Should cities shell out for stadiums?

There's been a rapid rise in the use of taxpayer money to help finance new and renovated sports venues. But do these projects make good financial sense for the communities involved?

By Bruce Kennedy Feb 5, 2013 8:08AM

Image: Atlanta -- Travel Ink/Digital Vision/Getty ImagesJust how important is it for a major U.S. city to have a state-of-the-art sports stadium?


It's a question many municipalities across the country are facing as they come under pressure from sports leagues and team owners looking for help in footing the bill for renovated or new facilities.


A case in point: The owner of the NFL's Atlanta Falcons, billionaire and Home Depot (HD) co-founder Arthur Blank, has been dropping hints that the team might move to Los Angeles. And those rumors have been sparking pandemonium in the local media and among city and state officials.


Georgia Gov. Nathan Deal says it's “incumbent on us” to keep the Falcons in Atlanta. But as the Atlanta Business Chronicle notes, "Deal stopped short of saying whether the Los Angeles factor could improve the current negotiations between the state and the Falcons on the financial deal to build a new $1 billion stadium."


The past several decades have seen a rapid rise in public-private partnerships for stadium renovations or new construction.


"Dallas Cowboys owner Jerry Jones now controls a $1.15 billion stadium that Arlington, Texas, voters helped finance with increases in sales and hotel taxes,” notes a recent Associated Press report. “In Indianapolis, the state owns 4-year-old Lucas Oil Stadium, for which the state, city and surrounding counties covered most of the $720 million construction cost.”


But some groups are balking at these tactics. The advocacy group Common Cause Georgia says it now opposes any public funding used in the construction of a new Atlanta stadium and plans to introduce a bill to stop the state's hotel-motel tax from financing the sports facility.


In a blog post on the organization's website entitled "Please don't bluff, Mr. Blank," Common Cause Georgia's executive director calls on Blank to show that he is negotiating in good faith.


And this issue hasn't gone unnoticed by some skilled journalists.


Joanna Cagan and Neil deMause, co-authors of "Field of Schemes: How the Great Stadium Swindle Turns Public Money into Private Profit," track on a companion website for their book what they describe as the "roughly $2 billion a year in public subsidies that go toward building new pro sports facilities."


In an interview with Baseball Daily Digest, deMause said while there is usually a several-year-long "honeymoon period" for teams playing in a new stadium, attendance usually drops back to previous levels once the new venue becomes old hat.


The bottom line, he says, is that “taken as a whole, stadiums and arenas almost never pay their own way. It’s why teams pretty much never give in and build stadiums with their own money -- the payoff isn’t so much in the stadium (which is a money-loser) as in the subsidy.”


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26Comments
Feb 5, 2013 2:15PM
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Why should taxpayers have to gift tens and even hundreds of millions of dollars to billionaires? Why not let the normal economic forces determine what type of a stadium/arena is built? Whatever ownership determines is a good investment, funded by themselves and/or private loans, that is what gets built.

I thought the rich wanted a free market without government intervention.

Arthur Blank: Billionaire and welfare queen!
Feb 5, 2013 3:42PM
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As long as owners think they can grab public money they will do and say anything to get it.  Then the taxpayers keep paying for it forever.  As a side note, I don't see how a broke city like Los Angeles in a broke state like California could ever build a new stadium for the Falcons. They let the Rams go east because they wouldn't build them a new stadium !  Worse, when the taxpayers do build them a stadium, we also have to pay big money for a ticket !     No, pass on public financing......let these teams play in a public park for all I care ! 
Feb 5, 2013 2:30PM
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If sports stadiums in and of themselves generate so much revenue, why would team owners and sponsors even want local government in on the take? Why buy the cow if the milk is free =)
Feb 5, 2013 12:54PM
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The NFL uses the threat of moving to LA as leverage.  I live in Minnesota and heard the vague threats.  Note, these threats never come from "official" team sources.  The NFL will not abandon the Atlanta market.

Georgia, if you want to know what will happen next, look what happened in Minnesota.  It gets real interesting when Roger Goddell visits dangling a Super Bowl.   Then a legislator suggests electronic pull tabs (gambling) as a way to fund it.  Then you hear about the awesome stadium waiting for them in LA.  What you don't hear is the owner will have to spend a billion dollars of their own money to help build the stadium in LA.

Finally, do you really think the NFL is going to just let a team move to LA?  No, the NFL wants the $1.2 billion franchise fee  for the new team.
Feb 5, 2013 6:13PM
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NO!! The teams and the owners have the money.  The average taxpayer can barely put a roof over his head and feed the family.  Many work multiple jobs and will never make what these overgrown toddlers make.  Let them pay their own way.  Keep the government out of my life. 

Feb 5, 2013 5:17PM
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If a professional sports team wants an arena or stadium, let them fund it themselves. If they want to leave town because the citizens balk at paying for an arena or stadium, let them go. Far as I am concerned, the same goes for college sports.
Feb 5, 2013 11:43AM
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georgia should drop the hint back to the falcon's owner that the georgia dome was build with public funding and it in the interest of georgia that the falcon's stay in atlanta.  since the marriage has been made georgia would have no choice except to  envoke the laws of eminate domain to protect the georgia taxpayer.

