Feb 27
How come State and Local governments subsides sports teams to build stadiums? ?
chicago2210 asked:
Why do state and local governments subsidies Professional sports teams build stadiums under the threat to relocate? If the owners can pay the players million dollar salaries then can’t thy affordid to pay for a new staduim out of their own pockets?
Why do state and local governments subsidies Professional sports teams build stadiums under the threat to relocate? If the owners can pay the players million dollar salaries then can’t thy affordid to pay for a new staduim out of their own pockets?
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3 Responses to “How come State and Local governments subsides sports teams to build stadiums? ?”
If the city government thinks it will be a “net win” for the taxpayers (to give those owners money and keep them in town) then it may be a smart move.
The same governments do the same thing with large companies that are thinking of building factories.
I **** the whole idea of the subsidy like you seem to, but I don’t know how we can prevent cities or states from doing it.
The cost of developing a $ billion stadium is huge. And the risks that sometime in year 2 of building the complex, that an anti-development group springs up to stop the whole thing always exists. The risks are huge on a project this large. Also, most team owners don’t have the expertise to attempt a project of this magnitude.
That’s why the local governments build these projects. They have access to the politics and ties to local communities, they have far greater access to the finance, and the governments have experience managing civic works projects of this scale.
The benefits of these stadiums from a pure financial perspective is usually very good. New pro stadiums draw fans to games, and all revenues from these games are taxed in states that have sales tax. There are also income taxes that are collected by the state, directly related from the team personnel. The largest benefit, however, is the direct effect that these games have on the local economies from both local as well as out of town visitors for these games. Finally, these stadiums also have additional uses by the local governments as venues for other events.
A modern state of the art stadium is a really good investment in the right markets. These also keep their teams local. Should the team elect to leave, the stadium is a good incentive to lure other teams to the host city.
I have no idea why state and local governments would waste taxpayers’ money on a non-essential entertainment business that benefits such few people. Like convention centers, these development scams seem to be more about city leaders’ egos.
My city, Portland, OR, which supports so many questionable developments, has not (yet) fallen for a major pro-sports development (although was burned in a minor league baseball stadium remodel deal). The Portland Trail Blazers’ mega-wealthy owner Paul Allen basically built and financed his own arena project in the 1990s (the city made a few relatively minor concessions such a land, street, and parking garage). A few years ago, Allen drove the arena into bankruptcy and threatened to move the team in order to force the City to bail-out the team and arena, but the City refused. And so far, the City has yet to fall for any rumored Major League Baseball deal and any such deal would likely have to be approved by voters.