University of Central Florida

Public Funded Sports Stadiums

Megan Tavares
HFT 4469: Financial Performance in Entertainment
Professor Goyzueta
8 December 2022
 Out of the 30 NFL stadiums across the country, only 3 stadiums are entirely privately

funded. Meaning that 90% of NFL stadiums have used some kind of public funds to build their

massive sports grounds (Watson). Public funding for professional sports stadiums is not

exclusive to the NFL. Between the years of 1953 and 1970 the construction of 27 out of the 30

MLB stadiums received more than $450 million in total of public funding for their creation

(Wikipedia). The NBA is also quite familiar with this funding method. With 18 of the 29 NBA

arenas having some type of public funding (HispanoNBA). These arenas and stadiums house

many of the best athletes in the world and generate business and money for their communities.

But there is an important question at hand, could the enormous amounts of money that are

funding these sporting facilities be of better use elsewhere? A place that could serve these

communities even better. And if so, how could these stadiums be privately funded? Do these

sports stadiums contribute to their communities as much as advocates say they do? These are the

questions I will explore and the questions I aim to answer throughout this paper.

The biggest advocates and supporters of publicly funded stadiums are often the owners of

the teams. If the people in the community agree to have their tax dollars go towards the

construction of a stadium, then the owner doesn’t have to front that bill. Certain owners and

proponents of publicly funded stadiums argue that professional sports stadiums create jobs and

generate business for the city. Zimbalist and Noll cite four reasons for this support in their article

Sports, Jobs, & Taxes: Are New Stadiums Worth the Cost? The economic rationale of these more

centralized thinkers is firstly, that the physical building of the stadium will create construction

jobs. Local employment will theoretically be expanded due to the hiring of employees to work

for the team or to work the games; and local spending will increase when fans attend the game.

The professional team should also attract tourists, companies, and non-local fans to the city,
again increasing spending. And lastly, advocates argue the multiplier effect, that the increased

local income generates even more local spending and jobs. These ideas are generally repeated by

the supporters of publicly funded stadium; that stadiums generate local spending, jobs, and out of

area spending that would otherwise not be spent in the city (Bradbury).

Apart from economic benefits, supporters believe that there are social benefits as well.

Housing a professional sports team can “help to boost the city’s reputation and image” (Sports in

Seattle). Professional teams can also help communities grow stronger and become more unified,

by building a shared sense of pride for their team and their city (Sports in Seattle). It is

indisputable that professional sports can bring a community together by encouraging people to

get involved in and connect with their communities. Stadiums are often filled with locals who

love the game, giving people the capacity to meet likeminded individuals in their community.

Businesses will often share their support of their local teams with posters and signs on their

building, and on game-day bars are often filled with local fans who are supporting their home

team together.

Though, it seems that the use of private funds for sports infrastructures seem to garner

more support. The argument here is that publicly funded stadiums don’t actually provide as

many economic benefits that advocates claim they do. Michael Leeds, a sports economist at

Temple University built a case study on the city of Chicago to determine how much their sports

teams actually contribute to the city. He determined that “if sports teams disappeared from

Chicago overnight, meaning the Bears, Bulls, Blackhawks, White Sox and Cubs all ceased to

operate, the net loss to the city would be 1 percent” (Dator). He also found that “the actual

economic impact of a full MLB season on the local Chicago economy equated to the same as a

mid-size department store” (Dator). Zimbalist and Noll add to this narrative finding that many
promotional studies claiming that teams bring enormous amounts of revenue to the cities they

reside in, are actually confusing gross and net economics. Zimbalist and Noll point out that most

of the spending that occurs inside the stadium is "a substitute for other local recreational

spending, such as movies and restaurants.” These findings clearly contradict the economic

benefits that supporters of public funded stadiums claim.

The late owner of the local Tampa Bay Buccaneers, Malcom Glazer didn’t pay a single

cent for the construction of the $168.5 million stadium in 1998. All the money came from a 30-

year half cent sales tax. This tax raise was passed after Malcom threatened multiple times to

move the team. After it was passed, Malcom pointed out that the then newly passed tax didn’t

just cover the stadium build, but 90% of the funds were allocated for fire, education, police,

roads, etc. (Smith). Which is an added value of the tax. The threat of moving a team is not an

isolated occurrence. This has been a trend; many owners have done this before when lobbying

for a city to pass a tax increase for a new stadium. In 1999, the Bengals opened a new stadium,

after threatening to leave unless they were accommodated. The Hamilton County taxpayers

agreed to a lopsided deal “that Wall Street Journal later deemed ‘one of the worst professional

sports deals ever struck by a local government’” (Watson). And sometimes, that move actually

happens. Like in 2008, when the Seattle Sonics moved to Oklahoma City after a “disagreement

over arena funding” (Dator). Or when the Cleveland Browns moved to Baltimore when “owner

Art Modell moved and renamed the team in 1996 in frustration after not getting a new or

renovated stadium in Ohio.” But the Browns returned in 1999 after “Cleveland agreed to build a

new stadium for the team” (Watson). These threats essentially influence fans to vote yes on a tax

increase to fund a stadium, so their favorite team doesn’t leave their city.
 The public sourcing of funds for stadium builds can even require taxpayers to continue to

pay for the stadium even after the team has left. This is the case in St. Louis, previous home to

the Rams before they moved to Los Angeles in 2016. The Rams stadium opened in 1995 in St.

