Voters are catching on to public officials’ money-losing vanity projects.
Voters are catching on to public officials’ money-losing vanity projects.
W e are big fans of Virginia governor Glenn Youngkin, so it was sad to see him come down with “stadium syndrome,” an affliction that causes elected officials to lose all common sense and want to subsidize hugely expensive sports venues that benefit their wealthy owners.
It was a relief to see last month’s collapse of Youngkin’s plan to commit $1.5 billion in borrowed state funds to subsidize billionaire Ted Leonsis’s relocation of the Washington Capitals and Wizards to Alexandria, Va.
Stanford University sports economist Roger Noll has conclusively proved that publicly subsidized football and baseball stadiums are consistently money-losing ventures. While a handful of arenas may break even with minimal subsidies, no facility with a subsidy exceeding $200 million has ever achieved profitability.
No wonder University of Chicago economist Allen Sanderson says that “if you want to inject money into the local economy, it would be better to drop it from a helicopter than invest it in a new ballpark.”
Voters are catching on to the bad cost-benefit reality of subsidized stadiums. Last week, 58 percent of voters in Jackson County, Mo., rejected a proposal to raise the sales tax to fund a new downtown ballpark and make major renovations to another stadium. Even the success of the Kansas City Chiefs in winning three Super Bowl titles in the past five years holds no sway with voters. Last year, 56 percent of voters in Tempe, Ariz., rejected a new arena for the Coyotes, the state’s National Hockey League team. Between 1990 and 2016, voters nationwide approved taxpayer subsidies for 70 percent of the potential sports-stadium-related projects put before them. Since then, a majority of the votes have gone against tax-dollar-hungry stadium owners.
This is why team owners and sports-struck officials are now avoiding consulting the voters. Witness last month’s opaque decision by New York officials to spend $850 million in public money on a new Buffalo Bills stadium. Or the recent push by Tennessee officials to spend $2.1 billion on a new stadium for the Titans, with the Nashville City Council chipping in $500 million in state aid, which never went before voters. Or last November’s decision in Maryland to spend $430 million in state funds on renovating the Baltimore Ravens’ stadium. Rich Tamayo, the team’s vice president for stadium operations, admitted that the existing facility is “already considered by many to be top-of-line.” Yet he claimed that “we must remain cutting-edge and captivating.” Wouldn’t that money be better spent building a new “cutting-edge” Baltimore harbor bridge?
There is a better model. Los Angeles Rams owner Stan Kroenke opened a $5 billion football stadium in 2020 as the centerpiece of a development that will include apartments, offices, retail stores, parks, and a theater — this was privately financed, and it stands a better chance of spurring local economic growth and benefiting residents.
Public officials love new sports stadiums because they can serve as a “legacy.” It’s time to call time-out on their “edifice complex” — and voters increasingly agree with that idea.