Why do taxpayers pay billions for football stadiums? — Transcript

Explores why taxpayers fund NFL stadiums despite private ownership and the economic impact on cities.

Key Takeaways

Taxpayers fund most NFL stadiums despite private ownership and revenue benefits going to team owners.
Economic benefits promised by stadiums often do not materialize as expected according to experts.
Civic pride and fear of losing teams drive cities to invest heavily in stadium construction.
Luxury seating and corporate sponsorships maximize owner profits at the expense of public investment.
The competition among cities for NFL teams perpetuates public funding of expensive stadiums.

Summary

Most NFL stadiums are financed with public tax dollars, even though the teams are privately owned and earn the revenue.
New stadiums are built frequently, with lifespans now often less than two decades, leading to continuous demand for new facilities.
Public investment in stadiums exceeds $7 billion in the last 20 years, with many cities funding the majority of construction costs.
NFL owners argue stadiums create jobs and boost local economies through increased tourism and spending.
Urban economists generally find that stadiums do not provide significant positive economic impacts compared to other public investments.
Stadiums generate large profits for owners through luxury suites, naming rights, and hosting major events like the Super Bowl.
Cities invest in stadiums partly due to civic pride and the cultural value of having a home NFL team.
Threats of team relocation pressure cities to fund new stadiums to retain franchises.
Examples include St. Louis, San Diego, and Oakland losing teams after failing to secure new stadium deals.
The imbalance between cities wanting teams and limited franchises ensures taxpayers will likely continue funding stadiums.

Full Transcript — Download SRT & Markdown

Speaker A

Gather around their televisions, surrounded by loved ones, to watch the Big Game. And the pinnacle event of the most profitable sports league in the world is more often than not played in a new state-of-the-art stadium with super-sized digital displays, retractable roofs, luxurious box seats, and suites. Teams generally earn the lion's share of the revenue from the stadium.

Speaker A

But for 28 of the 32 teams, it's the taxpayers in the team's host city who paid to build it.

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If the privately owned teams earn the stadium's revenue, why are they built with public money?

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A new NFL stadium is being built nearly every year, and their price tags are reaching into the billions.

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This chart shows all the different home fields NFL teams have played in since 1960.

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Stadiums built in the '70s and '80s have lasted, on average, over 30 years. But now a stadium's lifespan may be less than two decades. Washington's owner started asking for a new stadium back when FedEx Field was only 17 years old.

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Though some stadiums, like the Giants/Jets MetLife Stadium, are built with 100% private financing, public tax dollars have financed the vast majority of NFL stadiums built in the last 20 years.

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That's over 7 billion in public money going towards building and renovating NFL stadiums. NFL owners argue that a new stadium will generate new construction jobs while the venue is being built. All the new spending from ticket sales, hotels, parking, tourism

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would cascade into the community, the wider area, and would create a boom in the local economy. I asked an urban planning economist if stadiums really are a good public investment.

Speaker A

Most of the stadiums we have built in the United States, they do not provide any positive impact—most of them.

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What else could you have done with this money? Let's say they are raising 200 million dollars and there is investing in a stadium.

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Instead of doing that, if they spend that money on roads, infrastructure, shopping malls, or public parks,

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things that benefit the whole public, not just football fans. For team owners, new stadiums mean millions more in profits.

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They sell the name of the stadium to other corporations, host the Super Bowl, and owners maximize revenue by building more and more luxury suites and club seating in place of general admission seats.

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Over a third of the seats are premium in the Cowboys' 82,000-seat stadium, and a luxury suite can cost as much as $30,000 per game.

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The push for new stadiums comes down to increasing profits for the owners, but cities try to meet these demands because there's more to a football franchise than the bottom line.

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Residents want teams and the hometown pride that comes with it. Even for people who never attended a game, there's a shared experience, a collective enthusiasm for the home team.

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In one poll, three-quarters of Indianapolis citizens said losing the city's NFL team would hurt the city, compared to 68% who said it would hurt to lose all the city's museums.

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This is coming from a city and state that funded 86% of their new stadium, even though the previous stadium still owes millions in debt.

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Team owners, they have successfully tied this stadium to civic pride. And that's why when cities refuse to build new stadiums, owners threaten to move their teams to somewhere that will.

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That's what happened in 2016 to St. Louis and 2017 to San Diego and Oakland.

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New stadiums aren't the economic powerhouses owners promise they'll be. But as long as there are more cities that want a home team than there are franchises, it looks like the taxpayers are gonna keep footing the bill.

Speaker A

New stadiums aren't the economic powerhouses owners promise they'll be. But as long as there are more cities that want a home team than there are franchises, it looks like the taxpayers are gonna keep footing the bill.

Topics:NFL stadiumspublic fundingtaxpayer moneysports economicsstadium constructionteam relocationcivic prideluxury suiteseconomic impactVox

Frequently Asked Questions

Why do taxpayers pay for NFL stadiums if teams are privately owned?

Most NFL stadiums are financed with public tax dollars because cities want to keep their teams and believe stadiums will boost local economies and civic pride, despite the teams earning most of the revenue.

Do new NFL stadiums provide significant economic benefits to cities?

Urban economists generally find that most stadiums do not provide positive economic impacts compared to other public investments like infrastructure or parks.

What happens if a city refuses to fund a new stadium?

Team owners may threaten to relocate their franchises to cities willing to build new stadiums, as seen in St. Louis, San Diego, and Oakland.

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