The Benefits and Necessities of Stadium Funding

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The Benefits and Necessities of Stadium Funding

State and local governments have become increasingly responsible for financing many of the new arenas and stadiums demanded by professional sports teams. While local officials have a long history of efforts to attract team to their communities, the task of securing the funds needed to build the required playing facilities is relatively new. During the early years of professional sports through the 1950s, most teams played their home games in a privately owned stadium or arena. Team owners wanted little involvement from the public sector in their business affairs. Later, when publicly funded facilities became more common, the teams and other users paid rental fees that helped offset the public sector's capital and operating costs for the facilities. It has now become commonplace for cities, counties, and states to use a combination of broad-based taxes (e.g., sales and property taxes) or special taxes (e.g., taxes on alcohol and tobacco consumption, hotel rooms, and car rentals) to help bad or operate these facilities (Pitts, Stotlar, 2007). In most cases, team owners receive the vast majority, if not all, of the revenues produced by each facility. There are some privately built arenas and stadiums, but these are the exception. Arenas and stadiums have become large capital responsibilities for most of the governments that host one of North Americas major sports franchises; several local governments now have invested more than $500 million in these facilities.(Brown, 2004) With more than 50 of the United State’s metropolitan areas hosting at least one of the 134 big league franchises, few urban residents are unfamiliar with the arguments that advocates use to attract electoral support to raise taxes to build a facility. Mayors and governors argue that teams and the facilities they use (1) generate economic growth through high levels of new spending in a region, (2) create a large numbers of jobs, (3) revitalize...
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