Free Minds & Free Markets

Sports Stadiums Are Bad Public Investments. So Why Are Cities Still Paying for Them?

Joel Kotkin dispels some of the popular myths of stadium projects.

"Anybody that drives around Southern California can tell you the infrastructure is falling apart," says Joel Kotkin, a fellow of urban studies at Chapman University and author of the book The New Class Conflict. "And then we’re going to give money so a bunch of corporate executives can watch a football game eight times a year? It’s absurd." 

When the Inglewood City Council voted unanimously to approve a $1.8 billion stadium plan on February 24th, hundreds of football fans in attendance cheered for the prospect of a team finally returning to the Los Angeles area. 

On it’s face, the deal for the city of Inglewood is unprecedented—Rams owner Stan Kroenke has agreed to finance construction of the stadium entirely with private funds. The deal makes the stadium one of the most expensive facilities ever built and is an oddity in the sports world, where most stadiums require millions in public dollars to be constructed. 

And while the city still waits to hear if it will indeed inherit an NFL team, the progress on the new privately-funded Inglewood stadium has set off a bidding war between other cities that are offering up millions in public subsidies to keep (or attract) pro-sports franchises to their area. 

St. Louis has proposed a billion dollar waterfront stadium financed with $400 million in tax money to keep the Rams in Missouri. And the San Diego Chargers and Oakland Raiders have unveiled a plan to turn a former landfill in Carson, California, into a $1.7 billion stadium to keep the Rams from encroaching on their turf. While full details of the plan have yet to be released, it’s been reported that the financing would be similar to the San Francisco 49er’s deal in Santa Clara, which saw the team receive $621 million in construction loans paid for with public money. 

Even the fiscally conservative Scott Walker is not immune to the stadium spending craze. The Wisconsin governor wants to allocate $220 million in public bonds to keep the Milwaukee Bucks basketball franchise in the area. Walker has dubbed the financing scheme as the "Pay Their Way" plan, but professional sports teams rarely pay their fair share when it comes to stadiums and instead use public money to generate private revenue. 

Pacific Standard magazine has reported that in the last 20 years, the U.S. has opened 101 new sports facilities and stadium finance experts say that almost all of them have received public funding totaling billions of dollars. Politicians generally rationalize this expense by stating that stadiums will generate economic revenue and job opportunities for the city, but Kotkin says those promises are rarely realized. 

"I think this is sort of a fanciful approach towards economic development instead of building really good jobs. And except for the construction, the jobs created by stadia are generally low wage occasional work." 

"The important thing that we’ve forgotten is 'What is the purpose of a government?'" asks Kotkin. "Cities instead of fixing their schools, fixing their roads or fixing their sewers or fixing their water are putting money into ephemera like stadia. And in the end, what’s more important?"

Produced by Alexis Garcia. Camera by Garcia and Justin Monticello. Music by Jason Shaw

Approximately 5 minutes. 

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  • TheZenomeProject||

    All sports leagues exhibit some level of socialism, but the NFL never fails to amaze me at the extent of their socialist paradise. Special privileges and favors for owners by city officials, tax-exempt status from the federal government, and revenue sharing and hard salary caps for "parity" are all just the tip of the iceberg. And it needs to be said that football stadiums are a bad investment? When are publically funded corporate welfare compounds not? I've yet to see one.

  • John Galt||

    Rather than squeeze the rest of us for a few more dollars we can ill afford it just seems sensible to quit treating professional sports like it has some kind of religious exemption coming?

  • Francisco d'Anconia||

    **********LAZY FUCKING INTERN ALERT!**********

    Old comments.

  • CatoTheElder||

    You forgot about the extent that the NFL exuberantly celebrates and propagandizes for the government's military. A NFL event is reminiscent of the old video from the 1936 Olympics, except the NFL pageantry is even more militaristic.

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  • John Galt||

    Happy St. Patty's fellow anti public funded stadiums freaks. The rest of you (you know who you are you statist pigs) can pee off.

  • Stephdumas||

    I wonder if there'll be some angry ordinairy guys going after the football players and the owners teams like the Simpsons episode "Lisa the Beauty Queen"? ;-)
    (there a video of that episode on Dailymotion, the part begins at 13:42)

  • HeteroPatriarch||

    "Professional sports teams rarely pay their fair share when it comes to stadiums?" What is their fair share if not 100% of the cost? Even if the offending city nominally owns the stadium, city councils don't have the right to use other peoples' money to finance shit to benefit a small group of people. Let the team owners own the stadiums as well; more incentive for them to stay put anyway. If a stadium is actually a good investment, some private developer will build one.

