What Economists Think about Public Financing for Sports Stadiums
- February 01, 2017
- CBR - Economics
In the United States, sports fans are used to paying through the nose to watch their teams play. The average ticket price for National Football League games hit $92.98 in 2016, an increase of nearly 50% since 2006—price growth at more than twice the rate of inflation. A beer and a hot dog at Wrigley Field, home of Major League Baseball’s Chicago Cubs, collectively run $13.50, and the cost for a family of four to attend a National Basketball Association game averaged $339 for the 2015–16 season.
But even if they never attend a game, fans can end up subsidizing their local teams via public financing of their stadiums. When the NFL’s Atlanta Falcons move into their new home later this year, they’ll be able to thank $200 million in public bonds that helped with the construction. By contrast, voters in San Diego rejected a proposal in November to raise hotel taxes in order to contribute $350 million to a new stadium for their (now formerly) local football team, the Chargers. From 2000 to 2015, privately owned sports facilities cost US taxpayers $12 billion.
But do the economic benefits generated by these facilities—via increased tourism, for example—justify the costs to the public? Chicago Booth’s Initiative on Global Markets put that question to its US Economic Experts Panel. Fifty-seven percent of the panel agreed that the costs to taxpayers are likely to outweigh benefits, while only 2 percent disagreed—though several panelists noted that some contributions of local sports teams are difficult to quantify.
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