Sports Stadiums Are Bad Public Investments. So Why Are Cities Still Paying for Them?

"Anybody that drives around Southern California can tell you the infrastructure is falling apart," says Joel Kotkin, a fellow of urban studies at Chapman University and author of the book The New Class Conflict. "And then we’re going to give money so a bunch of corporate executives can watch a football game eight times a year? It’s absurd."
When the Inglewood City Council voted unanimously to approve a $1.8 billion stadium plan on February 24th, hundreds of football fans in attendance cheered for the prospect of a team finally returning to the Los Angeles area.
On it’s face, the deal for the city of Inglewood is unprecedented-Rams owner Stan Kroenke has agreed to finance construction of the stadium entirely with private funds. The deal makes the stadium one of the most expensive facilities ever built and is an oddity in the sports world, where most stadiums require millions in public dollars to be constructed.
And while the city still waits to hear if it will indeed inherit an NFL team, the progress on the new privately-funded Inglewood stadium has set off a bidding war between other cities that are offering up millions in public subsidies to keep (or attract) pro-sports franchises to their area.
St. Louis has proposed a billion dollar waterfront stadium financed with $400 million in tax money to keep the Rams in Missouri. And the San Diego Chargers and Oakland Raiders have unveiled a plan to turn a former landfill in Carson, California, into a $1.7 billion stadium to keep the Rams from encroaching on their turf. While full details of the plan have yet to be released, it’s been reported that the financing would be similar to the San Francisco 49er’s deal in Santa Clara, which saw the team receive $621 million in construction loans paid for with public money.
Even the fiscally conservative Scott Walker is not immune to the stadium spending craze. The Wisconsin governor wants to allocate $220 million in public bonds to keep the Milwaukee Bucks basketball franchise in the area. Walker has dubbed the financing scheme as the "Pay Their Way" plan, but professional sports teams rarely pay their fair share when it comes to stadiums and instead use public money to generate private revenue.
Pacific Standard magazine has reported that in the last 20 years, the U.S. has opened 101 new sports facilities and stadium finance experts say that almost all of them have received public funding totaling billions of dollars. Politicians generally rationalize this expense by stating that stadiums will generate economic revenue and job opportunities for the city, but Kotkin says those promises are rarely realized.
"I think this is sort of a fanciful approach towards economic development instead of building really good jobs. And except for the construction, the jobs created by stadia are generally low wage occasional work."
"The important thing that we’ve forgotten is 'What is the purpose of a government?'" asks Kotkin. "Cities instead of fixing their schools, fixing their roads or fixing their sewers or fixing their water are putting money into ephemera like stadia. And in the end, what’s more important?"
Produced by Alexis Garcia. Camera by Garcia and Justin Monticello. Music by Jason Shaw.
Approximately 5 minutes.
Click reason.com/reasontv/2015/03/17... for downloadable versions and subscribe to Reason TV's KZbin Channel to get automatic updates when new stories go live.

[@matthewbartke4424]

"We'll make millions of dollars a year!" The stadium cost over 1 billion just to build...ummm that is a long payback period... If it was a 1 billion dollar stadium and it made 10 million a year, it would take 100 years to break even and that isn't even adjusting for inflation and assuming the profit is on top of maintenance.

[@theprofessorfate6184]

DOH!!!!!!!!

[@cmichael442]

+Matticus Barticus The stadium in those 16 games can generate well over 200M in one year alone. Ad other events and those 100 years turn into 10 or less.

[@theprofessorfate6184]

cmichael442 Except that isn't what happens 99 percent of the time.

[@Yeen125]

The problem with that is the contracts many cities sign with sports teams during new stadium development pretty much allow the team to keep almost all the revenue on game day to themselves.

[@2011blueman]

cmichael442, that 200M isn't going to the city.

[@PointNemo9]

If new stadiums made financial sense then teams would fund them privately.

[@chengliu872]

Fj Fj: That's what the SF Giants did and it worked out great.

