Weighing Public Investment in Professional Stadium Development: From ballot box to game day
In the past year a dozen professional sports teams were in the midst of new stadium developments or announced they were renovating current venues or moving. Closest to home is the Kansas City Chiefs and the Kansas City Royals. Many of these projects, with cost projections in the billions rely on requests for generous public financing with promises of significant community advantages.
There’s no question that public incentives that lure new and viable businesses can benefit communities through job creation, increased income infused into the local economy, the attraction of skilled labor and increased tax revenue. New businesses create new jobs, and may provide increased opportunities for their employees.
The arguments for major modifications to existing stadiums, or the construction of new stadiums, include projections of economic advantages for the region through an influx of dollars and development. Measuring the value of public investment in stadiums is a complex equation of economics and emotion.
Major league sports teams create local jobs, provide opportunities for suppliers and partners and can contribute to a community’s sense of pride and connection. Sports teams, whether they are winning or losing, provide a source of connection and are often at the core of a city’s identity and a point of pride. This connection – to the team, community and fellow fans – creates a strong identify that feeds civic pride.
As stadiums age, it’s not unusual for teams to seek public funding for a new facility. Repairing existing stadiums is significantly expensive and does not always allow for upgrades that bring facilities in line with the league. If teams are unable to secure these upgrades, they may decide to move to another city in order to obtain the state-of-the-art facility that fans have come to expect.
Losing a sports team can be distressing to fans, but ultimately, the real economic impact of building a new stadium can be surprising. In the past, providing public funds for stadiums has not generated the economic return that teams promise or the public expects.
Often, what is unrecognized in the decisions to support new stadiums is where the money doesn’t go. The same level of public and private support in a community’s human capital through education, support systems and job training would have a multi-generational impact through economic growth and an increase in skilled labor in the community.
Investing in infrastructure, such as roads and bridges, would increase productivity and impact a much larger component of the population. A new airport may extend the city’s opportunities for more nonstop flights and an increased number of destinations, encouraging new businesses to relocate.
In general, stadium development does not have this impact. Rather than generating new income, it results instead in diverted spending. Entertainment dollars spent at the ball park is money not spent at a restaurant, mall or movie theater.
The promise of increased revenue through the number of stadium employees who will frequent businesses in the area can be negligible. While the number of game day employees is approximately 2,000, professional sports teams generally employ from 125 – 175 professionals during the work week. But increased support of surrounding businesses in conjunction with games and events could be a boon to neighboring businesses, increasing both profits and jobs.
There’s no question that thriving professional sports teams are a source of pride for the cities that they call home and their residents. Weighing their contribution and cost to communities may continue to be ongoing question for the cities that house them.