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Lawmakers Should Sideline Handouts for Sports Stadiums

November 15, 2017

Sports team owners, and the elected officials who enable their graft, say using taxpayer money to pay for stadium construction is an investment in local economic growth.

According to a new survey conducted by researchers at Seton Hall University, Americans are fiercely divided over the ongoing war of words between President Donald Trump and some professional athletes about their displays (or lack thereof, depending on your view) of patriotism before games.

This season, some National Football League (NFL) players have silently kneeled during pregame performances of the national anthem to protest what they believe to be widespread abuses of power by police and other government officials.

Trump has used social media and national speeches to criticize players’ protests, and he has called on team owners to fire abstaining players and encouraged owners and coaches to say, “Get that son of a b**** off the field right now, he’s fired—he’s fired.” Trump says the protests are “a total disrespect of our heritage.”

If anyone from the NFL should be fired, however, the cause for termination shouldn’t be for a quiet kneel or other form of expression. Instead of coaches telling players to hit the showers, city and state lawmakers should tell sports team owners seeking taxpayer handouts for a new stadium to get “off the field” and leave the public trough.

Sports team owners, and the elected officials who enable their graft, say using taxpayer money to pay for stadium construction is an investment in local economic growth, making the taxpayers the winners. But in reality, these deals are nothing more than corporate welfare and a transfer of wealth from taxpayers, some of whom may struggle to make ends meet, to politically connected business owners.

Even if one ignores arguments about the fairness of giving billionaire sports team owners hundreds of millions of dollars in taxpayer funds, sports stadium subsidies are typically bad investments of taxpayer money.

As Scott Wolla, senior economic education specialist at the Federal Reserve Bank of St. Louis, wrote earlier in 2017, the opportunity costs of stadium subsidies may exceed the “seen” benefits tallied up in subsidy supporters’ optimistic predictions, because new stadiums cause consumers to divert their entertainment spending toward the new home team and away from other businesses.

“In the case of sports stadiums, both ‘seen’ and ‘unseen’ economic activity should be considered,” Wolla wrote. “The unseen spending, however, tends to be overlooked. Consumer spending at a sports stadium is easy to see—it is obvious and measurable. What is unseen, however, is how consumers would spend their dollars otherwise. If they were not spending on sporting events, they would instead spend on museums, movies, concerts, theater, restaurants, and so on. Because consumers tend to have limited entertainment budgets, dollars spent at a new stadium would not be new spending but rather diverted spending.”

Regardless of with whom one aligns in the debate over free speech and pregame patriotism, we should all agree that elected officials should not give taxpayer bailouts and take on additional debt to finance private sports stadiums.

Article Tags
Taxes Economy
Author
Jesse Hathaway is the managing editor of Budget & Tax News, a publication of The Heartland Institute.
jhathaway@heartland.org @JesseinOH

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