[@bertlee3470]

From Deadspin: Private Benjamins: For years now, the Giants have billed AT&T Park as "the first privately financed ballpark in Major League Baseball since 1962." This is true if you don't count an estimated $25 million in municipal fire, police and garbage services; $33 million for the land itself, donated by the city; $83 million in property-tax exemptions; and on and on. (These numbers come by way of Baseball Prospectus, subscription required, from a study of hidden stadium costs by urban planner Judith Grant Long.) This has been the Giants' greatest public-relations coup, convincing San Franciscans they were getting a great civic landmark for free when in fact the public was footing 40 percent of the bill - and for a stadium enjoyed primarily by people from San Jose.

[@johnathanonland893]

They actually do. The problem is two fold one the city holds the majority of public land in prime real estate and the second being that city gets a unfair rate in public bonds. The argument is definitely wrong in terms of construction or tourism but a lot of municipalities make a killing leasing to these big sport teams. It's just a risk that needs to be taken by the private sector not the entities funded by the taxpayer.

[@ricardosoto5770]

Thats it.

[@dogcowrph]

Sure we’ll build you a stadium... sign your team over the city. Now we’re really partners... except you don’t own anything now. Still want to be partners? Build your own darn stadium. Use your own money.. or let. Budweiser or Disney build it for you.

[@jakem-82]

"It's a free market approach to say we are going to help the bucks stay here " Oh Scott Walker, what a priceless quote.

[@Liberty4Ever]

Right up there with George W. Bush saying, "We must abandon free market principles to save the free market system."

[@cityhawk]

Economic Conservative my ass.

[@BitcoinMotorist]

Not having an NFL team in Los Angeles has been a bonanza for current NFL teams. Teams in small markets get their cites to pay for new stadiums because the specter of a team moving to Los Angeles is enough to scare voters and politicians into approving state funds.

[@TReeves80013]

Even if a public funded stadium _did_ make financial sense, providing an economic net gain, it is still immoral to _force_ citizens to invest in a government sponsored entertainment venue. There is plenty of private money out there willing to fund a profitable enterprise. Let the investors who are willing to put their own money on the line determine whether or not it's worth the risk, instead of some elected bureaucrat who wins the votes of union thugs and corporate cronies regardless of how well or poorly the stadium performs.

[@MilwaukeeF40C]

It gets overlooked too often. Government spending is immoral regardless of where the state gets its money. It is still a form of law being used for economic manipulation and social engineering.

[@MilwaukeeF40C]

***** Yes. Some party is always the first to spend stolen money for purposes of initiating aggression, before some other party has to spend yet more stolen money for defense. Sometimes that party doing the initiating has been the U.S. government.

[@llewodcm20]

The government gets to invest your tax money with federal income tax withholding. :(

[@MilwaukeeF40C]

llewodcm20 And it gets shittier returns. It's like someone borrowing your Porsche and filling it with regular.

[@rjwalker6677]

To me it's wrong that tax dollars goes for Sports Stadiums. Tax dollars should be for roads, bridges, police, fire, schools, etc. I am amazed that most politicians around the country have supported tax funded stadiums the past 50 years. Often, these are the same politicians that say Government spends too much, but with Sports Stadiums, they seem to have no problem. The arguments they give about it helping the economy are proven false time and again by all the studies and economic experts. Even if it did help the ecomomy though, I still think it's wrong. People forget that tax money given for sports stadiums, means less money for other needy Government expenditures. It's not right when roads are crumbling and police and schools are under funded, at the same time stadiums are being built. To me it's an irony that one of the greatest entertainment money makers of all time- NFL Football, has to be supported by corporate welfare. Some day local Governments will get smart. If they all got together and refused to fund stadiums, owners would have no choice but to fund it privately. I do see some hope for the future. Some of the newer stadiums have been funded only partly with tax dollars, with private funds paying half or more. That is a step in the right direction. Stadiums funded entirely by tax dollars is a travesty.

[@HammerheadGuitar]

That's because politicians aren't praised when they spent money on infrastructure maintenance, but they do get praised when they spent money on huge and overly expensive buildings that we really do not need.