  • ace_m82||

    city councils don't have the right to use other peoples' money to finance shit to benefit a small group of people

    "What are these 'rights' you speak of?" asks the masked man holding a gun to your head.

  • John Galt||

    Aren't the majority of team owners at least billionaires? I must be missing something, because it's not making sense why taxpayers end up stuck with much of the bill.

  • Jim Smithy||

    it makes sense because people keep voting for Republicans and Democrats

  • livelikearefugee||

    How do you think they got to be billionaires? Hint: they did it with other people's money.

  • Brochettaward||

    Because taxpayers have slavish devotion to their team largely based on geography, and politicians are generally so wimpy that they live in fear of being the guy who lost team x for city y.

  • CatoTheElder||

    The politicians also like the idea that their name is going to be on a big plaque to commemorate their term of public service. Politicians have big egos, and these egos have huge appetites. They can only be fed at the public trough, which must be continually replenished with fresh tax revenues.

  • gracejhom||

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    Because they are GOOD for getting re-elected and that happens way before anyone runs the financial numbers.

  • bassjoe||

    The city of Santa Clara is going to regret that deal for decades to come. Its tax base is microscopic to finance such an enormous project (approximately $5000 for every resident in the city, BEFORE interest). It doesn't really have much retail business activity or attractions besides the stadium to extract sales tax revenue from -- it's a bedroom suburb of a bedroom suburb with a bunch of office parks.

  • dunce||

    I do not believe any publicly funded stadium has ever made a profit. They always claim that hotels , bars , and restaurants increase revenues and thus taxes, but the claims do not bear scrutiny.

  • JeremyR||

    Well here in St. Louis, the claim is that the money will eventually be made back by income tax on players.

    The salary cap is like 141 million, plus another 10 or so for coaches, and the state income tax in Missouri is 6%, so that's nearly 9 million a year from salaries.

    And the current stadium we have was paid for with bonds. So it's not really like the taxpayers paid for it directly.

  • bodenlosen Schweinerei||

    And the current stadium we have was paid for with bonds. So it's not really like the taxpayers paid for it directly.

    I know it's an old comment, but Ho Lee Phuk, how can you deal with stupid like this? This is the kind of financial illiteracy you face whenever you attempt to argue against these boondoogles.

    the money will eventually be made back by income tax on players.

    Assuming they live in the state, or is it one of those Euro-style "tax 'em where the money is earned" deals?

  • JeremyR||

    Because people like sports? It's hard for some to grasp, but some people really, really like them.

    Beyond that, in St. Louis, basically that whole area around the proposed stadium is blighted. Go watch Escape from New York. That was shot in St. Louis. That was 30+ years ago, things have only gotten worse in that time.

    Is it really a waste of money to build something people will actually use, albeit only maybe 10 times a year, as opposed to something where only Snake Plisken dares to venture?

  • Vulgar Madman||

    If people like sports, why can't they pay for it themselves?

    Maybe we need separation of sport and state.

  • wareagle||

    Is it really a waste of money to build something people will actually use,

    because a stadium that requires me to buy an expensive ticket in order to go inside 8 times each fall is totally the same as a public space I can use at no per-visit cost any time I want.

    If the city wants to rehab a bad area, let it go around town and find investors.

  • Brian||

    "Is it really a waste of money to build something people will actually use, albeit only maybe 10 times a year, as opposed to something where only Snake Plisken dares to venture?"

    Sure, you pay for it.

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  • RealCrankyYankee||

    Here in CT, most sports fans align themselves with Boston and/or New York teams so the city of Hartford plans to spend $56 million to build a stadium to keep a MINOR league baseball team in the state. Go figure. The New Britain Rock Cats (previously affiliated with the Red Sox, I think now are the Colorado Rockies) announced their choices in the local paper today for a new name for the team:

    "The decision is between Hedgehogs, Praying Mantis, River Hogs, Whirlybirds and Yard Goats"

    Add this kind of stupidity to the insane tax rates, crazy gun control lobby, worst roads in the country, the GMO labelers, mandatory flu shots and . . . the list goes on and on. Why the fuck I stay here, I don't know.

  • Marty Feldman's Eyes||

    If they don't pick Yard Goats I will be severely disappointed.

  • Beautiful Bean Footage||

    If they go with that name they have to affiliate themselves with the Cubs.

  • kevrob||

    They picked Yard Goats. It is a reference to the engines used to move rolling stock around a railroad yard, and meant to be a reference to local history.

