Benefits of Public Funding for Sports Stadiums

Historical Context of Sports Stadium and Arena Construction

Every sport fan has a favorite team and would love nothing more than to be able to watch and enjoy the game in a brand new state-of-the-art stadium built in their city. However, this new cutting-edge stadium that they want built does not come without a cost. Historically, almost all sports were played in privately owned venues (swindell & rosentraub, 1998). After the 1950s, public funding for the building of new stadiums and arenas became more common in order for cities to attract popular sport teams to relocate to their city (weiner, 2004). While public funding was still new, teams and other users, such as concerts and circuses, would pay a rental cost that would help make up for operating fees and the public funding (swindell & rosentraub, 1998). According to weiner (2004), today governmental units provide subsidies for the building of stadiums including:

1) Publicly financing stadiums and renovations,

2) Offering favorable leases

3) Offering direct cash payment, and

4) Using tax-exempt bonds to finance construction. However, the primary question of concern to be addressed in the present article is:

Will a city financing the construction of a new stadium for a professional team really benefit from the taxpayer dollars that go into it?

Why finance a stadium?

What type of city?

What does a city get in return? Bringing a professional team to a city with.

What role does the owner have in the use of public funds? What role do the stakeholders play in a private versus public stadium? In your opinion, is there a benefit to having one type of stadium over the other? Explain using specific examples and financial data to support your rationale.

Conclusion:

It makes perfect sense for a city with available space and a big enough population to try their best to bring in a professional sport team and provide them with a new, state of the art arena or stadium. It reminds the authors of the old saying, “it takes money to make money.” In this situation, when a city finances the construction of a new stadium or arena and strategically plans where, when, and how, it’s likely that positive benefits will accrue. It’s almost like growing a plant. You buy the pot and soil (the stadium or arena), you plant the seed inside of it (the team), you give it sunlight, water, and time (exposure and maturity), and then you watch it grow into a big successful plant (successful stadium/arena and team). Ultimately, the authors recommend that cities should finance a new stadium or arena for a professional team if they are given the opportunity. Such financing would have a positive economic impact, as well as create tangible and intangible benefits for the city and its residents. Cities get a lot in return for providing their citizens entertainment with a professional sports team, and public financing of new arenas should be considered.