# Should sports arenas be left to the private sector?

**URL:** <https://boards.straightdope.com/t/should-sports-arenas-be-left-to-the-private-sector/764672>\
**Category:** Great Debates\
**Created:** [September 1, 2016, 4:48pm UTC](https://boards.straightdope.com/t/should-sports-arenas-be-left-to-the-private-sector/764672 "2016-09-01T16:48:40Z")\
**Posts on this page:** 20\
**Page:** 3

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**Author:** ![snowthx](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/snowthx/32/10660_2.png) [@snowthx](https://boards.straightdope.com/u/snowthx)\
**Post date:** [December 11, 2023, 7:09pm UTC](https://boards.straightdope.com/t/should-sports-arenas-be-left-to-the-private-sector/764672/41 "2023-12-11T19:09:34Z")

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Not One Penny Ever! (NOPE!).

[Field of Schemes](https://www.fieldofschemes.com/) is keeping up with the current dramas.

Here’s their take on the [OKC issue](https://www.fieldofschemes.com/category/nba/oklahoma-city-thunder/).

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**Author:** ![Jasmine](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jasmine/32/2964_2.png) [@Jasmine](https://boards.straightdope.com/u/Jasmine)\
**Post date:** [December 11, 2023, 7:22pm UTC](https://boards.straightdope.com/t/should-sports-arenas-be-left-to-the-private-sector/764672/42 "2023-12-11T19:22:00Z")

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> [@ISiddiqui](#):
>
> Obviously a lot of elected officials are scared to let sports teams go because they feel it would mean their jobs.

The threat of moving used to be a very real one, but all the markets worth being in are already occupied by franchises. If the Bears said, “build us a stadium or else”, I’d say, “go ahead and move”. Where could they possibly go that would be better than Chicago?

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**Author:** ![ISiddiqui](https://avatars.discourse-cdn.com/v4/letter/i/97f17d/32.png) [@ISiddiqui](https://boards.straightdope.com/u/ISiddiqui)\
**Post date:** [December 11, 2023, 7:52pm UTC](https://boards.straightdope.com/t/should-sports-arenas-be-left-to-the-private-sector/764672/43 "2023-12-11T19:52:25Z")

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You say that, but 2 teams from the SF-Oak Bay Area just moved to Las Vegas. Teams will move where they’ll get money.

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**Author:** ![snowthx](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/snowthx/32/10660_2.png) [@snowthx](https://boards.straightdope.com/u/snowthx)\
**Post date:** [December 11, 2023, 8:11pm UTC](https://boards.straightdope.com/t/should-sports-arenas-be-left-to-the-private-sector/764672/44 "2023-12-11T20:11:02Z")

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And a 3rd team moved from Oakland to SF (Warriors), leaving OAK bereft of any major league sports teams. Another recent example is the Chargers moving from San Diego to Los Angeles. History is full of teams who moved cities when their emotional leverage wasn’t working on city governments.

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**Author:** ![Robot\_Arm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/robot_arm/32/18280_2.png) [@Robot\_Arm](https://boards.straightdope.com/u/Robot_Arm)\
**Post date:** [December 11, 2023, 10:26pm UTC](https://boards.straightdope.com/t/should-sports-arenas-be-left-to-the-private-sector/764672/45 "2023-12-11T22:26:47Z")

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> [@PastTense](#):
>
> The issue is coming up again in Oklahoma City:

The current arena opened in 2002, and was renovated when the Thunder moved there in 2008. Apparently in only takes 15 years to go from state-of-the-art to a dump in need of replacement.

According to the link @snowthx posted, the deal they’re trying to approve now includes a promise for the team to stay until 2050. Imagine what a shithole the new arena will be in 27 years.

What a shame for Oklahoma City if someone were to kidnap the team they have rightfully stolen.

