Public Funding for Stadiums

The funding of sports stadiums has recently been a very hot topic in the sports media. Most of the modernly built stadiums have been publicly funded, which begins a large debate. What rewards does the community receive when a stadium comes to town? Is a sports stadium a positive or negative investment for the community? This debate hits close to home with the city of Cincinnati recently constructing two new stadiums for the local pro teams.

When addressing this debate I broke the problem into four main aspects: a complete overview of the numbers, the positive effects of having a stadium and or building a stadium, the vice versa with the negative effects of stadiums in the community, and lastly I concentrated on the stadiums here in Cincinnati and more specifically Paul brown stadium who houses everyone's favorite team the Cincinnati Bengals.

In the last fifteen years no professional stadium has been built in the United States without funding from the public. Since 1990 over seventeen billion dollars have been paid out for construction and renovations of stadiums. Nearly eleven billion of the seventeen has been provided by public funding, which equals out to over sixty percent of total funding. When money is spent on renovations to the stadiums it tends to be especially wasteful since it's proven to not really spark anything new. Renovations fail to raise ticket sales, or raise money spent at concessions. Most Renovations are for safety and health code reasons. With safety codes always changing many stadiums must do small renovations to stay operational. Construction of new stadiums however does bring new revenue to the community; I will speak about this more when I address the positive effects later on in the paper. Money which is collected for the stadiums is often forced out of the local government. Team owners will often argue that they can move to another city which will bring in more local funding. The team leaving would then stick the community and local government with an empty stadium and no team in their city, which is a huge problem and loss of money. Also if the city is looking to bring a new team to their city they must do many of the requests of the team owners or the team will look elsewhere. This public money used for funding is collected in several different ways. The most common would be a raise of a sales tax, much like hear in Cincinnati is a great example. The sales tax paid in Cincinnati was raised one-half cent on the dollar to fund the stadiums downtown. Other possible ways of raising public money is through a raise of the tax on tobacco and alcohol; this has been highly effective in cities such as Cleveland. The last main tax collected for funding stadiums would be a tax on hotels, the idea for this is that with the building of the stadiums more people will come to watch the game, and hence more people will need hotel rooms. The numbers used to build stadiums (an average of 250 million) is hard to even fathom. The common student like me has a hard time sometimes getting a grip about how much money is really being spoke of when talking about the construction of the stadiums.

Now that the numbers in question have been addressed I would like take a view of the positive effects which occur during and after the construction of a new stadium. The first positive effects of a new stadium transpire during the construction of the stadium itself. Building a stadium takes about every kind of construction and union worker. Electricians, concrete workers, pipe fitters, steel workers, and even plumbers are all much needed in the completion of a project as big as a stadium. The construction of a stadium takes thousands of workers and millions of man hours. This will brings millions of dollars to the pockets of the workers of the local economy. As shown in history large construction projects much like the Hoover Dam have been great boost to the economy. This also mainly boosts the economy of local and American workers, and not outsourced money which also leads to another debatable issue. Once the stadium has been built and the team is in place the stadium has to then hire thousands of more workers. These workers will maintain the upkeep, sell merchandise, sell tickets, and whatever else needed. The stadium will also of course bring fans to come buy this stuff and watch the game. These workers and fans are bringing money which will stimulate the local economy. Yet another positive factor to building a stadium and having sports teams is the effect it has on the market of tourism. Tourism will rise for the obvious reason that people will come to see the team play, in addition to watch the opposing team. Also sports teams have the effect to put a city on the map. For a working example few people know much about the city of Cincinnati, but they do know that the Reds and the Bengals both play here. It's no secret that the largest and most popular cities house sports teams. A telling reality is that in the thirty eight metro areas which house sports teams; fifty percent of the population is also housed. It's an actuality that people flock to cities with sports teams. Also stadiums tend to bring new business and new companies to the local economy. Lastly the idea of a multiplier effect is another great positive outcome on the economy. The multiplier effect is the idea that there is so much economic growth in the community that this will produce even more jobs and more money spent, which will then add to more tax revenue.

Along with the good there is always some negative effects, with stadiums there are lots of negative effects. There are so many negative effects that fuel the question if stadiums are even worth it. The problems begin with the issue that the profits of stadiums never seem to reach the public who pay for the stadium directly. Ask yourself when the last time you received a check from the Bengals. The public isn't on the payroll so to speak. Any time you choose to go see a game in the stadium that you and your neighbors funded, you pay high prices again, begins to feel like double jeopardy. Profits are all collected by the team owners, players, and the powers that be. Very rarely those people who are collecting profits had little or no funding on the stadium in the first place. Sports franchises are perfect examples of oligopolies which is an idea we spoke of in class. An oligopoly is the idea that few firms are in a market and dominate, there is no competition really and the market is very difficult to enter. Along with sports teams, car manufactures, energy providers, and shoe companies are also great examples. This is why teams