[@Iomeces]

That's the fun thing about government. You get to pay for the service, whether you would choose to use it or not. Imagine if Walmart charged you for groceries, whether you shopped there or not.

[@alonglongway4443]

Clearly lacking in economic knowledge with that statement, but fine stay ignorant.

[@oceanthresher6184]

@@alonglongway4443 it’s the other way around buddy.

[@chilzer5612]

That's the fun thing about business. You get to pay whatever the person charges for it, whether you need it or not. Imagine if you had to pay everytime you wanted to get tap water out of the sink, or whenever you wanted to drive literally anywhere. You think a business model set on providing commodities you can use for free is sustainable? I guarantee you that the corporate interest is going to charge you more overall than what you pay on your taxes. If you want to say 'Well, a competitor could just lower their price', we already see this setup in heavily consolidated industries like air travel, where no one wants to lower their price because they can make more money by charging people higher rates and they really can't do squat about it. There is no winning, only minimizing casualties.

[@Wilster1989]

The fact that it would not be seen as a good investment for these multibillionare owners to do with their own money is a red flag! Yay I'm from New England where Gillette Stadium was 100%privately financed, and I enjoy going to games there.

[@gabelincoln3608]

Well it doesn’t cause they can’t share a tax from hotels and restaurants

[@jgordon9625]

Public funding for private profit = US Economic Policy

[@nextgenwellness]

The owners of these franchises are so rich, so can’t they pay for all or almost all of it

[@igot1i]

People like sports and it's a great distraction from the grim realities of like corrupt politicians, inflation, high taxes and skyrocketing debt.

[@jackiechan511]

Socialism for the wealthy franchise owners while capitalism for the working class who can't afford the tickets.

[@donstacy7012]

Some people never ever learn.

[@adamfitchett1381]

The argument that building a stadium 'brings in revenue' is just a version of the Keynesian Multiplier. The govt spends bucketloads on this, and then other stuff happens. But that's the broken window fallacy. What about all the stuff that the people who were taxed would have chosen to do with their own money? Would the wealth not be more productive in their hands than in govt hands?

[@xbluebells]

Why civic leaders don't pursue wiring the city with high speed internet instead of these sports stadiums is a question on my mind. In Indianapolis the year we hosted the Super Bowl- the library was on curtailed hours due to lack of funds. Turn the Sports Off!!!

[@hitssquad]

xbluebells Generally agreed, but libraries are outdated piracy institutions. Give the library money back to the taxpayers and they can privately buy more internet service, indirectly funding high-speed internet projects.

[@MilwaukeeF40C]

It's all socialism and corporate welfare.

[@MilwaukeeF40C]

Daryl Christensen It fits perfectly well with the statist application of socialism.

[@douglassmith6275]

Daryl Christensen What is socialism Europe if so you should take a deep look at the European economy

[@douglassmith6275]

Daryl Christensen Europe is in terrible economic condition. Australia and New Zealand not doing to bad. They at least have a better sense of things then Europe and the US which are screwed. Take a look at what Steve Keen thinks about the Australian economy

[@hag12100]

+ReasonTV It's simple answer to the question. The cities want bread and circuses...

[@freedom_aint_free]

Peopople finance stadium for the same reason that they have been financing Vatican...

[@lawlkekbur]

4:21 "stadia" Latin plural, nice.

[@shonjuan11]

Century Link Field, where the Seattle Sounders play, was built with private and PUBLIC funds. Hmmmm. What does Drew Carey, as a board member/board of trustees member of both the SOUNDERS and REASON TV, have to say about this?

[@KevinSmith-qi5yn]

I love San Diego. Strapped for Cash? Nope, got a billion in reserves and a modest budget surplus. So why not a new Charger's Stadium? Well OK, but only if its 100% private funded, be in the Downtown Bay, and have no parking so no tailgating.

[@KizoneKaprow]

Is that true? Libertarians keep telling me that all of California is teetering on the brink of doom. Worse than Greece! And you say a major city has a budget _surplus?_ Somebody is lying.

