Why the federal government should stop spending billions on private sports stadiums

[Algernon Moncrieff]

Brookings

When the New York Yankees completed the new Yankee Stadium in 2009, the final construction bill was an estimated $2.5 billion. Of that, nearly $1.7 billion was financed by tax-exempt municipal bonds issued by the city of New York.

Because the interest earned on the municipal bonds is exempt from federal taxes, a large amount of tax revenue that would have been collected—had the bonds been issued as taxable—went toward the construction of the stadium. In other words, the Yankees received a federal subsidy to build their stadium. How much? About $431 million. That’s a lot of money, but it gets worse.

The loss in federal tax revenues was even higher than the subsidy to the stadium. High-income taxpayers holding the bonds receive a windfall tax break, resulting in an even greater loss of revenue to the federal government. In the case of Yankee Stadium, the additional loss was $61 million. That is, the federal government subsidized the construction of Yankee Stadium to the tune of $431 million federal taxpayer dollars, and high-income bond holders received an additional $61 million.†

The Yankees, of course, aren’t the only team to finance their stadium using tax-exempt municipal bonds. Since 2000, 35 other professional sports stadiums have also been financed with tax-exempt bonds.

[dameatball]

1. I agree completely. Welfare for the wealthy.

I watched the DeVoss family hold up the city of Orlando and surrounding counties twice for arenas they could afford to build themselves. I can't speak to the tax question. But I can tell you most of the people who were displaced to build these monstrosities were POC and poor.

[Algernon Moncrieff]

3. Do we help build movie theaters?

In general terms, if you can afford a football team, you can build a stadium.

If government wants to get into subsidies, have them go into the poorest urban and rural areas, and foot the bill for a major name grocery store ( with in house pharmacy) to open shop. Have government subsidise some urgent care medical and dental clinics in areas with no doctors or dentists.

[Hoyt]

2. Probably right if one assumes it would have been built without tax breaks.

On other hand, if it would have been put off for years without breaks, it might have been a worthy stimulus at time.

Of course, I can think of better things to spend it on for good of society. But they aren’t very popular with those who put big deals together.

[johnnyrocket]

4. The public thievery by these moneyed class is blatant and grotesque.

They are shaking down public officials to freeload from the state to the tune of billions.

[jmowreader]

5. I wonder...

Who receives a bigger tax break:

1) Sports stadiums, which create jobs, draw business and industry to an area, make people happy and are a source of civic pride

or

2) Fundamentalist churches, who would strip you of your civil rights in a New York minute if those rights conflicted with their interpretation of the King James Bible

Incidentally, you do realize Yankee Stadium, which gets used probably 100 times a year, cost about what 25 F-35 fighters do? And the F-35, if all goes well and we quit electing Republicans, may NEVER be used for its intended purpose.

[Scruffy1]

6. I have never seen one economic study that shows any economic benefit from sports stadiums.

There might be one somewhere, but I've read a lot of them and not seen it. They always claim these whe the billionaires come asking for a handout.

[Algernon Moncrieff]

7. Since we don't do multi purpose stadiums anymore, the benefit is vastly overstated

Think about the old Memorial Stadium in Baltimore. A now defunct multi-purpose venue.

It hosted the Orioles
It hosted the Colts, then a USFL team, then a CFL team briefly.

So year round - 88 dates? Maybe some more if a team made the playoffs.

Contrast: An NFL Only stadium. I think the NFL stadium Washington plays in gets used for like 10 dates per year. Occasionally, they do a neutral site football game there.