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**Author:** ![Chisquirrel](https://avatars.discourse-cdn.com/v4/letter/c/6bbea6/32.png) [@Chisquirrel](https://boards.straightdope.com/u/Chisquirrel)\
**Post date:** [December 11, 2023, 10:36pm UTC](https://boards.straightdope.com/t/should-sports-arenas-be-left-to-the-private-sector/764672/46 "2023-12-11T22:36:55Z")

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> [@Robot\_Arm](#):
>
> Apparently in only takes 15 years to go from state-of-the-art to a dump in need of replacement.

Nobody tell the Packers or Cubs that. I’m pretty sure my bank account will outright leave me if there’s another stock sale.

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**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\
**Post date:** [December 11, 2023, 10:38pm UTC](https://boards.straightdope.com/t/should-sports-arenas-be-left-to-the-private-sector/764672/47 "2023-12-11T22:38:01Z")

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What may be new since this thread was originally opened is that sports arenas are not just single buildings now. They’re the centers of “entertainment complexes” with restaurants, stores, hotels and even housing and office space. The New York Times ran an [article](https://www.nytimes.com/2023/12/10/business/dallas-mavericks-sale-mark-cuban.html?unlocked_article_code=1.FE0.qGhC.heNKsfSr40oX&hpgrp=ar-abar&smid=url-share) (gift link) about this the other day, focusing on the reasons that Mark Cuban chose to sell a majority share in the Dallas Mavericks.

So to a certain extent, the team owner is also a real estate developer and I think they should not be given public subsidies to make it easier to make even more money.

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**Author:** ![Kent\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kent_clark/32/105_2.png) [@Kent\_Clark](https://boards.straightdope.com/u/Kent_Clark)\
**Post date:** [December 11, 2023, 10:56pm UTC](https://boards.straightdope.com/t/should-sports-arenas-be-left-to-the-private-sector/764672/48 "2023-12-11T22:56:34Z")

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> [@Robot\_Arm](#):
>
> Apparently in only takes 15 years to go from state-of-the-art to a dump in need of replacement.

That was the Rams’ argument for leaving St. Louis.

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**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\
**Post date:** [December 11, 2023, 11:10pm UTC](https://boards.straightdope.com/t/should-sports-arenas-be-left-to-the-private-sector/764672/49 "2023-12-11T23:10:44Z")

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For what other buildings is a fifteen-year lifetime considered reasonable? Houses, office buildings, airports, etc all usually stand for decades before being replaced. Why is a sports arena so disposable?

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**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\
**Post date:** [December 11, 2023, 11:11pm UTC](https://boards.straightdope.com/t/should-sports-arenas-be-left-to-the-private-sector/764672/50 "2023-12-11T23:11:02Z")

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> [@snowthx](#):
>
> And a 3rd team moved from Oakland to SF (Warriors), leaving OAK bereft of any major league sports teams.

That sounds to me like a win-win. Oakland doesn’t have to pay anything, but the team is still close enough that residents can easily go to the games.

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**Author:** ![Robot\_Arm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/robot_arm/32/18280_2.png) [@Robot\_Arm](https://boards.straightdope.com/u/Robot_Arm)\
**Post date:** [December 11, 2023, 11:16pm UTC](https://boards.straightdope.com/t/should-sports-arenas-be-left-to-the-private-sector/764672/51 "2023-12-11T23:16:23Z")

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> [@Chisquirrel](#):
>
> Nobody tell the Packers or Cubs that.

I can sympathize; I’m in Boston.

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**Author:** ![kenobi\_65](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kenobi_65/32/13178_2.png) [@kenobi\_65](https://boards.straightdope.com/u/kenobi_65)\
**Post date:** [December 11, 2023, 11:17pm UTC](https://boards.straightdope.com/t/should-sports-arenas-be-left-to-the-private-sector/764672/52 "2023-12-11T23:17:20Z")

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> [@Dewey\_Finn](#):
>
> For what other buildings is a fifteen-year lifetime considered reasonable? Houses, office buildings, airports, etc all usually stand for decades before being replaced. Why is a sports arena so disposable?

