Evaluating Subsidies for Professional Sports in the United States and Europe: A Public-Sector Primer

Abstract

The character of subsidies for the construction of professional sports stadiums is changing in Europe and the United States. The incidence of these subsidies and the manner in which they are changing offers insight into an evolving relationship between the public and private sectors in building sports facilities. The changing financial imperatives this paper identifies and analyses suggest that the myopic concerns of cities coupled with powerful financial incentives for leagues and teams to build stadiums account for the spate of facilities constructed in the USA since Joe Robbie stadium in 1987. Growing public scepticism and resistance to stadium construction has been responsible for the private sector bearing a larger portion of the stadium construction costs, but teams have been more than compensated with increasingly generous leases. Cities have placated the public through the imposition of taxes that are either too small per capita to justify strong resistance or through deflecting the tax burden stadiums impose to non-residents. Since cities taken together are adopting the same strategies, the reality is that stadiums collectively are being paid for by local taxpayers. The public will continue to pay for stadiums until cities recognize their shared interests and take a collective stand against the professional sports monopolies. As long as the leagues continue to maintain an excess team for franchises, cities will continue to comply with team and league financial demands while searching for ways to placate an increasingly sceptical taxpaying public.