Business
Research shows taxpayer stadium funding benefits billionaire owners, not cities
By Jake Beardslee · February 10, 2024
In brief…
- Owners increasingly develop real estate like housing around new stadiums for extra revenue
- Cities provide public funding for stadiums, while owners gain land rights
- Owners use their leverage from fan demand to get sweetheart deals from cities
- Research shows stadiums fail to benefit cities, while owners profit
Professional sports franchises have increasingly turned to real estate development as a new revenue stream, building luxury housing, retail, and entertainment around stadiums. Billionaire team owners have constructed dozens of new arenas, often using hundreds of millions in taxpayer dollars. One study found that $33 billion in public funding supported stadium construction from 1970-2020, with a median 73% of costs covered by taxpayers.
As part of agreements with cities and states, teams gain valuable rights to transform land near stadiums into offices, apartments, and malls. “Owners can make more from development rights than operating the stadium itself,” said Geoffrey Propheter, a sports economist at the University of Colorado Denver, in an interview with CNN. Sweet land deals help subsidize skyrocketing stadium costs.
Owners’ market power from increased fan interest in sports allows them to demand generous public funding and development rights, forcing cities into competition for teams. Most research finds stadium investments rarely benefit cities economically.
The modern trend is toward mixed-use projects like LA’s SoFi Stadium. Nearly every proposed stadium now includes retail, dining, housing, and more. “Stadium subsidies transfer wealth from taxpayers to billionaire owners,” concluded one study. Real estate helps owners profit from the sports monopoly.