Neil deMause on the Problematic Economics of Professional Sports Arenas

by Reihan Salam

It’s not just Seattle hoops fans who should find Neil deMause’s latest for Slate dispiriting. He explains that the arena business is not as profitable as it once was, thanks to the fragmentation of the music industry. And while an arena that hosts professional basketball and hockey might be able to pay off its gargantuan construction costs over time, it would be difficult for it to also pay off the steep price of acquiring a franchise in the first place. This is why we so often see public sector bailouts of sports arenas: it’s just not a very attractive business. 

This landscape suggests that the professional sports world is ripe for business model innovation.