Sunday, January 13, 2008

The Real Cost of Stadium Spending

The booming economy of the 1990s spawned a building craze for pro sports. Team owners convinced state and local governments to build new stadiums and arenas for them, with the threat of moving to another city as the alternative. Seventy-two new venues were built between 1990 and 2005, creating a new home for two-thirds of the teams in the NFL, NBA, NHL, and Major League Baseball. The argument team owners made was that having a major league team boosts your city's prestige, creates jobs, and helps stimulate the local economy. It's hard to argue the first point, but it's much tougher to find evidence for the economical claims.

Back in the late-1990s, Indiana University professor Mark Rosentraub studied stadium financing in five cities. In his book Major League Losers, he meticulously demonstrated that pro sports produce very few jobs with little ripple effects in the community, take away business for suburban entertainment and food venues, and often leave municipalities with huge losses.

Now, Pulitzer Prize winning journalist David Cay Johnston takes that argument one step further. In his new book Free Lunch, he argues that stadium subsidies do more than just redirect tax money to wealthy team owners, they force local governments to cut funding for other services. In a recent interview on NPR's Fresh Air with Terry Gross, Johnston said:

Because governments are spending money on baseball stadiums and football stadiums and other arenas, they don’t have money for youth programs and for parks. And I show in the book that this subsidy...and some others are intimately connected with the rise of youth gangs in America. Because we’ve starved our parks for money and recreation, we have eliminated all sorts of programs.

Regardless of your political views, it's hard to get around the dichotomy this situation creates. Conservatives complain about how much we spend on social programs. Liberals lament the growing numbers of people without health insurance. But as a society, we're willing to spend hundreds of billions of dollars to build sports venues for millionaire team owners. That just doesn't make any sense to me.