    Seeing as how Hartford is a state capital, they should have chosen between Corrupt Democrats and Bluenose Republicans, or perhaps Crooked Underwriters, to "honor" the insurance industry.

    Kevin R

  • levelplayingfield||

    Years ago, I vividly recall the billionaire owner of some hapless sports franchise bemoaning the fact that after another team bestowed a single player with the first $150 million conrtact, he "couldn't compete in the marketplace."

    I remember thinking,"How do you think us taxpayers feel?"

    We've been sucked into their vortex for so long that they actually think that they deserve it!

  • Francisco d'Anconia||

    Fuck all sportsball.

    It's a business. If it can't cover its overhead, its a failed business.

  • Plàya Manhattan.||

    Are you up for a good game of kick the can?

  • Notorious G.K.C.||

    In the case of the Duke Boys vs. Boss Hog, the US Supreme Court will decide whether you have a right to a Confederate Flag license plate.

    (yes, I know the Duke boys had their flag on *top* of their car, just work with me here)

  • Rhywun||

    I would just go back to one plate design for all. I know states like them because they bring in more money but goddamn it I'm sick of politics being dragged into everything.

  • Zeb||

    Vanity plates seem fine. But it is amazing some of the things states are putting on their plates.

    I kind of like how they do it in Europe. The number plate gets screwed to a car and stays with that car for good.

  • Pro Libertate||

    Sports Stadiums Are Bad Public Investments. So Why Are Cities Still Paying for Them?

    Because the free market and limited government are dying, and crony "capitalism" is an inevitable result.

  • Plàya Manhattan.||

    I look forward to the $8 drinks and $12 hot dogs.

  • Rhywun||

    The players look forward to higher-quality hookers and blow.

  • Notorious G.K.C.||

    Oh, you mean "miscellaneous entertainment expenses"?

  • NidhoggRocketman||

    Bread and circuses.

  • wareagle||

    I keep wondering when Reason will have a piece about taxpayer money going toward stadiums. Said absolutely no one who's been here more than once.

    Give it a rest, guys. You are preaching to the choir on this one.

  • Zeb||

    Except for things on abortion, gay marriage and immigration, they are pretty much always preaching to the choir.

  • Sevo||

    "So Why Are Cities Still Paying for Them?"

    Because the money doesn't belong to the people spending it.

  • Winston||

    New York City Construction Coordinator Robert Moses, however, sought to force O'Malley into using a site in Flushing Meadows, Queens – the eventual location of Shea Stadium. Moses's vision involved a city-built, city-owned park, which was greatly at odds with O'Malley's real-estate savvy. When O'Malley realized that he would not be allowed to buy a suitable parcel of land in Brooklyn, he began thinking of team relocation.

    O'Malley was free to purchase land of his own choosing but wanted Robert Moses to condemn land along the Atlantic Railroad Yards (O'Malley's preferred choice) in downtown Brooklyn under Title I authority. Title I gave the city municipality power to condemn land for the purpose of building what it calls "public purpose" projects. Moses's interpretation of "public purpose" included public parks, public housing and public highways and bridges. What O'Malley wanted was for Moses to use Title I authority, rather than to pay market value for the land. With Title I the city via Robert Moses could have sold the land to O'Malley at a below market price. Moses refused to honor O'Malley's request and responded, "If you want the land so bad, why don't you purchase it with your own money?"[23]

    So can we blame this on Robert Moses?

    Los Angeles offered him what New York would not: a chance to buy land suitable for building a ballpark, and own that ballpark, giving him complete control over all its revenue streams.

    My my, how things have changed.

  • kevrob||

    Unfortunately, LA took that land, by eminent domain, from a thriving, working community of Mexican-Americans through eminent domain.

    I stlll call the ballpark "Chavez Ravine." The Dodgers ceased to exist once they left Brooklyn.

    Ratner built the Barclays Center just where O'Malley wanted his new baseball park.

    Kevin R

  • SQRLSY One||

    I have to pay for ritualized violence by sports super-heroes whether I like it or not. The Voters Said So...

    On the other hand, if I like to pay my own freely-given money for a lap dance of ritualized sex, at the local titty-dance bar, or naked dwonky dancers (AKA Chippendales) depending on my sex, or the local Shakers of their Epandriums if I am an Insectoid, Etc.-Etc.-Etc. Ad Naseum, then the local vice squad is going to PUNISH me at taxpayer expense! What if I have a RELIGIOUS belief that "making love" is better than "making ritualized war"? ... Does ANYONE give a shit? Does Government Almighty give a shit? Does the Pope shit in the woods??!!?!?! Does Government Almighty REALLY-REALLY love me more than I love myself?

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