if any.
When owners of professional sports teams want to build a new stadium, they invariably argue that the new stadium will be a boost to the local economy. Regardless of the cost or financial burden that could be placed on the taxpayers of that community, the team owners will say, “Don’t worry about it. The place will pay for itself through increased business, new jobs and tax revenue.”
If you believe that, there’s a bridge in Brooklyn you can buy too.
Take professional football owners and their never-ending desire for newer, bigger and better stadiums. A study by the Stanford Institute for Economic Policy Research organization shows that NFL stadiums do not generate significant local economic growth or additional tax revenue to cover any financial obligation taken by the city to construct the facility.
Even worse, NFL teams are infamous for pulling up stakes and moving to other cities before these stadiums are paid off. Who is left holding the financial burden? The taxpayers, of course.
Most football stadiums are a particularly bad investment for cities to make. They are only used around ten times a year for home games and possible play-off games. Because of the unique configuration of the buildings, most of the older stadiums are not compatible for other events. Consequently, they sit empty and produce no economic benefit for the community 90 percent of the time.
Even the Dallas Cowboys’ owner and general manager, Jerry Jones, needed help in paying the $1.2 billion construction costs of their new stadium. Arlington taxpayers paid $325 million of that cost and approved an increase of the city’s sales tax by 0.5%, the hotel occupancy tax by 2%, and car rental tax by 5% to recover that expenditure. In this case, the stadium will add to the local economy through jobs and added business. This is a rare exception, however.
Professional baseball stadiums are a different animal. Most ballparks add to the local economy through the creation of jobs and bringing fans into the area. In addition, baseball teams play at least 81 home games as compared to 8-10 for professional football. The added utilization means more efficiency and income generation for the team and the community.
In essence, the era of the “super stadium” appears to be over. New stadiums will probably be smaller but more luxurious and aimed at attracting the higher income fan. With the income television now brings to all sports franchises, the need for community taxpayers to finance the new venues may be drawing to a close. That’s a good thing.