Original post date: March 27, 2013
Article by: Anonymous

Even amongst fiscal conservatives, the argument is often made that the public funding of sports stadiums is justified because of the economic benefits they bring to their communities.  According to TBO, the state senate has passed a measure that would give $60 million over 30 years to VisionPro Sports Institute Holdings, a British company aiming to build a Major League Soccer (MLS) stadium in downtown Tampa. Proponents argue that current stadiums are insufficient and that better ones are needed before the MLS can expand into the Southeast. But would this help Florida’s economy?

Unfortunately, stadiums and arenas typically have very little impact on local economic growth. University of Maryland economists Dennis Coates and John Humphries argue that “household spending on sports … is highly substitutable for other forms of entertainment,” and that “[r]esidents maintain their levels of entertainment spending but alter the allocation of this spending toward sport related spending.” Complicating matters further is the fact that much of the sport-related spending goes to pay the salaries of athletes, coaches, and owners who (unlike the staff at, say, a movie theater or restaurant) often do not live in their host cities full time. This means lower spending multipliers compared to other forms of entertainment. In short, new sports facilities and teams do not raise per capita income or total employment.

Will this time bedifferent? Maybe attracting Major League Soccer to Florida would be a boon for the economy. But should taxpayers have to shoulder that risk? After all, the proposal would allocate a total of $60 million in public funds to constructing the new soccer stadium. If a major profit opportunity exists, then private investors should be capable of funding the project. Columbus Crew Stadium, an MLS stadium in Ohio and the first stadium built exclusively for professional soccer, was entirely funded with private money. So was the much larger Gillette Stadium in Foxboro, Massachusetts, which is home to both the New England Patriots and the New England Revolution, an MLS team.

What the issue boils down to isn’t economic growth, but corporate welfare. Those who stand to benefit from a new soccer stadium aren’t local economies, but well connected political and business interests. What Florida needs is more private investment in projects that grow the economy. Soccer stadiums don’t fit that bill.


Tampa Tribune Article


Coates & Humphreys on Sports and Urban Economic Development


Siegfried and Zimbalist on Sports Facilities and their Communities


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