The Sports Stadium Lesson: Government Spending Doesn’t Stimulate

Ted Bromund / February 19, 2009

As baseball season rapidly approaches, we are reminded that between 1990 and today 18 cities have put up government money to help build new stadiums for their baseball teams. All of these government expenditures were justified on the exact same theory that the stimulus bill was: that government spending creates a multiplier effect that makes the taxpayer investment worth it. That tactic clicks every time, just as it did with the stimulus bill.

But there’s no evidence that using public money to build stadiums is a sensible economic strategy. A 2006 survey of Ph.D. economists in the American Economic Association reports that 85 percent agree that government subsidies to professional sports franchises ought to be eliminated. One critic spoke for hundreds:

I have been studying and writing about publicly financed stadiums for more than 10 years and cannot name a single stadium project that has delivered on its original grandiose economic promises, although they do bring benefits to team owners, sports leagues and sometimes players. (more…)