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Originally Posted by Public Money for Private Stadiums?
On Wednesday, Minnesota United was officially announced as an expansion side into Major League Soccer. The franchise looks to build a 20,000 seat stadium from scratch; however, the Minnesota Governor stated that Minnesota United and Major League Soccer will not be receiving public money for their private stadium [1]. Minnesota Democrats and Republicans came out in support of the governor’s decision. Ironically, a stadium under construction for the Minnesota Vikings of the NFL is receiving $498 million dollars of taxpayer money [2]. This seems to be the norm in the current sports atmosphere in the United States, as the St. Louis proposed a new stadium that would be financed by $400 million of public money and Wisconsin is planning to give $220 million of public bonds to the Milwaukee Bucks [3]. Why does this happen? The simple justification would be that stadiums provide an economic boom to a region by hosting events throughout the year. Proponents state that stadiums provide some construction jobs, some permeant jobs, and give local businesses a boost in visibility. However, this does not seem to frequently be the case. Robert Baade performed a statistical test to see if a new stadium or sports team was a boon to the local economy, and in many cases, there was no statistical economic difference before and after the stadium was built or the team was formed [4]. It turns out that many fans spend money at or around the stadium that would elsewhere be spent in or around the city.
If that is the case, then why do we still subsidize these stadiums? Perhaps one reason is that the taxpayers value their sports teams. Americans spend a considerable amount of time on Sundays watching the NFL and rooting on their team, and the last thing many of them would want is for their team to be gone. However, this is exactly the case in Saint Louis, where the Rams are threatening to move to Los Angeles unless the city increases public funding to a new stadium. Many other underserved markets, such as Buffalo, Jacksonville, and Oakland, have threatened to move to other cities, placing the ball in the taxpayer’s court. The last thing many Saint Louis Rams fans want is to lose their team, so if that means increased public funding for a new stadium, that is one unfortunate sacrifice that one would make.
The franchise system is a major player for the usage of public funding in the US. Instead of clubs with local roots and history, franchises move around to more desirable locations relatively consistantly. Some examples include the Seattle Supersonics (NBA) moving to Oklahoma City, the original MLS San Jose Earthquakes moving to Houston, the Atlanta Thrashers moving to Winnipeg, and the old LA Rams of the NFL moving to Saint Louis. As seen, this is frequently the case in the North American sports landscape; however, it is not so much the case in Europe. One notable example is when Wimbledon FC moved roughly sixty miles to Milton Keynes in 2003. However, that was a lengthy process and it is believed that the FA would not allow another team to move a significant distance from its current home. For example, when Arsenal left Highbury, their new stadium, Ashburton Grove, was adjacent to its old. Similarly, Tottenham are currently constructing a larger stadium to replace White Hart Lane, and again, it is on an adjacent land parcel. Another similarity that both of these stadiums have is that no public money was used in building them, and that these stadiums were valued at 400 million pounds. Why is public financing so common in the US for stadiums, but not in England? There are no doubt different political climates; however, another reason also rises especially after the MK Dons fiasco. It does not seem feasible that teams will be able to significantly relocate, which means that they cannot credibly threaten to relocate, meaning that the cities do not have any real incentive to fund a new stadium. In the US, a franchise can move after a certain number of league owners approve it, however, the FA does not appear as if they will let any clubs relocate, which ends up saving the tax payers a significant amount of money.
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