Research on Stadium Subsidies

Economists and other academics have extensively studied public subsidies for sports stadiums.  These researchers have reached a universal conclusion: arenas are poor public investments and bad public policy.

 

An excellent summary of the research and the reasons why stadiums and arenas are poor public investment can be found here.  

 

Here are some of the key findings: 

• Research consistently demonstrates that professional sports stadiums generate little to no tangible economic impacts in host communities.

• Investments in new stadiums are frequently supported by flawed economic analysis that fan spending at stadiums represents incremental economic activity. In reality, most fan spending derives from existing area residents who reallocate their spending from other local leisure consumption options.

• Stadiums tend to be placed in areas that are either already economically strong or primed for development (such as Potomac Yard). Studies using modern empirical techniques designed for eliciting causal inference do not find evidence of significant development effects near venues in these areas.  

• Though complementary establishments like restaurants and bars may benefit from being located near stadiums, congestion, and related nuisances disrupt most other businesses and deter them from opening or remaining open near stadiums.

  •  For example, it is difficult for grocery stores, retail outlets, and commercial offices to operate around game-day traffic

• Stadiums do not increase local property values

• Stadium advocates and local politicians routinely dismiss research findings that stadium subsidies are poor public investments as inapplicable to their specific project (this time is different). It is never different.

• Some localities have used more complicated funding mechanisms than direct subsidies to reduce costs to taxpayers. These funding plans do not reduce taxpayer costs but do make the costs less transparent.

 

The proposed Potomac Yard arena will suffer from all these problems. It will drive congestion, hurt local businesses, and not spur economic development. It will enrich Ted Leonsis at the expense of Virginia taxpayers. The Billionaire does not need a billion-dollar public subsidy.  Contact your  local representatives and tell them that you are opposed to the arena at Potomac Yard.