Feb 5, 2013 5:31PM
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Don't worry Atlanta, LA fans would not support an NFL team.
Two have already failed. The rich owners are just trying extortion as a means to get a freebie new stadium at the taxpayers expense. Hold your ground and tell the owners to stick it!
Feb 5, 2013 5:26PM
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No, it should be private investors not public taxes.  
Feb 5, 2013 3:46PM
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I think it is great that Stadiums are paid for with public funds and if the game is not sold out the people who paid for the stadium can not see it on tv. What's with that? The NFL and the team owners have a good gig going on here.

 

 

Feb 5, 2013 3:41PM
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No.   If it were such a good deal, the stadiums would have been funded by investor groups years ago and groups would be standing in line for the next one.

 

Similar to a general partnership.  At the offering the general partner has the experience and the investors have the money.   After a few years the investors have the experience and the general partner has all the money.

Feb 5, 2013 3:54PM
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No but here in Omaha Nebraska we do. They got rid of a nice stadium that was still good to use and was only used 2 weeks out of the year for the world series baseball. But no the city wanted a new stadium and us tax payers are now paying for it.
Feb 5, 2013 8:49PM
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There should be NO tax dollars spent on ANY sports franchise! That would include infrastructure (Road, water, electric, new intersections etc.) If the fans cannot afford to go to the games due to the price of tickets, even after being taxed to death for the "team", then it should not be built, they won't come!
Feb 5, 2013 5:55PM
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WE have two big losers in Fort Myers Fl .our county commissioners,keep throwing our money at these egotistical teems of losers. Oh ya Fl gov,t is as bad or worse than up North. Spend ,spend,spend and tax, tax,tax is the mantra.
Feb 6, 2013 1:38AM
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Comingling of public and private is a bad idea. Let the marketplace set the agenda. If the financial potential is there, the private sector will come up with the money to build a stadium. Why gamble tax dollars on the "if come"?
Feb 6, 2013 2:01AM
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  The NFL (or any American Pro sport league) has never made a dollar for any American city.  Draw a circle 25 miles around every NFL city.  Virtfually every single dollar that that team takes in every year comes from inside that circle  (yeah, there are pennies [comparitively] taken on tv rights, from other places, that the league brings in, as well, but it's pennies.)!  Jacksonville is my example.  The Jags have been here over 15 years.  I have yet to hear of a single employer bringing a factory, or HQ to town (with its payroll, etc) that came here because of the Jags.  It's a nice bonus, for some, but they come for the "special deal" they get from the city, or the state, or the low taxes, or the sunshine, or the great schools (sarcasm), but locating somewhere besause of a pro-football team?  Give me a break.

 

And, any time they start talking about special events (Super Bowl, World Series, Olympics, etc)  grab your wallet tightly (with both hands!).  You are about to be treated to "creative bookkeeping" by masters at the game,  ( A place to start, most Hotel-Motels operate at 75-85% full levels-- so a SUPER_SUPER event can't increase you room rentals more than about 25-30% [while they usually get credit for 100%!] )  The people who get rich from a free factory (er, stadium) are first, the owners, second, the players, last, the public!

Feb 6, 2013 2:00PM
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Let the teams and the owners spend THEIR OWN MONEY because they are the ones who benefit from a stadium. If I wanted to improve my business as a private citizen, then I spent MY MONEY to do so unless I could show investors that it is worthwhile for them to invest.
Feb 6, 2013 12:51PM
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Absolutely not. But if they do money MUST be paid back with interest as a loan NOT a give a way. This is a blatant way to rob tax payers for the elites special people to make profits and powerful friends. This is beyond corrupt.
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Absolutely not. It is not a government function to finance sports venues or stadiums. PERIOD!

 

No matter how much publicity the owner do, and how many lobbyist they hire, or however much the politicians tell you it is good for the future, the truth is it is not. It is good for the pockets of a few politicians, contractors and team owners.

 

Cities have better uses for the money: How about education, how about hospitals.

 

This is my humble opinion.

 

 

Feb 5, 2013 9:06AM
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THE SIMPLE SOLUTION HERE WOULD BE TO BUY BACK ALL THE BOATS, LICENSES, GEAR AND SUCH FROM THE FAMILIES THAT ARE BEING PUT OUT OF BUSINESS....I MEAN SEEMS FAIR TO ME . THESE FAMILIES NEED TO EAT AND SURVIVE JUST LIKE THE COD... THE U.S. GOVERNMENT BOUGHT BACK THE TOBACCO INDUSTRY FROM THE FARMER SO WHY NOT THE FISHERMAN...I SEE SO MUCH CONCERN HERE FOR THE COD FISH HERE, WHERE'S THE LOVING CONCERN FOR THE COMMERCIAL FISHERMAN? HE IS THE ONE WHO IS ENDANGERED HERE...NOT THE FRIGGIN' FISH.

AND HOW MANY GOVERNMENTAL MARINE  FISHERIES JOBS CAN WE NOW EXPECT TO BE ELIMINATED FROM THIS QUOTA CUT ACTION? DAM SURE DON'T NEED THESE SALARIED POSITIONS ANY LONGER...

THIS ACTION IS JUST THE TIP OF THE ICEBERG OF ELIMINATING ALL HUNTING AND FISHING WITHIN THE U.S.   THEY TAKE AND TAKE AND TAKE...TIL THERE'S NO MORE TO TAKE....AND TRUST ME, IT'S COMING...
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