[@KevinSmith-qi5yn]

Danial B. Yea, but if we didn't do those things, San Diego would have went bankrupt in 2008. San Diego now has budgetary obligations to pay before they can take on new debt. Also the budget ranges between Surplus/Deficit since 2008. Most cities in the US only have deficit. This does not include the money owed to the city by the state.

[@KevinSmith-qi5yn]

Danial B. I can produce proof SD currently is not in as much of the red as San Francisco or Los Angeles. There is also a limit to how much San Diego can borrow verse other cities. Quite simply they have to be in the black or close to it in order to be operational. San Diego is in Surplus if you exclude pension contributions. Since San Diego did pension reform over a decade ago, this is slowly becoming a non-issue. Also if you include the budget that is owed by the state, its in the black even with pension payments.

[@KevinSmith-qi5yn]

Danial B. That article is from 2004. As a result of it, several people went to jail and the city is under strict spending measures opposed to most other cities. $15 million is not a very large deficit for a city as large as San Diego. Also like I said, that deficit is only the result of the old pension system that was replaced a decade ago and unpaid benefits from the state.

[@KevinSmith-qi5yn]

Danial B. $440k per the 20k employees. About 8k per resident. Like I said, the biggest problem in San Diego is the old pension system. In 2013 we were in surplus. In 2014 we had a slight deficit. Over the next 9 years, San Diego should be predominantly in surplus opposed to in between surplus and deficit. Also with Pension reform means that there is no guess work done in how to calculate payments since all new employees for the last 10 years are on 401ks. As the remaining employees die, the amount owed into the pension program diminishes. San Diego also has another problem. Paying for the services promised by the state that the state does not fund. Yes it isn't rosy, but if you look at nearly all the other 50 highest populated cities in the US, they have underlying pension problems that San Diego is already addressing that they will all eventually have to deal with. The budget in San Diego also has to be frugal because they can't put on as much debt compared to other cities. Its the only non-bankrupt city I have ever heard of that did not repair their roads for a year in order to balance the budget.

[@Dischingo]

Why not let the teams and private investments fund the stadiums like the rest of the world.

[@ricardosoto5770]

I wonder the same, most UK stadiums are private financed. Same in Spain... They are less fancy, but one cannot be fancy with your own money.

[@gskibum]

I want tax payer funded ski areas damnit! /sarc.

[@sandydegener6436]

I do too, but without the: /sarc.

[@josephwolf7552]

I would not mind the stadiums on a couple conditions , the team must sign a 1000 year contract to stay, it must be 50 percent owned by the city, they must have affordable food and drink

[@trickyric67]

I live in the Miami area and our scumbag team owner cut the payroll by 2/3 after 1 month of the first season of the new stadium. The public is on the hook for the bill and attendance is at the bottom of MLB.

[@chengliu872]

$1.8 billion? That is absurd. I thought that Levi's Stadium was too expensive at half a billion dollars less than that.

[@seamusmckeon9109]

So many unused stadiums. TEAR THEM DOWN AND PUT MALLS AND HOUSING COMPLEXES!

[@DK-ld4ts]

Seamus McKeon ikr

[@th3dudeabides1]

couldn't agree more with the video's conjecture that stadiums should no longer be funded with public money.

[@chengliu872]

One of the only cases I know of where a stadium helped a city was AT&T Park in San Francisco. Before that park was built, that area was pretty run down and not very nice. Now it is a very nice area. Ironically it was one of the few stadia built without any public money.

[@HappySqrl]

I would like to see a comparative analysis of football stadiums vs hockey arenas because, in my experience, hockey arenas are used far more. Locally, our hockey arena is used for a NHL team, a WHL team, a lacrosse team, dozens of concerts a year, and several big events a year. For most of the year, there is something happening every day at the arena; and there are often multiple events a day. While I don't think it should be government funded, the hockey arena seems to bring a lot to the city

[@ricardosoto5770]

Most cities around the world just build a civi arena, the hockey and the baskeball come later,

[@quintessenceSL]

It's not only the taxpayer essentially giving corporate welfare to a 9 billion TAX-EXEMPT organization; it's the eminent domain, the corruption of zoning, and that these welfare projects don't stay localized to the idiots that support them, but are ultimately funded nationwide. The InternetCelebrities walk us through it: kzbin.info/www/bejne/eJDLp6RrfrOpqLc

[@FeminismDebunked]

Sport is a Business not a Charity. The Tax Payers are being ripped off.

