Sports Stadiums: Turning Public Money into Private Profit Essay

Mt. Vernon does have other things to look forward to in the town so they would never spend 5.6 million on a stadium. The booster club is only willing to buy jerseys for the team every four years, and those are varsity only jerseys. That means the freshman are wearing jerseys up to ten years old. In fact the school did its first major improvement to the field in decades. The school put in brand new bleachers into the side of a hill because they don 't want to spend the money to make a real stadium. The money for these bleachers didn 't come from the town directly either. It came from hard work of fundraising and the players and players parents doing most of the work. Bryce Cox, a Mt. Vernon lineman, drew a picture that sold for five hundred dollars. It is all going to the football program because the program is doing anything to get money for better gear and more opportunities on the football field.

Thus we can see why public money is eagerly donated. The full costs of a stadium and the damage it does to communities are often years in the future, long after the politician is known for being the hero that save our local team and has moved on to bigger and better things, now with the campaign funding of the very teams that they built homes for and the fans who continue to pay. Team owners can choose new cities but cities can’t choose new teams thanks to the leagues government-sanctioned monopolies over franchise placement, mayors for example, feel they must offer owners anything they want. “Politicians continue

     In every move there are two sides to the politics. There are the teams themselves and there are the cities that fight to keep them. In May 1991, Sharon Pratt Dixon, Mayor of Washington, D.C. said, “We’re going to do whatever it takes to keep the Redskins here. Sports has become an industry, and to the extent that we can guarantee jobs for the District residents, we will do whatever it takes, including building the stadium ourselves” (Euchner 1), this is one view of how a city official fights for a team. The other viewpoint is from the side of the team owner, Al Davis, managing general partner of the Raiders said, “just build it” (Euchner 1). These viewpoints are why sports teams move and cities fight to keep

I am going to discuss the topic of National Football League stadiums and their public funding. The purpose of the study is to find out if funding of NFL stadiums is “bad business,” The research I will look at the impacts that a stadium has on the economy in the city. Cities’ like to have attractions that they can draw from and be proud of. Most cities have some form of sport arena, and more are being built or are planned to be built. As with any business there are positives and negatives when hosting a sports team. Cities pay multimillions to help fund and build sport stadiums for teams. I hadn’t researched or looked into this topic before, so I was very intrigued by this. At the end of this paper I will give my own personal opinion.

Sports Stadiums are an iconic staple of American tradition. However not everything about these venues is positive. Team owners take advantage of laws and fans to meet their own goals. Citizens and city officials from various locations have taken up their grievances with the NFL in the past. And it has gotten to the point where even political parties join together to bring to light issues with the organization. NFL stadiums are not good for cities because they take advantage of tax payers, hurt citizens on an economic level and cost them billions in subsidies.

Then came the concern that the universities built stadiums that were too big. Many feared that there would not be enough people to fill the seats on game day. A majority of the stadiums were built too large for the time period. The teams had to grow their fan basis by winning important games in order to get more people through the gates. Also, many stadiums were built to hold one big game and crowd a year. But, would this one game bring enough money in to pay off the millions of dollars that were spent to build the stadium? The large stadiums eventually paid off when the fan base became larger, but it took years for that to happen. Now, there are so many people that want to come to the games that there is simply not enough room for everyone.

Stadium subsidies are used to fiancé new stadiums. The government provides financial support to franchises that allows them to build their new stadiums. These subsidies are costing tax payers millions and do not seem to be in the best interest of the city the stadium is in. Those in favor of using tax payer dollars to build stadiums argue that the economic impact a professional franchise has on a city is great and a new stadium will help generate revenue. Research has shown this is not the case. Most stadiums cost the city and never produce enough revenue to make up for those costs (Bast, 1990).

Some people might say that building an indoor baseball, softball, and football field is a waste of money and it would be too expensive. Each day people would have to pay a certain amount of money per hour they are there, or they could get a membership. If there are tournaments, the teams have to pay to enter them. Also Eldred could have fundraisers to earn money for the fields.

