Taxpayers Strike Out When They Pay For Sports Stadiums

Major League Baseball is depending more and more on taxpayer-funded stadiums.

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Atlanta Braves' Dan Uggla, high-fives teammates after scoring a home run in the second inning of an opening day baseball game against the Philadelphia Phillies, Monday, April 1, 2013, in Atlanta.

For America's Major League Baseball teams, this week marks Opening Day, the annual springtime ritual of first pitches, fresh jerseys and rivalries renewed. Ballparks new and old open to throngs of fans, all of whom can believe – at least for one afternoon – that this is the year their team wins the World Series.

But yesterday was also opening day of a different sort: For the Atlanta Braves, tenants of Turner Field, it was time for a new round of wringing stadium subsidies from taxpayers.

As Georgia Public Broadcasting reported, the team is in talks with the city of Atlanta regarding upgrades to its stadium, the funding for which would come "from a variety of sources, including city, state and federal tax incentive programs." And the team is using an age-old justification for requesting public money. "We believe we're an economic driver and we certainly don't want people to lose sight of that and it's certainly something that helps a great deal of people beyond us just playing baseball games," said Mike Plant, the Braves' executive vice president of Business Operations.

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Seemingly every sporting executive, franchise owner or big-event organizer claims that his or her team or massive sports competition will be a boon for the local economy, and government officials have certainly bought into the rhetoric. Subsidies to municipal bondholders who financed stadium construction will cost taxpayers $4 billion by 2047, according to Bloomberg News. Work by Harvard professor Judith Grant Long has uncovered another $10 billion in hidden costs to taxpayers for professional sports facilities.

And what is the public getting for its money? Not very much. According to sports economists Robert Baade and Victor Matheson, researchers "have almost invariably found little or no economic benefits from spectator sports." For a variety of reasons, sports simply don't provide a boost to the local economy – most of the consumer spending on events merely replaces spending that would have happened anyway or leaks back out to other locales.

Even if a team makes it to the World Series, the effect on the economy is virtually nonexistent. As Matheson and Baade found, "An examination of 129 playoff series finds that any increase in economic growth as a result of the post-season is not statistically significantly different than zero." One study by the Bureau of Labor Statistics even found that professional sports may be a net negative for the local economy.

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But that hasn't stopped teams from asking for goodies, or local officials who fear losing a franchise to another city from acceding to nearly every demand. Just last month, Atlanta's city council approved a deal to build a new stadium for the National Football League's Falcons, at a cost of half a billion dollars for taxpayers. Turner Field is only 17 years old, and yet the Braves want Atlanta to pony up again.

The public now pays between 70 and 80 percent of the cost of the average Major League Baseball stadium, even as the league continues to expand its popularity wordwide, gaining ever more customers and revenue. As Barry University's Marc Edelman wrote, "MLB club-owners are financially doing better than ever – thus, calling into doubt any fair market need for subsidies."

In the wake of the Great Recession, states are slashing vital programs and cities are literally turning off their streetlights for lack of funds, so hugely profitable sports franchises begging for taxpayer subsidies is a serious public policy problem. After the pomp and pageantry of Opening Day fade away, the cost of taxpayer giveaways to sports teams will linger on and on, crimping government's ability to respond to the real needs of residents for whom the national pastime is just another game.

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