Louis, and 27 years later they are still paying $6 million a year on debt, that accrued from the

construction of the Edward Jones Dome (Povich). In 2019, Missouri still owed $60 million on

bonds (Hoskins).

Economically, the support of privately financed stadiums would be a decentralized idea

because the building of the stadium would rely on the individual and would involve less

government interference. Although, privately funding stadiums this way would benefit

communities as a whole because these funds could be used elsewhere to serve the community

entirely.

What makes this matter even more frustrating, is that privately funded stadiums are

completely possible and there is proof. Take the most recent stadium build. The Los Angeles

Rams owner Stan Kroenke, whose net worth is over $10 billion, covered the cost of the new,

extremely modern, SoFi stadium that costed about $2 billion. The city is providing tax breaks

that are estimated to reach about $100 million. MetLife stadium home to the New York Jets and

Giants, was privately funded by the 2 teams. The owners of the NFL Patriots paid for Gillette

Stadium (Watson). The Philadelphia 76er’s announced this summer that they are set to build a

new arena that is completely privately funded and estimated to cost $1.6 billion (Chavkin). 11 of

the NBA’s arenas are privately funded. These examples show that privately funded stadiums are

very much possible, especially when the owners can potentially receive tax breaks for their

contribution.
 In conclusion, the method of privately funding stadium builds would free up taxpayer’s

funds, while allowing the communities to still receive the benefits of having a professional sports

team in their city. If more stadiums were privately funded, taxpayers’ money could go elsewhere.

Such as public health programs, education, libraries, public transportation, and many other

valuable causes. The movement of public funds from something that is not serving the collective

as a whole and shifting them to something that would work better for society is a centralized

idea. I think this kind of economics would apply best here. I believe that the millionaire owners

should pay or find private funding for their team’s stadiums. They should stop threatening to or

actually leaving the city when they can’t get the residents to pay for a new stadium. Overall, the

private funding of stadiums is the most logical and economically sensible approach to building

sports stadiums.
 References

Bradbury, JC |. “So, Your City Wants to Build a Sports Stadium?” Global Sport Matters, 15 June

2022, https://globalsportmatters.com/business/2022/06/15/so-your-city-wants-sports-

stadium/

Chavkin, Daniel. “76ers To Build $1.3 Billion Arena in Philly's Center City.” Sports Illustrated,

Sports Illustrated, 21 July 2022, https://www.si.com/nba/2022/07/21/76ers-to-build-1-3-

billion-privately-funded-arena-phillys-center-city

Dator, James. “Publicly Funding Stadiums for Billionaires Is a Scam.” SBNation.com,

SBNation.com, 9 June 2021, https://www.sbnation.com/2021/6/9/22525916/public-

funding-stadiums-nfl-panthers

Hispanosnba.com. “NBA Arenas.” Hispanosnba.com, https://en.hispanosnba.com/nba-arenas

Hoskins, Denny. “Politifact - How Much Debt Does Missouri Still Owe on the Formerly Named

Edward Jones Dome?” @Politifact, 16 Apr. 2019,

https://www.politifact.com/factchecks/2019/apr/16/denny-hoskins/how-much-debt-does-

missouri-still-owe-formerly-nam/

“List of Major League Baseball Principal Owners.” Wikipedia, Wikimedia Foundation, 3 Nov.

2022, https://en.wikipedia.org/wiki/List_of_Major_League_Baseball_principal_owners.

Povich, Elaine S. “Why Should Public Money Be Used to Build Sports Stadiums?” PBS, Public

Broadcasting Service, 13 July 2016, https://www.pbs.org/newshour/nation/public-money-

used-build-sports-stadiums
Smith, Alexandra, et al. “The Politics of Sports Stadiums: Public vs. Private.” Cooper Squared,

28 May 2021, https://coopersquared.com/2021/05/28/the-politics-of-sports-stadiums-

public-vs-private/

Sports in Seattle. “How Professional Sports Teams Benefit Cities.” Seattle Seamocks, 8 Mar.

2022, https://seattleseamocks.com/sports-in-seattle/sports-teams-benefit-cities/

#:~:text=When%20a%20city%20is%20a,being%20supportive%20of%20its%20athletes

Watson, Stephen T., and Jayne Kamin-Oncea/Associated Press. “Pay to Play: How 21 NFL

Stadiums Have Been Financed.” Buffalo News, 25 Mar. 2022,

https://buffalonews.com/news/local/pay-to-play-how-21-nfl-stadiums-have-been-

financed/article_319a3686-0c28-11ec-a568-dbcbdd817498.html

Zimbalist, Roger G. Noll. “Sports, Jobs, & Taxes: Are New Stadiums Worth the Cost?”

Brookings, Brookings, 28 July 2016, https://www.brookings.edu/articles/sports-jobs-taxes-

are-new-stadiums-worth-the-cost/