Hey monkeys,
Most of us know that professional sports are key to creating pride and a tight knit community, however, not many of us can agree on who should ultimately pay for stadiums in which professional sport teams play.
Proponents say that subsidizing sports stadiums is justified because of the economic impact it will have on the community. First, sports stadiums are huge construction projects. In fact, they are often compared to the medieval cathedral in their attempt to dominate the skyline and inspire civic pride.3 And, like the cathedrals of old, they are expensive, massive building projects that require years of intensive labor. Proponents of a new stadium often laud the project’s ability to generate new construction jobs. For example, the proposed stadium for the Los Angeles Rams in Inglewood, California, was predicted to cost $3 billion and add 22,000 construction jobs to the economy of Los Angeles, California.
Not only that, but sports stadiums generate mass consumer spending. Over 3.5 million people saw the St. Louis Cardinals play at Busch Stadium in 2015. Those people spent money on tickets, parking, restaurants, drinks, clothing, etc. Many individuals who argue for government subsidies point to the fact that the economic impact of these stadiums far outweigh the government subsidies. What's interesting is that economists believe that government subsidies for sport franchises should be eliminated.
In a 2017 poll, 83 percent of the economists surveyed agreed that “Providing state and local subsidies to build stadiums for professional sports teams is likely to cost the relevant taxpayers more than any local economic benefits that are generated.”10 In their book, Sports, Jobs, and Taxes, Roger Noll and Andrew Zimbalist present a comprehensive review of stadium investments. In all cases, they find a new sports facility to have extremely small (or negative) effects on overall economic activity and employment.
What is often overlooked by proponents of taxpayer funded professional sport stadiums is the opportunity cost of building these stadiums. What fails to brought up is that the $500 million a government can spend on a stadium, could better be spent on roads, bridges, parks, airports, etc. all of which increase productivity.
spending on education is seen as a form of human capital investment. Human capital is the knowledge and skills that people obtain through education, experience, and training. The education that students receive in school and college (and further training and work experience) increases their productivity. Economists prefer these types of investment because increased productivity has the potential to increase the rate of economic growth and increase the standard of living.
Without a doubt, building massive sport stadiums has some sort of positive effect on the surrounding economy, but I fail to believe that building a stadium is the best way to spend government money. So...
What do you guys think? Should there be government subsidies for sports stadiums? What better ways could the taxpayer funds be spent that also increases economic activity? Do you truly believe that infrastructure projects can increase productivity to such an extent that its increase in economic activity outperforms the building of sports stadiums?
Please discuss.
