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The New Stadium Lie

This week, we in Phoenix are supposedly getting our payoff for subsidizing the hapless Arizona Cardinals with a billion dollar football stadium that is used for its intended purpose (football games) for 33 hours per year  (3 hours per game times 11 games:  2 Cardinals pre-season, 8 home regular season, Fiesta Bowl).  In exchange we get a nicer stadium (if I were to want to see a Cardinals game live) but worse TV options (because instead of the best game of the week, we have to see our home team).

The big selling point, the cherry on top of the sundae the NFL uses to push new stadiums, is a Superbowl.  Which is in town this week.  So far, the huge economic stimulus has not really poured into our household, but I guess I need to be patient.  Anyway, the timing seems good to link this article, which comes via the Sports Economist:

If you build it, they will come. This is usually the mantra of those in favor of publicly financed sports stadiums, including the current proposal for a new soccer stadium in Chester. In this case they are visitors whose spending would turn devastated cities and neighborhoods into exciting destination points. Local schools, merchants, and residents all would benefit as municipal coffers swelled.

There's only one problem with this scenario. It's not true. Never has been. They do come, but cities are not saved. Over the past two decades, academic research has generated literally hundreds of articles and books empirically challenging the alleged economic wonders of new stadiums, even when they're part of larger development schemes. I have been studying and writing about publicly financed stadiums for more than 10 years and cannot name a single stadium project that has delivered on its original grandiose economic promises, although they do bring benefits to team owners, sports leagues and sometimes players....

Why, then, given the overwhelming academic research challenging stadium-centered economic development do political leaders (if not average citizens) still support such projects? In a just-released article in the Journal of Sport and Social Issues, my colleagues and I studied media coverage of 23 publicly financed stadium initiatives in 16 different cities, including Philadelphia. We found that the mainstream media in most of these cities is noticeably biased toward supporting publicly financed stadiums, which has a significant impact on the initiatives' success.

This bias usually takes the form of uncritically parroting stadium proponents' economic and social promises, quoting stadium supporters far more frequently than stadium opponents, overlooking the numerous objective academic studies on the topic, and failing to independently examine the multitude of failed stadium-centered promises throughout the country, especially those in oft-cited "success cities" such as Denver and Cleveland.

I can attest to the latter.  During the run up to various stadium-related referenda, the media was quite rah-rah for the stadium subsidies.  In fact, on radio, several talk show hosts denigrated voters who opposed the stadium subsidies as "stupid old retired people."  I remember calling in to a couple of talk shows opposing the stadium bills and being treated like a Luddite.

My article on sports team relocations and stadium subsidies as a prisoners dilemma game is here.

Posted on January 30, 2008 at 10:18 AM | Permalink

Comments

It's only b/c we didn't spend enough on that stadium to do it right.

Posted by: JoshK | Jan 30, 2008 10:56:15 AM

If you want to see some stimulus, you'll have to rent your house out for the weekend.

Posted by: Craig | Jan 30, 2008 11:12:54 AM

The same thing happened here in DC when the Washington Nationals came to town. There was open suppression of anti-stadium views by local print and broadcast media. When the Cato Institute held a forum to discuss a study critical of the stadium, the Washington Times ran a smear piece that refused to discuss the merits of the study and instead denounced Cato for refusing to understand how the "soul of the city" would be saved by baseball. Some media outlets went so far as to sponsor pro-stadium events in conjunction with the mayor's office.

Posted by: Skip Oliva | Jan 30, 2008 11:44:28 AM

The obvious fact that having big name sports teams in town is in the local media's best interest is one side of the story that never is told. A pro sports teams, and particularly pro sports teams in season 12 months out of the year, generates big revenues for these companies. For print media, the value of your sports page probably increases by a factor of 1000. Whole radio and television advertising opportunities arise.

Posted by: Mark | Jan 30, 2008 12:09:33 PM

Excellent point, Mark. During the DC debacle, I got into an off-air argument with a local radio host where I made exactly that point. He denied any self-interest and started reciting the generic BS about local economic development.

Posted by: Skip Oliva | Jan 30, 2008 12:43:32 PM

Denver is a success? Invesco and Pepsi Center have done nothing. Are people talking about Coors Field as a success?

Posted by: Allen | Jan 30, 2008 9:22:48 PM

Some of us love watching and an avid fan of different sports, it can be football, sumo wrestling or baseball. If you’re a seasoned baseball fan, or any pro sport for that matter, you’ve probably heard the expression “holding a city for ransom.” In general terms, this means that team ownership is always on the lookout for increased profits, even if they’re shelling out as much in payroll as teams like the Los Angeles Dodgers, Boston Red Sox and New York Yankees. They will threaten to pull their team out of the city and move elsewhere unless the city and its taxpaying base meet the team’s demands. Nearly without fail, this demand is the greatest way to create “buzz” that brings the fans out in droves: building a new stadium. This may seem like an expensive endeavor, but not necessarily for ownership. New stadiums are, in fact, financed by taxpayers like you and me. In a very interesting USA Today story, you can get a sense of how astronomical the numbers can be. According to Gary Thorne, “The Yankees have already received $942 million in tax-exempt bonds for the construction of the new Yankee Stadium. They are seeking another $366 million in such bonds.” Joe Taxpayer pays it all for. Congressional Subcommittee Chair Dennis Kucinich (D-Ohio) nails it by saying this ransoming is a “transfer of wealth from the many taxpayers to a few wealthy owners.” If you value pro sports as much as I do, you may see this as a necessary evil, but Congress wants to change that system. When it comes to financing, it doesn’t seem fair. Honestly, if you take out payday installment loans, do you expect someone else to pay them back for you? No, and neither should baseball owners. Let’s hope this system of highway robbery gets fixed before average fans can no longer afford to follow their favorite sport. Click to read more on payday installment loans.

Posted by: Lisa P | Nov 25, 2008 10:06:44 PM

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