_Author’s note: I’m not saying that any of the below is a **good** reason to consider a fairly young stadium to be obsolete, but it does seem to be the thinking/argument that teams make._

Assuming that there aren’t actual issues with the structure (or that maintenance hasn’t been shoddy), my understanding is it comes down to “how much money is the home team making through the stadium?”

Sports stadiums today are, in effect, an escalating arms race. Every time a new stadium or arena opens, it pushes the “state of the art” on what’s included in the stadium, which frequently means “additional revenue streams” – VIP seating, clubs and restaurants, etc., all of which add to the home team’s income, and allow them to compete more effectively to sign players (both free agents, as well as re-signing their own players).

A team that’s in a 15- or 20-year-old stadium may be at or near the bottom of the league’s stadium-related revenue, and less able to compete financially.

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**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\
**Post date:** [December 11, 2023, 11:20pm UTC](https://boards.straightdope.com/t/should-sports-arenas-be-left-to-the-private-sector/764672/53 "2023-12-11T23:20:06Z")

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Thanks. That’s reasonable. However, I think the teams will be much less eager to build a whole new stadium after fifteen or twenty years, if they have to pay the full expense, without any sort of public subsidy. I’d like to get a whole new house every fifteen years but I doubt the government would be willing to cover the cost.

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**Author:** ![snowthx](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/snowthx/32/10660_2.png) [@snowthx](https://boards.straightdope.com/u/snowthx)\
**Post date:** [December 11, 2023, 11:23pm UTC](https://boards.straightdope.com/t/should-sports-arenas-be-left-to-the-private-sector/764672/54 "2023-12-11T23:23:05Z")

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> [@Chronos](#):
>
> That sounds to me like a win-win. Oakland doesn’t have to pay anything, but the team is still close enough that residents can easily go to the games.

Agree. The Oakland mayor and city leaders take a lot of heat for the A’s moving out, but I am glad someone stood their ground and did not sell the farm to keep the team in town. Perhaps they saw the numbers and realized, which is unusual, that keeping the team in town at what the team was offering just did not pencil-out to be any financial benefit to the city. Unusual.

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**Author:** ![kenobi\_65](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kenobi_65/32/13178_2.png) [@kenobi\_65](https://boards.straightdope.com/u/kenobi_65)\
**Post date:** [December 11, 2023, 11:27pm UTC](https://boards.straightdope.com/t/should-sports-arenas-be-left-to-the-private-sector/764672/55 "2023-12-11T23:27:54Z")

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> [@Dewey\_Finn](#):
>
> However, I think the teams will be much less eager to build a whole new stadium after fifteen or twenty years, if they have to pay the full expense, without any sort of public subsidy.

I suspect that, at least in the U.S., we’ve gotten to the point where new stadiums and arenas have become bogglingly expensive, the return-on-investment that cities see on building a new home for a team is increasingly being seen as questionable (at best), and the number of cities which (a) lack a pro team and (b) are willing to shell out to attract a relocating or expansion team has become very small (especially with Vegas now having attracted 3 major league teams).

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**Author:** ![Robot\_Arm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/robot_arm/32/18280_2.png) [@Robot\_Arm](https://boards.straightdope.com/u/Robot_Arm)\
**Post date:** [December 12, 2023, 3:41am UTC](https://boards.straightdope.com/t/should-sports-arenas-be-left-to-the-private-sector/764672/56 "2023-12-12T03:41:57Z")

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> [@kenobi\_65](#):
>
> A team that’s in a 15- or 20-year-old stadium may be at or near the bottom of the league’s stadium-related revenue, and less able to compete financially.

The problem is that people only seem to apply that reasoning to the old stadiums. Does anyone in Oklahoma City realize that the $900 million stadiium they’re thinking of building will only last for 15-20 years?

