Out of Control Policy Blog

Suckers for Stadiums

Over the years, one type of corporate welfare has been remarkably resistant to pubic outrage: publicly financed sports stadiums. The scenario usually involves a very wealthy businessman who owns some local pro sports team – let’s call them the Boondogglers.

The owner notes that other cities have used local tax dollars to fund state-of-the-art stadiums. The only way for the Boondogglers to remain competitive, the argument goes, is for the city to build them one these jazzy new edifices. The new stadium will generate lots of new revenue for the team to hire first-rate free agents. Plus it will kick-start the local economy and residents will ride a new wave of Boondoggle-related economic activity.

And if the city doesn’t pick up the tab for the new stadium? Well, the owner may just have to take his team to a more accommodating city, and the fans would lose their beloved Boondogglers.

The city quickly grows fond of the proposal. After all, a fancy new stadium, better players, jobs a plenty – sounds like a pretty good deal. Except that there’s usually a huge gap between promises made and promises delivered. Stadiums rarely become any kind of economic hub and sales from food and merchandise tend to benefit the stadium itself not the other, smaller shops that had previously provided pre-game beers and oversized foam hands.

Sure Americans are suckers for stadiums. But at least we don’t operate like some European pro soccer teams – where the cities buy most anything the team wants, including players. European soccer powerhouse Real Madrid just bought England’s most celebrated soccer star/tabloid hunk for $41 million. Franklin Foer reflects on Spain’s tradition of government-financed soccer:

“Like so many European business stories, Real Madrid's success begins with government help. Generalissimo Francisco Franco adored the team, lounging around his palace on weekends and watching it on television; his dictatorship allegedly secured Madrid the best players of the day. And this is not only distant history. In 2000, Madrid's right-wing City Council paid about $350 million to buy the club's training ground. Real Madrid deploys its wealth with patience and acumen. Each year the club commits to one new merchandise-selling megastar. In consecutive seasons, they have imported the Portuguese dervish Luis Figo, the French playmaker Zinedine Zidane, and Ronaldo, arguably the greatest collection of talent in the game's history.”

Ted Balaker is Producer


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