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Critical Theorists and the Financing of Sport Venues

This is an excerpt from Social Issues in Sport, Third Edition, by Ronald B. Woods.

Applying Social Theory

How would a critical theorist respond to the public financing of sport venues? Explain your answer. Here’s an example to ponder.

As of 2015, the NFL’s Minnesota Vikings franchise is building a new stadium worth about $1 billion with substantial help from the state of Minnesota (contributing $348 million) and the city of Minneapolis (contributing $150 million). The remaining cost of $526 million is being covered by the football team and private contributions. As things tend to go, it’s not a bad deal for taxpayers, who on average tend to pay about three-quarters of the cost of sport venues. But let’s take a step back and ask if this is the best investment that a city could make.

Proponents of public financing often point out that new venues bring jobs, economic activity, and tourist dollars to the area. But critics, such as sport economist Victor Matheson of the College of Holy Cross, point out that if local people spend discretionary money to see a ballgame, they don’t spend it at other local businesses, such as restaurants and movie theaters. In fact, most sport economists agree that, in the final analysis, new sport facilities generate little economic benefit for the surrounding area (Matheson 2010, 2014; Long 2012). In addition, the jobs they create involve primarily seasonal and low-wage employment.

Matheson sums it up this way: "If someone says a sports team is a great amenity for local people and something that makes them happy, fine. We do have flat out evidence that sports makes people happy. Just don’t claim that it’s going to make us rich" (Nohlgren 2013).

In Atlanta, they finally said no to the Atlanta Braves, who wanted a new baseball stadium. The Braves announced in 2013 that they were moving to nearby Cobb County, an affluent Atlanta suburb, because the financial opportunity was simply too good to pass up. No city mayor wants to be blamed for losing a sport team, but Atlanta mayor Kasim Reed had already committed to a deal to help pay for a new stadium for the Atlanta Falcons football team. His reasoning was that the Falcons would be a revenue generator for the city and would be funded through a hotel-motel bed tax. Even better, the city won’t be on the hook for the $1.2 million debt for the football stadium. However, the bed-tax money has a limit, and the city simply couldn’t afford to build a stadium for the Braves.

In U.S. cities with tight budgets and aging infrastructure - including roads, bridges, sidewalks, schools, and green spaces - many taxpayers don’t see the sense in dedicating money to sport venues. Of course, fans of professional sport teams may be more willing to pay the price, but the drama is playing out across the land as more cities struggle with these costs. Is it worthwhile to saddle the city with long-term debt in order to enrich sport franchises that are uniformly owned by millionaires?

So what is a fair split between public and private funds? Sport economist Judith Grant Long says that such deals may be reasonable for cities if they stick to providing land and some infrastructure, such as road and sewer improvements (Long 2012). In this view, given that infrastructure expenses usually account for about 25 percent of a venue’s total cost, a reasonable deal would be in the range of a 25-75 split between public and private funding. Unfortunately, that split is just the reverse of the typical pattern up to this point.

Learn more about Social Issues in Sport, Third Edition.

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Social Issues in Sport-3rd Edition

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