Commentary

Squeeze Play: Do Baseball Stadiums Need Our Bucks to Get Built?

By Raymond J. Keating
This article appeared in the Washington Post on April 5, 1999.

Baseball’s Opening Day offers a delightful mix of nostalgia for seasons past, and optimism for the coming year. But for taxpayers, the first game of the season is also a pretty good time to ponder ever-larger government handouts to millionaire team owners and players.

Over the previous five Opening Days, five new ballparks entered the major league ranks…four heavily subsidized by taxpayers. No new stadium will be christened at the start of this season, but fear not: the Seattle Mariners will move into the new Safeco Field in July. This retractable roof, 45,600-seat ballpark will cost an estimated $498 million, with taxpayers picked off for $372 million.

Opening Day in 2000 promises to be a high-scoring affair, with new ballparks opening for the Houston Astros, Milwaukee Brewers and San Francisco Giants. Only the Giants’ new stadium will be funded primarily with private dollars. Of course, baseball is not the only sport on the dole. Football, basketball and hockey teams regularly extort city and state politicians for taxpayer subsidies. During the twentieth century, more than $20 billion (measured in 1997 dollars) has been spent on major league stadiums and arenas, including a minimum of $14.7 billion in taxpayer subsidies. This does not include billions of dollars in subsidies through the use of tax-free municipal bonds, and interest paid on debt.

Looking at the rest of 1999 and over the next several years, another conservative estimate points to more than $13.5 billion more being spent on new major league sports facilities, including more than $9 billion from the taxpayers.

Team owners say they need taxpayer assistance because sports facilities can’t possibly be built otherwise. Of course, this ignores the fact that in the early part of this century, most sports venues came to life without any government assistance. The private sector gave us such gems as Detroit’s Tiger Stadium, Boston’s Fenway Park, the Bronx’s Yankee Stadium, Brooklyn’s Ebbets Field, Philadelphia’s Shibe Park, and Chicago’s Wrigley Field, to name just a few. And in the 1990s, Toronto’s Air Canada Centre, Atlanta’s Turner Field, Montreal’s Molson Centre, Vancouver’s General Motors Palace and Chicago’s United Center were built with either no or tiny government subsidies. Looking ahead, new arenas in Columbus, Ohio, Los Angeles, and Denver will soon open with little or no government aid.

As for the politicians willing to spend tax dollars on sports facilities, they are a bipartisan team. For example, the Republican lineup includes Wisconsin Gov. Tommy Thompson, a leading welfare reformer who fought hard for stadium handouts for the Brewers; Indianapolis Mayor Stephen Goldsmith, a privatization whiz who nonetheless came up with government dollars for a new arena for the Pacers; and New York City Mayor Rudolph Giuliani, who seems to be sports crazy as he proposes new facilities to house the Yankees, Mets, Jets, Knicks, Rangers and a couple of minor league baseball teams.

Meanwhile, the Democrats include Maryland Gov. Parris Glendening, who has spent big taxpayer bucks on a new football stadium for the Ravens and a lesser amount for improvements around the Redskins’ new field; Washington Gov. Gary Locke, who helped push through taxpayer subsidies for the Mariners’ ballpark as a county executive, and now D.C. Mayor Anthony Williams, who recently declared that baseball would be an economic home run for the District.

Indeed, almost all sports-happy politicians justify subsidies by claiming that stadiums and arenas are economic engines, and they point to supporting reports from hired-gun consultants that amount to the worst kind of economic guesswork. More realistic economic analyses examine actual changes in the economy resulting from the presence of stadiums and arenas. These studies have consistently found no positive impact from professional sports, or even a possible negative.

Considering stadium-related tax increases and expansion of government, this should surprise no one. Some solutions to taxpayer-subsidized stadiums, however, only make matters worse, such as a handful of politicians and activists suggesting government ownership of sports teams. Other ideas, such as requiring voter approval for sports subsidies and eliminating the tax deductibility of municipal debt used to finance stadiums, are steps in the right direction. But the costly battle over sports pork will likely continue, too often marring the beauty of baseball’s Opening Day-not to mention kickoffs, tipoffs and face offs far into the future.

Raymond Keating is the author of Sports Pork: The Costly Relationship between Major League Sports and Government, a policy analysis from the Cato Institute. He is chief economist for the Small Business Survival Committee, a weekly columnist for Newsday in New York, and a partner with Capitol Hill Research, a political and economic analysis service.