The Benefits and Necessities of Stadium Funding

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The Benefits and Necessities of Stadium Funding

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
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Even though team owners sometimes acknowledge that the subsidies they receive are related to the scarcity of franchises, owners ' demands for public assistance is more often pressured by financial issues that have changed the financial side of professional sports. For example, player salaries have increased rapidly as a result of athletes earning the right to sell their services to the highest bidders (free agency). Normally, these high bids come from teams in the largest markets (New York, Los Angeles, Chicago, etc.). Since the leagues protect the power of teams in these markets are able to refuse the creation of new franchises or the movement of existing teams into their market areas, the owners of these coveted franchises amass large revenue bases and can thus afford the best players. To offset the advantages of large market teams, owners in smaller regions seek public subsidies that will permit them to earn revenues similar to those of the teams in the biggest markets. (Pitts, Statlor 2007)
Despite increasing costs, bitter political battles over tax support of facilities, and increasing salaries of players, the number of individuals willing to buy teams has not increased. The cost of owning a franchise has increased steadily. For example, the Los Angeles Dodgers were recently sold for more than $300 million, and when the new owners of any franchise invest that much money,
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