The issue at hand, however, is that power has shifted from the cities to the teams themselves. Professional athletic organizations have started taking advantage of cities by threatening to relocate unless they get public subsidies for expensive stadium renovations and construction. With this in mind it is imperative to ask today’s question: Do public subsidies for professional athletic organizations benefit their local community?

To aid Cowboys owner and general manager Jerry Jones, whom is stated in Forbes Magazine as being “worth 3.1 billion dollars himself,” (Page 1), in paying the construction costs of the new stadium, Arlington voters approved the increase of the city's sales tax by 0.5 percent, the hotel occupancy tax by 2 percent, and car rental tax by 5 percent. The City of Arlington provided over $325 million (including interest) in bonds as funding, and Jones covered any cost overruns. Also, the NFL provided the Cowboys with an additional $150 million loan, following its policy for facilitating financing for the construction of new stadiums,” (Page 1).

Proponents of subsidizing sports stadiums is a great decision because the economic impact it will have on the community is great for two main reasons. First, sports stadiums are massive construction projects. In fact, one could compare them to a medieval cathedral in their attempts to dominate a skyline and inspire pride in one’s city And, just like these cathedrals, they are very expensive, and massive building projects that would require many years of hard painstaking labor. For example, the proposed stadium for the Los Angeles Rams in Inglewood, California, was predicted to cost $3 billion and add 22,000 construction jobs to the economy of Los Angeles, California. Although construction jobs do eventually disappear once a stadium is constructed once the games begin, so does the massive consumer spending. For example, more than 3.5 million people saw the St. Louis Cardinals play at Busch Stadium in 2015.

In the United States, new sports stadiums are commonly seen as a vital part of the redevelopment of a city having a great economic growth with the production of jobs and a positive income builder. After this, the owners of the pro sports teams with millions and millions of dollars of subsidies for the construction of new stadiums and arenas and expect these facilities to generate economic benefits exceeding these subsidies by large margins. However, a growing body of fact indicates that professional sports facilities, and the franchises they are home to, may not be engines of economic benefit anywhere claims Sachse, “. In reality, sports franchises typically account for a very small proportion of the total economic output of the cities in which they reside.” Some economical studies on the amount of income and employment in US cities find no evidence of positive economic benefits associated with past sports facility construction and some studies find that professional sports facilities and teams have a net negative economic impact on income and employment. It just shows that these results suggest that at best, professional sports teams and facilities provide non-pecuniary benefits like civic pride, and a greater sense of community, along with consumption benefits to those attending games and following the local team in the media; at worst, residents

This directly impacts the projected NPV of the project as almost 95% of the cash flows are derived from this boost in sales. In addition to the financial support, remodeling the Stadium location also fits well with their business strategy. Some of the key supporting evidence includes a high percentage of the target market in the trade area at 42% of college educated adults, and a population with the highest median income of the group at $65,931. Most important to Target however, would be the maintenance of their brand. As a company that places a high value on the image of their brand, revitalizing a lagging store would both keep their presence in the local area and potentially draw more customers to an upgraded location. The final decision would be to accept the project under no budget constraints, but not issue new debt or equity to achieve it.

Unfortunately, these arguments contain bad economic reasoning that leads to overstatement of the benefits of stadiums. Economic growth takes place when a community's resources--people, capital investments, and natural resources like land--become more productive. Increased productivity can arise in two ways: from economically beneficial specialization by the community for the purpose of trading with other regions or from local value added that is higher than other uses of local workers, land, and investments. Building a stadium is good for the local economy only if a stadium is the most productive way to make capital investments and use its workers.

State and local governments have become increasingly responsible for financing many of the new arenas and stadiums demanded by professional sports teams. While local officials have a long history of efforts to attract team to their communities, the task of securing the funds needed to build the required playing facilities is relatively new. During the early years of professional sports through the 1950s, most teams played their home games in a privately owned stadium or arena. Team owners wanted little involvement from the public sector in their business affairs. Later, when publicly funded facilities became more common, the teams and other users paid rental fees that helped offset the