[@74005Machi]

Civic leaders in Louisville, KY are also obsessed with this short sighted line of thinking.

[@RocketmanRockyMatrix]

I completely agree.

[@humzahhassan4521]

I like football but the owners should pay for their own stadiums its times like this I wish I was a packers or patriots fan

[@rentslave]

NJ should have built one.Instead,it has wasted more than a billion on a mall that will never open.

[@Meda01]

Just announced, the Rams are leaving St. Louis for LA and will get to play in a new stadium (owned by Rams owner) in 3 years, funded in part by 150 million the city will provide.

[@magicheats6766]

NFL Robz fans & their cities of money & blind them with alot of lies. Alot of NFL fans because they love the game so much allow it to happen is a mystery.

[@wmbeam211]

Billionaires own these teams they can afford to build their own

[@ariadhikarayendra5111]

Indonesian cities: Our team doesn't have a lot of supporters, but lets build a 50K capacity stadium. What could go wrong?

[@williamschirmacher6526]

We have no say

[@HanStanwell]

bread and circuses

[@KevZen2000]

When a person has a vested interested in the overrated sports industry, which will make them a nice salary, why wouldn't they be for building a new stadium, especially when they do not have to pay for the cost to build the stadium. Since a lot of Americas are sports fanatics, they will support it, even though it cost the tax payers more than it makes. As for the "jobs" created by the new stadium, most of them will be part time status, low skilled jobs, low paying, temporary, outsourced by staffing agencies, etc.

[@billschipper1718]

The new Rams stadium is privately funded. No tax dollars. Also the for everything was 5 billion dollars not the 1.8 billion in the video.

[@MIKECNW]

I agree, no taxpayer money.

[@boitahaki]

To entertain the masses so they forget about their problems.

[@dimercenary3090]

Why are they talking about the Rams in a video about publicly-funded stadiums when the stadium will be privately-funded?

[@mellis535]

Yes! I'm sick of sports, hearing about sports, the stupid slogans, jerseys, and on and on... No tax money, make it pay-per-view.

[@sandydegener6436]

Hey! Stadia can serve other purposes. In Africa and Islamland, they have been used as detention camps and a place where firing squads can ply their trade.

[@ktin4801]

Billionaires can live off govt but the 9 to 5 everyday worker can't live off govt but gotta buy the stadium for billionaire who gon make money off it & make no money off it?

[@vangaurdan]

Heh 0:40 James T. Butts

[@michaelbeerbados3291]

WE just got a new stadium and I argue with my friends about it all the time...YOU CANT EVER put enough events in it to make it pay !! And if it was a good investment, wouldn't private companies leap at the chance to outright own it? they never would because they aren't that stupid !! but governments who need a proud symbol of their community will spend all our money on one !! just stop sugar coating it...tell us you are going to fuck our ass BEFORE you bend us over,,,,

[@NomadJournalistNews]

Can we please elect some Libertarians to stop these ridiculous plans?

[@Ryan-jx4vh]

I like sports, but these billon dollar corporations can fund their own stadiums.

[@lifestudent55]

St. Louis is still stuck having to finish paying off the dome they built for the Rams just a few years ago. Good bye and good riddance Kroenke.

[@jockellis]

Don’t know about Falcon fans but Georgia Tech fans eat at the Varsity.

[@ssruiimxwaeeayezbbttirvorg9372]

vivax product placement ;(

[@AngryHateMusic]

Because group thought and worship is what the state must instill to survive. Without it spells death for these criminals.

[@DirtyGovernment]

To entertain the sheeple

[@nilesayer3046]

Good news Ingelwood NFL stadium has NO PUBLIC MONEY

[@jasonfire3434]

Niles Ayer I'm an LA Rams fan and Kroenke sucks balls as an owner. But the fact that he didn't gouge taxpayers here to build his stadium is honorable. Plus it makes it more likely he is committed to the area and the stadium. So I give him major props for that.

