Sports Stadiums Becoming Major Corporate Welfare
Read the author's major article on this subject.
And here is an excerpt of a review of his book:
taxpayers as well as sports fans will continue to pay through the
nose for pro sports until they decide to outlaw the monopoly status
of professional sports leagues, says Stanford economist Roger Noll in
a new book.
Noll and fellow sports fan and economist Andrew Zimbalist of Smith College argue against sports monopolies in a new book they edited, "Sports, Jobs and Taxes," for the Brookings Institution. The National Football League, for example, is a cartel of team owners that is able to extract monopoly prices in the form of public subsidies because they have no competition. "The NFL will always see to it that there are a few cities who are hungry for a team but don't have one," Noll says. "Their business plan is to keep the wolves at the door, so a team can make a case for more subsidy every time a lease expires."
In New York, where the Yankees want at least $800 million from the city for a new stadium in Manhattan, it would be cheaper if the city fathers simply gave the Yankees a cash bribe of $10 million a year, Noll says.
In nearly all cases, Noll says, federal taxpayers are also being hit hard. They provide about 30 percent of the local subsidy in the form of tax-free bonds that the cities sell to build the facilities. The 1986 Tax Reform Act encourages cities to subsidize stadiums, because they can only sell tax-exempt bonds if the revenues from the stadium account for less than 10 percent of their debt service.
The book is required reading for any citizens group hoping to fight plans for a new taxpayer-subsidized football or baseball stadium or hockey or basketball arena in their area. It provides the nitty-gritty details of the many flaws in economic analyses that are prepared by consultants for stadium proponents. Such studies usually conclude that a team and a new stadium will improve the local economy, reduce poverty and increase jobs.
"We are just pointing out two important facts," Noll says. "Stadiums are not a net local economic benefit, and the reasons cities are paying for them is because the (federal) government made the professional leagues monopolies" -- exempt from anti-trust laws that apply to most other industries.