Stadium game: Are professional sports franchises and their stadiums a boon to local economies?

Abstract

As costs for building sports stadiums used by professional sports teams across the United States continue to rise, questions involving the net impact on their respective cities economy rise as well. The cost associated with these stadiums has grown rapidly, with the latest stadiums being well into the billions. The local government has also traditionally subsidized the cost of constructing stadiums, though cities are now trending away from this due to a lack of voter support and the ability to play hardball with teams. Proponents often claim that these stadiums will act as economic catalysts for earnings and job creation but often use questionable methods to reach these conclusions. Among the more notable flaws, is the failure of proponents to account for the effects of economic concepts such as substitution and opportunity costs. In contrast, a number of academic studies have come to the conclusion that more often than not the presence of professional sports teams and their stadiums has a negative net effect on a city. However, the majority of cases studied showed that the resulting effect, whether positive or negative, were generally negligible.