Skip Navigation

A Closer Look at Stadium Subsidies

April 29, 2008
By Dennis Coates

This paper, written by University of Maryland, Baltimore County economics professor Dennis Coates reviews existing literature on the economic effects of sports stadium subsidies.

american flag

This paper, written by University of Maryland, Baltimore County economics professor Dennis Coates reviews existing literature on the economic effects of sports stadium subsidies. 

Coates writes that some economic studies of stadiums’ economic effects fail to account for taxpayers’ share of capital costs, distorting cost-benefit analyses.

“To truly understand the extent of stadium subsidization, it is important to account for all the ways in which public money pays for the facilities,” Coates wrote. “Public sources of information tend to focus on the public share of capital costs, which can produce misleading results regarding the extent of the public subsidy. For example, Zimbalist and Long show that for most of the stadiums and arenas built for professional sports franchises and in operation since 1990, ‘when net operating costs are included, the public share goes up.’”

Coates writes that his own studies, conducted with economist Brad Humphreys, suggest sports team actually depress individuals’ local incomes.

“Interestingly, Humphreys and I found that the overall sports environment—which […] includes the presence of franchises in multiple sports, the arrival or departure of teams, and stadium construction—in a given area reduced per capita personal income by about $10,” Coates wrote. “In other words, every man, woman, and child in the metropolitan area was poorer by $10 as a result of the sports environment.”