A Closer Look at Stadium Subsidies

The American magazine has an exposé on sport stadium subsidies, by Dennis Coates, reaching the conclusion that they do not result in broad economic growth:

My own research, conducted with economist Brad Humphreys (who is now at the University of Alberta), has used perhaps the most extensive data, incorporating yearly observations on per capita personal income, employment, and wages in each of the metropolitan areas that was home to a professional football, basketball, or baseball team between 1969 and the late 1990s. Our analysis tried to determine the consequences of stadium construction and franchise relocations while controlling for other circumstances in the local economy. Scholars Robert Baade, Allen Sanderson, Victor Matheson, and others have taken slightly different approaches, but the results are fairly constant from one analysis to another. There is little evidence of large increases in income or employment associated with the introduction of professional sports or the construction of new stadiums.

Indeed, my work with Humphreys finds that the professional sports environment—which includes the presence of franchises in multiple sports, the arrival or departure of teams, and stadium construction—may actually reduce local incomes. For example, we found that the overall sports environment reduced per capita personal income, a finding that was new in the economic literature at the time we published it (1999). We also found that, in many local economies, wages and employment in the retail and services sectors have dropped because of professional sports.

Here is more on stadium subsidies from NTU and the Tax Foundation.

Of course, the Rendell administration wants to give $50 million in taxpayer funding to a stadium in Chester, so I imagine they’ll just label all the critics “rabid conservatives” in order to ignore all the evidence.