Taxpayers Taking a Beating on New Stadiums

USA TODAY, April 1998 | Go to article overview

Taxpayers Taking a Beating on New Stadiums


American taxpayers as well as sports fans will continue to pay through the nose for pro sports until they decide to outlaw the monopoly status of professional sports leagues, maintains Stanford (Calif.) University economist Roger Noll, co-author of Sports, Jobs and Taxes. Nearly half of the professional sports teams in America either are playing in a new arena or expect to within a few years. The cost of this $7,000,000,000 stadium construction boom is subsidized heavily by Federal and local taxpayers, and the tax bills won't stop piling up until all 115 teams have new facilities, he predicts.

When all the teams have new arenas, they will want even better facilities. "It's never ending. As soon as the bloom is off the lily, as soon as the newness effect of these stadiums begins to wane, then we'll start all over again." The National Football League, for example, is a cartel of team owners that is able to extract monopoly prices in the form of public subsidies because they have no competition. "The NFL will always see to it that there are a few cities who are hungry for a team but don't have one Their business plan is to keep the wolves at the door, so a team can make a case for more subsidy every time a lease expires."

Some taxpayers get stuck paying more than others. In San Francisco, where voters first balked at more expensive stadium proposals for the Giants baseball team and the 49er football team, the financing for two new stadiums still will cost each city resident about $10 a year for 25 years, Noll calculates. In neighboring Oakland, the recent $135,000,000 in renovations for the football Raiders and Golden State Warriors basketball team probably will cost that city's smaller population about $50 per capita per year, and the baseball Athletics are threatening to leave unless something is done for them.

In Seattle, where the voters also initially balked, the football Seahawks managed to win a statewide referendum to spread the costs over the state's population.

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