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**Author:** ![kenobi\_65](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kenobi_65/32/13178_2.png) [@kenobi\_65](https://boards.straightdope.com/u/kenobi_65)\
**Post date:** [December 12, 2023, 3:44am UTC](https://boards.straightdope.com/t/should-sports-arenas-be-left-to-the-private-sector/764672/57 "2023-12-12T03:44:05Z")

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> [@Robot\_Arm](#):
>
> Does anyone in Oklahoma City realize that the $900 million stadiium they’re thinking of building will only last for 15-20 years?

It would not, at all, surprise me if they don’t. Or, if they do, perhaps they believe that they will be able to make improvements to that stadium 15 or 20 years down the road which will satisfy their tenant. Or, maybe, they simply think that they’ll be the exception.

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**Author:** ![jjakucyk](https://avatars.discourse-cdn.com/v4/letter/j/3d9bf3/32.png) [@jjakucyk](https://boards.straightdope.com/u/jjakucyk)\
**Post date:** [December 13, 2023, 1:45am UTC](https://boards.straightdope.com/t/should-sports-arenas-be-left-to-the-private-sector/764672/58 "2023-12-13T01:45:39Z")

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The cost/benefit calculations usually go something like this. A $900 million stadium will bring in $1.5 billion in economic development. $900M \< $1.5B so it’s a positive ROI. Project = go.

The problem with that, and this applies to road and highway projects as well, only worse, is that $900M in actual cash money is being spent by the government, but the GOVERNMENT isn’t realizing $1.5B in returns. So the calculation isn’t [if $project\_cost \< $project\_benefit = go] it’s really [if $project\_cost \< additional\_tax\_returns\_over\_project\_lifespan - project\_maintenance\_and\_operating\_expenses = go].

So if a stadium costs $900M to build, has a 20-year lifespan, and the government entity that paid for it can capture say 2% of the purported benefits through property/sales/income/whatever taxes, then there needs to be $2.25 billion in benefits. That assumes all the spinoff development is in-place and taxable the second the stadium opens, that none of it is tax abated, or assessed at a lower value, and that the stadium needs no additional government funds for operations, maintenance, or upgrades in the meantime.

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**Author:** ![hajario](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hajario/32/171_2.png) [@hajario](https://boards.straightdope.com/u/hajario)\
**Post date:** [December 13, 2023, 2:34pm UTC](https://boards.straightdope.com/t/should-sports-arenas-be-left-to-the-private-sector/764672/59 "2023-12-13T14:34:51Z")

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The Oklahoma 1% tax increase has been approved by 71% of the vote. It actually continues the existing tax which would have ended in 2028 which will now go through 2034.

> **[Oklahoma City voters approve sales tax for $900 million arena to keep NBA’s...](https://finance.yahoo.com/news/oklahoma-city-voters-approve-sales-115910829.html)**
>
> Oklahoma City voters on Tuesday approved a 1% sales tax for six years to help fund a new downtown arena for the NBA’s Thunder that is expected to cost at least $900 million. The Oklahoma State Election Board reported that 71% of the city's voters...

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**Author:** ![snowthx](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/snowthx/32/10660_2.png) [@snowthx](https://boards.straightdope.com/u/snowthx)\
**Post date:** [December 13, 2023, 3:07pm UTC](https://boards.straightdope.com/t/should-sports-arenas-be-left-to-the-private-sector/764672/60 "2023-12-13T15:07:58Z")

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> [@jjakucyk](#):
>
> The cost/benefit calculations usually go something like this. A $900 million stadium will bring in $1.5 billion in economic development. $900M \< $1.5B so it’s a positive ROI. Project = go.

This is usually how proponents paint the picture of stadiums and arenas. What they fail to disclose is the $1.5B is not all positive, as a large % of that haul is from other spending on entertainment in the same area. It’s not all newfound revenue, but cannibalized from other entertainment activity.

In my area, the Sacramento Kings were lured into staying in town with a new arena that the city bent over backwards to make happen. Part of the money the city kicked-in to build it is dependent on parking revenue. But, whoops, parking revenue was down during the pandemic and afterward, and now the city has to dip into other accounts to make their payments.

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