Nothing beats the sights and sounds of a day at the ballpark. How about the smells of barbeque as you navigate your way through the tailgate parking lot into a football game. There is no doubt that people love their sports teams and for a fan there’s no greater experience than to attend their favorite team’s game in person. The stadium is the focal point of that experience. Over the past 100 years not only has the size of the average sports stadium increased, but so has the average price tag for them. Nowadays, construction of these facilities can exceed $1 billion. Levi’s Stadium in the San Jose, CA which opened last fall cost $1.2 billion (Vance). With such high costs, financing becomes an important and complicated factor. The following will examine how cities and sports franchises negotiate the funding for a new venue; Whether or not public funds should be allocated for them; And, more importantly, their potential impact on the community.
For some cities the local stadium is an iconic landmark, such as Wrigley Field in Chicago or Lambeau Field in Green Bay. Even old stadiums that are no longer in use are still revered by fans; Candlestick Park in San Francisco or the old Yankee stadium, which is/was endearingly referred to as “The Stadium” or “The Cathedral of Baseball”. These venues are not only places where tens of thousands of fans congregate to cheer on their team, but a place to spend money on merchandise, drinks and of course the quintessential ballpark hotdog.
These arenas and the teams that play in them generate massive amounts of revenue year after year. The National Football League (NFL) brings in an estimated $9.5 billion of revenue annually (Chemi). Major League Baseball (MLB) brought in $9 billion last year (Brown) and the National Basketball Association (NBA) did $5 billion in 2012 (AP). The million dollar, I should say billion dollar question, is why are communities using public funds to build venues for them to use?
It was not always the case that local governments would chip in so much to build a stadium. According to Siegfried and Zimbalist, up until the mid-19th century stadiums were almost completely funded by private capital. At which point the country was witnessing a boom in leisure spending with baby boomers home from World War II. This resulted in an increased demand for entertainment such as sporting events. Because there were only a limited amount of teams in each pro sports league, cities across America ended up competing for franchises to move their operations locally. For example, Los Angeles and San Francisco each lured the Dodgers and the Giants respectively away from New York in 1958. Additionally, leagues added brand new franchises called expansion teams, such as the Dallas Cowboys in 1960. One incentive offered up by cities was, of course, a shiny new stadium.
Modern day stadiums are truly a sight to see. With gigantic high definition screens that dwarf even the largest movie theater screens. These displays serve to replay the game winning touchdown pass, as well as promote the many corporate sponsors. For those hungry fans, they offer much more than the traditional fare of hotdogs, burgers and pizza. Many stadiums have paired with local restaurants to offer premium food and drink, all at a premium price of course. It’s not uncommon to find full service bars and clubs within the gates, where fans watch the game on TV screens while swilling down $10 beers. These added amenities seemingly are designed to get the patrons to spend more time and money inside the stadium. Which is why in recent years we’ve seen so many new stadiums built or older ones renovated. During the period from 1990 to the early 2000’s there were 95 sports stadiums either built, renovated or in the process of being built. Altogether, the price exceeded $21.7 billion with roughly 66% of that coming from public funds (Siegfried and Zimbalist).
A new stadium can serve to lure a team