Stadiums and Arenas: Economic Development or Economic Redistribution?

By Coates, Dennis | Contemporary Economic Policy, October 2007 | Go to article overview
Save to active project

Stadiums and Arenas: Economic Development or Economic Redistribution?


Coates, Dennis, Contemporary Economic Policy


This article explores the literature on the impact of professional sports teams and stadiums on their host communities. A large body of research has addressed these issues, some of it academic and much of it for hire by team and sport boosters. The broad conclusion of this literature is that stadiums and franchises are ineffective means to creating local economic development, whether that is measured as income or job growth. There may be substantial public benefits from stadiums and franchises, but those too are insufficient to warrant large-scale subsidies by themselves. In combination with consumer surpluses from attendance, however, subsidies may be efficient. (JEL R58, J30, H71, L83)

1. INTRODUCTION

In the past 20 yr, stadium and arena construction has occurred at an incredible pace. Cities that had one stadium for both baseball and football suddenly needed stadiums dedicated to each individual sport. Cities without professional sports franchises believed that the way to attain a franchise, either through movement of an existing team or through expansion, was to build a state-of-the-art facility. Teams used the existence of willing suitors to pressure their home towns for bigger, better, and more modern facilities for sweetheart deals on the use of the facilities and, even to a share, sometimes 100% shares, of the revenues generated by the publicly owned facilities.

All this stadium-related activity attracted the interest of academic and nonacademic public policy analysts. Millions of dollars of public spending on stadiums for professional sports franchises, while streets needed repair and schools and other vital public services were facing cuts, made subsidies for stadiums even more attractive an issue to researchers from economics, public policy, sociology, political science, and sport management. The nature of the research was and is as varied as the background and training of the individuals conducting it.

I focus on the research on the public sector side of construction of stadiums and arenas. (1) I restrict attention to two general issues in the literature. First, I review the literature on the relationship between construction and operation of the facilities and economic outcomes in the host community. (2) Second, I review the research into the politics of stadium and arena subsidies. Researchers have studied the referendums on subsidies, wherein the voters get a chance to express their support for or opposition to the public subsidies, and the process by which stadium construction gets onto the public agenda. Besides the general effects on the economy, new stadium construction is also justified as necessary to attract mega-events such as the Super Bowl or All-Star games. An active literature focuses on these events but is neglected here due to space limitations.

The next four sections focus on separate aspects of the public sector issues. In order, I discuss the size of the stadium and arena subsidies, the relationship between facilities and economic outcomes, the politics and campaigning surrounding facility construction, and the future of this literature. Finally, a concluding section recaps the issues.

II. SUBSIDIES

A discussion of stadium and arena issues must address the cost of these facilities and the extent to which public money is used to finance them. It is also important to understand how the characteristics and the prospective uses of the stadiums have changed over time. Perhaps, the first published work to provide this information is from 1926 in a journal called The Playground. The article notes that "Not only universities but cities and high schools and private agencies are also joining the stadium ranks and building large structures to accommodate the crowds who attend the athletic activities, festivals, pageants and other large community events." A building boom was in progress at the time as the number of stadiums rose from.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Stadiums and Arenas: Economic Development or Economic Redistribution?
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?