Taxpayers pay 70% of NFL stadium costs, owners pocket 95% of the revenue

Gregg Easterbrook summarizes the research on who pays for and benefits from the construction of new NFL stadiums:

Judith Grant Long, an urban planning professor at Harvard, has shown that about 70 percent of the cost of building and operating NFL stadia has been paid by taxpayers — many not even sports fans. About 95 percent of the revenue the stadia generate is kept by team owners. It’s a deeply disturbing arrangement. Andrew Zimbalist, an economist at Smith College, has shown that NFL investments never generate the promised job totals or local economic activity. If there’s public money to spend in Buffalo, investments in infrastructure — schools, transportation, a replacement for the dilapidated Peace Bridge, improving Delaware Park — would have more of an economic multiplier effect than an NFL field.

This said, if there is one city where public investment in an NFL stadium might be justified, it’s Buffalo. Should Atlanta or Miami lose its NFL team, that would be a shame, but these cities would still have strong economies. Should Buffalo lose the Bills, this could be perceived as the “last one turns out the lights” moment, reducing the odds of a Buffalo urban recovery.

Public investment in an NFL stadium might be justified only if the facility is located downtown. The Buffalo News reports that 15 sites are under consideration for a new stadium. Two are in Toronto. Several are suburban, including an abandoned shopping mall property an hour’s drive from the city. One is near Niagara Falls, where the tourist activity is on the Canadian side, not the American side. One is on the Buffalo Outer Harbor, which is cut off from downtown by a freeway and doesn’t contribute to the pulse of urban life. Only downtown locations should be considered if public funds are spent.

Nobody would have believed 20 years ago that Pittsburgh and Cleveland could bounce back and have trendy downtowns. And nobody believes that about Buffalo now. But already underway on the north side of the city is a complex of a teaching hospital and medical research center that will be among the world’s largest and best equipped. Thousands of professionals will move to the city to staff the center. Add the NFL to downtown, and Buffalo might acquire the cachet it needs to rebound.

In other words, the research from recent years is consistent: building a publicly-funded stadium is not really a good deal for taxpayers. Major league teams will appreciate it and the owners certainly benefit but the money does not flow back to taxpayers. Yet, since the political calculus is such that no major leader wants to be the one that let the favorite team get away plus there are still sites that existing teams can threaten to move to (in the NFL, Los Angeles is perhaps more important as a potential city rather than an actual home for a team), taxpayers are likely to continue to help foot the bills for new stadiums.

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