Future historians will look back on the 1980s and 1990s with amazement. Communities that were hard-pressed to keep their schools open or police on the beat nevertheless spent billions of dollars on stadiums and arenas for use by professional sports teams. Even mediocre athletes were paid more for a single season than the average hard-working taxpayer would earn in a lifetime. The average taxpayer, who was taxed to build sports facilities and support players’ salaries, could not afford to walk through the turnstile and watch a live game.
All available data suggest that continued public investment in sport stadiums is madness. Sports subsidies don’t produce economic benefits sufficient to justify their public subsidies. At best, they are an inefficient and unfair way to attain such “intangible” benefits as civic pride or urban identity. They unfairly burden those who don’t follow professional sports or who can’t afford to watch live games.
There is some good news, however. There is a way to stop the madness. The special interest groups that back stadium subsidies can be divided by proposing a plan that keeps teams from moving without offering millions of dollars in tax subsidies. Allowing fans to own franchises—a model pioneered in 1923 by the Green Bay Packers—would put a stop to the extortionist practice of teams threatening to relocate unless they are subsidized.
Part 1 of this Heartland Policy Study summarizes the many ways sports are subsidized in the United States and evaluates the benefits—claimed, real, and intangible—that are said to result from those subsidies. The author concludes that neither economics nor “civic pride” can justify taxpayer subsidies for the construction and maintenance of sports facilities.
In Part 2, the author explains why state and municipal governments nevertheless continue to subsidize sports facilities. While sports franchises don’t need subsidies, and taxpayers don’t want to subsidize them, the “bidding war” driven by too many cities chasing too few teams makes subsidies nearly inevitable.
Having come to understand what it is about the sports-and-public-policy environment that has given rise to the subsidy madness, the author in Part 3 considers several solutions that have been proposed to address it. Antitrust enforcement and legislation to outlaw the use of subsidies are considered, but found wanting. The best solution to the madness, the author concludes, is fan ownership of sports franchises ala the NFL’s Green Bay Packers.
Part 4 offers a summary and concluding remarks.
