Saturday September 1, 2001
Public Funded Arenas & Stadiums
Gross Overestimate of Economic Benefits,
Underestimated Economic Costs
Jack W. Calhoun, Executive Editor,
South-Western College Publishing
CINCINNATI, OH - Howard
Hobbs, Ph.D. discusses some of the legal and economic arguments
against public subsidies for sports stadiums in a series of widely
read research studies and articles he has published since 1996.
He notes that most states prohibit the use of state funds to aid
a private enterprise, yet municipal financing of sports stadiums
has been expanding rapidly.
In this expanded analysis found in the
November 29, 1997 Daily
Republican article, Hobbs provides a nice summary of the arguments
for and against public subsidies for professional sports stadiums.
He argues, though, that the evidence
suggests that the proponents tend to exaggerate the benefits from
such projects. Hobbs writes that while spending on such sports
stadiums provides jobs for construction workers, it withdraws
resources from other alternative investment projects that would
also have provided construction jobs.
Since the rate of return to investment
in sports stadiums appears to be lower than in other industries,
he suggests that society would be better off if fewer new stadiums
Hobbs suggests that antitrust actions
should be used to break up sports leagues into smaller competing
business entities. He argues that this would reduce the monopoly
power that allows existing sports leagues and teams to pressure
cities to provide heavily subsidized new stadiums.
[Editor's Note: South-Western
College provides innovative policy forums on the topic of
whether or not public investment in sports stadiums pay off. For
related in depth issues and background click on South-Western
College. Also see another very convincing explanation of where
public financing of sports activities is headed.]