San Diego voters will be asked to approve a plan to demolish a former National Football League stadium and replace it with a Major League Soccer (MLS) complex without putting any taxpayer money on the line.
In April, FS Investors, a development group led by San Diego investment manager Michael Stone, announced its intentions to organize a ballot initiative in November asking for residents’ approval for construction of SoccerCity, a soccer stadium and arena district situated where Qualcomm Stadium is currently located.
SoccerCity would be completely financed by private funds, as opposed to the arena the complex would replace, Qualcomm Stadium.
Qualcomm Stadium, also known as “The Q,” previously served as the home of the San Diego Chargers NFL team. In January, the Chargers relocated to Los Angeles, leaving San Diego taxpayers on the hook for about $12 million a year in maintenance and debt payments on a now-unused stadium.
‘Significant Financial Outflow’
Robert Baade, a professor of economics at Lake Forest College, says stadium subsidies often result in taxpayers getting sacked.
“The problem with sports is most of the money goes to players and owners,” Baade said. “A majority of players live outside of where their team plays, and therefore you are setting up an industry that results in significant financial outflow.”
Baade also questions the claims stadiums bring economic benefits.
“With big public projects such as sports stadiums, you have to consider the significant substitution effect, which is the idea that if you spend more time and money on sports spectating, you are going to spend less time and money on other recreational pursuits that involve spending,” Baade said.
Politics of Pigskin
Baade says team owners effectively hold taxpayers hostage to get government funding.
“When you consider sports teams, they are unregulated monopolies, which means they can maintain an excess demand for teams,” Baade said. “No politician wants to lose a team on their watch, and so mayors are constant about making sure the team is accommodated, in order to avoid the loss of that team.”
Benefits for Both Parties
Craig Eyermann, a research fellow at the Independent Institute, says privately funded sports stadiums are a better deal for taxpayers and team owners alike.
“The biggest benefit to a privately funded stadium over a taxpayer-funded one is that the taxpayer doesn’t have any risk if the team’s owners decide to leave for another city or if the team fails,” Eyermann said. “For team owners, private funding has an advantage, in that they can move a stadium construction project along much more quickly than can be done when public tax dollars are involved.