[@SouthernSkeptic]

They always say this. Trust me there will be some public money involved before it's complete.

[@Starhartdeer]

because building one in one of your cities provides happiness.

[@KizoneKaprow]

It's just like (wait for it) *Bread and circuses!*

[@josecuervo8487]

cities paying for sports teams' stadiums is stupid. sports organizations can afford to pay to build their own stadiums.

[@DK-ld4ts]

I am a dye hart sports fan but professional sports league are very rich and the owners are very rich so y can’t they pay for instead of using the peoples money y can’t tax money go to building houses for the poor maintaining roads and building shopping centers so all of us can benefit

[@sandydegener6436]

Why is the taxpayer on the hook for a stadium with "Levi's" as the first word in the title?

[@FeminismDebunked]

These Stadiums only benefit Rich Owners, rich athletes. They do nothing for the poor. Why should the poor pay for a Stadium they cannot afford to attend. The Tax Payer is being Ripped Off.

[@NBCJUGGALO]

Wait wait that guy basically said no one ever hangs out at the restaurants and the shopping district's by sports venues he lies first things first I'm an avid sports fan huge I love the angels the Anaheim ducks this guy needs to visit Los Angeles were in Anaheim the restaurants around the big A and Honda center are packed on game nights or la live in downtown Los Angeles were and I can't believe I'm saying this cause I'm a suns fan but la live is almost standing room at only before events at staples center especially laker and kings games I'd much rather eat out side a venue than pay high food prices inside

[@BitcoinMotorist]

The Staples Center is not a football stadium. There are hundreds of events there every year. Not 8 like you would have for a football venue.

[@NBCJUGGALO]

That wasn't my point he addressed stadiums across the board and I'm saying you can't say people don't frequent restaurants near stadiums if in southern California people do it regularly in Anaheim and downtown Los Angeles those restaurants are packed on game day come to Anaheim go to a restaurant called the catch try to get a table on a game night try I've been told 2 hours minimum wait

[@NBCJUGGALO]

And I know if an NFL team comes so will the Masse's look at th xfl experiment or collage football

[@chbrules]

Been to plenty of sports games. Go, eat some hotdogs there, and then gtfo, as do most. Furthermore, piles of actual research show this is economic suicide. Your argument is that you go shopping after a game? Well good for you. Go spend a billion in the city so they can bring in tax revenue, cuz no one else is.

[@GroverDuffield]

frank cedillo Sir, I do believe you represent the average sports fan, i.e. cannot use spell check. I have attended pro-sporting events and as has been said "the circus comes to town." There is so much money in these sporting events but little of it actually ends up in the community. Not for the investment that the community puts into it. I am no longer a sports fan, since the players have had the nerve to go on strike, with both the players and the owners/management acting like spoiled children, they lost me. I do not want my tax money going to them in any way, shape or form.

[@johnm994]

It works both ways. I didn't want my money to go to that bullet train that more than half the clowns in this state voted on.

[@Wanderlust1972]

+John McHugh transportation is a government responsibility, sports is not

[@stevencaruso825]

Sports Stadiums are bad public investments? True. However, major league sports teams give cities a better sense of identity. What would New York be without the Yankees? I've never been to New York, so I don't know, but the Red Sox certainly have contributed at least something to the local culture in giving the city a better sense of identity.

[@ricardosoto5770]

You can get those without public money.... people blame the owners, but they are used to get away with this. I blame the voter.

[@kjchicago1]

New York would be different without the Yankees-they’ll just have the Mets(I’ve been to New York in 1979 with my mom)

[@trevorbertin8179]

You cant feed everyone in the fucking city but you can throw millions.....uh huummmm....billions to built two loser teams like the raiders and chargers?? And Im a Raiders fan ffs.

[@long-timelistenerfirst-t-us2yy]

classic taxation without representation. only 5% of the people pay 95% of all the taxes. the poor vote these in bc they are voting with other ppl's money, _they_ aren't gonna get hit by the tax :-)