Until 1950 the vast majority of owners of professional sports teams built and maintained their own stadiums. Local authorities now routinely contribute between 70% and 80% of the construction of facilities, however, fearful of losing franchises and the benefits assumed to come with them.
This assumption is undercut by a 2008 Barry Law School paper, “Sports and the City: How to Curb Professional Sports Teams’ Demands for Free Public Stadiums,” which looks at the relationship between stadiums and local economic activity.
The paper, published in the Rutgers Journal of Law and Urban Policy, determines that:
- There is little or no positive correlation between stadium construction and local economic development. Income tends to stay with the teams, because facilities are self-contained and most fans return directly home after games.
- New facilities frequently cost more money and create fewer jobs than the best alternative public investment.
- The burden of public funding of stadium construction is frequently born by lower- and middle-class taxpayers, many of whom are, paradoxically, priced out of newer facilities.
The author considers several broad strategies for curbing stadium subsidies, and concludes that the best approach would be a requirement for teams to share facility revenue based on the percentage of public funding.