And don’t forget about the time value of money, either. $900 million in costs right now is not the same thing as $900 million in revenue over the course of 20 years. So to still get a positive return, you’d need to factor in some sort of typical interest rate.
That’s what always kills me, how the new stadium is going to bring so much money. Maybe in some places - but virtually no one comes to NYC overnight just to see a professional sports game. People here on vacation or for business might see a game or two - but it probably won’t matter if it’s new stadium or a 50 year old one, and if there’s no teams to see, they will see a Broadway show or go to a restaurant or somehow spend those entertainment dollars.
It’s not as lopsided as you make it sound. It is my understanding that the teams pay a rental payment to the city for the use of the stadium, etc. The city should be renegotiating the rent if it’s not enough to cover the maintenance needed.
I concur.
They lose money for the city- every single time. Since the city inevitably sells out the name of the stadium, they dont even “put our town on the map”. They increase traffic and crime.
Right.
In every case- a new sports facility has either a very small or negative economic impact.
https://www.stlouisfed.org/publications/regional-economist/april-2001/should-cities-pay-for-sports-facilities
The use of public funds to lure or keep teams begs several questions, the foremost of which is, “Are these good investments for cities?”…The short answer to this question is “No.” When studying this issue, almost all economists and development specialists (at least those who work independently and not for a chamber of commerce or similar organization) conclude that the rate of return a city or metropolitan area receives for its investment is generally below that of alternative projects. In addition, evidence suggests that cities and metro areas that have invested heavily in sports stadiums and arenas have, on average, experienced slower income growth than those that have not.
The politicians of course get free premium VIP seats. The public gets the shaft.
No, only if the majority of citizens like that professional sport- which is rarely true.
It would be a simple thing to put a clause in the contract that say “If we build you a stadium, we retain the naming rights and the name shall always be Taxpayer Field (or whatever they like).”
I don’t know about the crime part. I feel safer walking through Seattle after a game since I have 1000s of other fans walking with me.
It is the City that usually sells the naming rights. Quick, whats the name of the San Jose arena for the Sharks?
Adobe Abode?
I dunno about the rest of you, but my throat always used to swell with pride when I saw the Columbus Nationwides playing at Lower.com Field.
Go Emirates was also thrilling to watch.
SAP Center. I actually go there all the time. Which brings me to the point I want to make: Some of these sports facilities can be used for more than just sports. For example, SAP Center was built to be the home of the Sharks, but it is used for a multitude of other events as well. I’ve gone to plenty of concerts there.
Oakland Arena used to be the home of the Warriors before they moved across the Bay to the Chase Center in San Francisco. A lot of people said that meant the Oakland Arena was pretty much dead. That turned out to be far from true. It remains very busy with concerts, ice shows, etc.
My point is: I’m uncomfortable with taxpayer money going to support a single sports team. I’m more comfortable with a multi use facility that all kinds of people can use and enjoy from time to time, not just fans of that one sport.
That depends - I’m 99% sure that anything that happens at Citifield benefits the NY Mets. Because everything I see involves the Mets in some way - they email me about concerts and other events , all of which have a special pre-sale for people who buy at least a partial season plan for the Mets. They lease the stadium and the land the parking lots are on and operate the concessions, no matter what event is going on. It’s not like the city or a non-profit org operates the venue and collects the fees when other events are held there - when a high school graduation is held at Lincoln Center , it’s not a profit-making enterprise that gets the rental fee.
Yes, we used to live within walking distance of the Sharktank.
But here’s my point- San Jose wanted a sports arena to “put San Jose on the map” but then instead of calling the arena San Jose Arena- they sold out- at least twice iirc.
Nice place, but iirc it loses $$ for the city.
That’s possibly true, I’m not familiar with the finances. Personally, I’m really glad it’s there, and I’m no sports fan.
I don’t mind if the sports venue does not make a lot of money, or even loses some money for the city (within limits). A place like SAP Center means people in San Jose and the south bay can see a concert or whatnot near home instead of always having to go to SF. It can enhance life in a city. But, I don’t like it when there are rosy promises of riches for everyone just beyond, as long as the city chips-in more than their fair portion of the building costs. There is a line between investing in public works that benefit everyone and private enrichment.
I understand arenas are less bad on this metric than stadiums. Also, there’s a trend in making sports facilities part of a wider economic development plan, where the billionaires own surrounding properties and therefore have a stake in economic activity outside of the facility. A 2016 article in the Atlantic showcased the Staples Center in LA, now called the Crypto .com Arena.
Honestly, these other arguments are also less than convincing. Personally, I say that any private activity bonds issued by state or local governments should be convertable - meaning that eg if they default they should be convertible into shares of the sports franchise. Though that’s not a panacea either.
Count me among those that think it’s madness that the state funds so many sports stadia in the US.
I can understand favorable loan terms or whatever, maybe even some support with infrastructure, but giving vast amounts of cash to 100% for-profit ventures? Crazy.
I’m against tax breaks too. Certain things should be off the table in the bidding wars. A stadium shouldn’t be something to be secured at any cost, it’s something worth having only if it’s a good deal for the community.
I lean that way myself, but I’m curious about how other sorts of facilities are funded. Who pays to build an opera house, concert hall, art museum, or fairgrounds? Are those publicly funded? Do the groups that use them turn a profit (and would it matter if they do)?
I’d feel like a hypocrite to say that opera deserves public funding, but sports don’t.
Good question.
Here in the UK at least, it’s a nuanced answer.
Yes, the government funds such facilities, with the exception of fairgrounds, but:
- It’s typically through things like the national lottery fund. Since I don’t play the lottery, it’s cost me nothing (directly anyway)
- They don’t tend to make much profit
- The serve the community better. For example, many museums are free entry and/or they organize educational events.
I think this matters. Not exactly whether the groups that use the venue turn a profit, but whether the group that controls the venue turns a profit in the sense that there are owners that divvy up the profits. I’m good with Taylor Swift making a profit from her hypothetical concert at Lincoln Center - but Lincoln Center’s “profit” isn’t going to shareholders and Taylor doesn’t control the venue so that when some other group wants to use the venue , they have to go through Taylor.
Also, opera houses and art museums don’t typically cost hundreds of miliions, and probably have a lifespan more than 10-15 years. So, those venues likely are paid for before they become obsolete. Also, ISTM those things are mainly build for public enrichment, whereas sports facilities use public funds mainly for private gain.
@Mijin, @doreen, and @snowthx, those are all interesting points, but I’m not sure they really make a difference between arts and sports. It’s easy to say “arts enrich the community, paying for a concert hall is a good use of public funding; football appeals to beer-swilling yahoos, let them pay for their own stadium.” That’s an awfully elitist argument, though.
I don’t like the idea of government paying to build a facility that enables some private organization to run their buisness at a profit. I just want to be sure I’m not an elitist hypocrite when I make that argument.
It doesn’t really make a difference that sports stadiums are more expensive. If the principle is wrong, then the amount of money shouldn’t matter. I’d like to know if there’s some definite difference between the two cases, not just a difference of degree.