There’s No Good Reason for Cities and States To Build or Subsidize Sports Stadiums
Hello and welcome to another edition of Free Agent! Don’t forget to eat those July 4 leftovers, it’s probably the last good day for them.
I’m away on vacation, but I’ve got a great interview for you to read about sports and local politics colliding over stadium subsidies. But don’t sleep on the links this week, there was a ton of news about the federal government intersecting with the sports world.
Locker Room Links
- Public service announcement: In spite of one real email inquiry, Free Agent is a newsletter and does not offer private baseball lessons. But if you want to send $200 in exchange for me telling your child to choke up on the bat, you may do so.
- The GOP’s “Big Beautiful Bill” is terrible for professional, and casual, gamblers.
- The bill also spends a lot of taxpayer money on the 2026 World Cup and the 2028 Olympics.
- Mexican boxer Julio Cesar Chavez Jr. was arrested by Immigration and Customs Enforcement days after fighting Jake Paul.
- Speaking of fights, President Trump wants to host a UFC fight at the White House with tens of thousands of attendees.
- MLS allegedly suspended three Chicago Fire fans (the soccer team, not the TV show) for a year for their “FIRE FANS CONTRA ICE” banner (the government agency, not the frozen water).
- The Supreme Court will decide if states can ban transgender athletes from women’s sports teams.
- Speaking of which, elsewhere at Reason: “It was the NCAA’s policy that was unfair to female competitors,” writes Reason‘s Billy Binion. “It was unfair to [Lia] Thomas, who became a national villain for participating and a symbol of institutional rot in collegiate athletics. And it set the stage for the Trump administration to make a very, very easy layup.”
- Lionel Messi, your job is safe for now:
The Stadium Scam
Sports teams and their stadiums are big businesses that are huge drivers of economic growth, and should be lured from city to city by generous subsidies and incentives that will be well worth it for governments and taxpayers, right?
Wrong! Many thanks to J.C. Bradbury, a professor of economics at Kennesaw State University in Georgia, for taking the time to speak with me.
Q: My first question is a devil’s advocate case for stadium subsidies. People see sporting venues go up, they sometimes see development around the stadium. They see people pouring into these stadiums however many times a year there’s a home game or concert. How can you say this is not a slam dunk for economic development?
A: That’s what we teach in early introductory economics classes as underpinning the difference between the seen and the unseen. We often see people spending their money in and around stadiums, and we say, “Oh, this must be net new economic activity.” But what we don’t see is that most of the people who are spending that money were [already] going to spend it elsewhere in the community. We don’t see fewer tables being served at restaurants, fewer lanes being rented at bowling alleys, people buying things in retail outlets.
Most spending is reallocated local spending, so it’s not a net new economic benefit to the community. We’ve been studying this for 50 years, and no one can find any increase in economic activity following the opening of a new sports venue.
Q: I think I’ve heard that the typical arena is getting all of its people to come at once for a big event. But if you were to spread out the total spending or total attendance over a day, or a year, the numbers aren’t all that impressive.
A: A venue that I’ve studied very carefully, The Battery Atlanta [adjacent to the Atlanta Braves’ ballpark] right near where I am in Cobb County, I’ve estimated that the spending that happens there is equivalent to about a Target store. That’s what you’re looking at. And by the way, Cobb County has seven Target stores, including one that’s about a mile away from the stadium.
Q: So you’re saying there’s no increased spending in a metro area. One argument people might find appealing is sometimes these metro areas are near state lines, and cities or states might draw a venue into their jurisdiction. We saw this when Virginia tried to steal away the Capitals and the Wizards from Washington, D.C. I guess the argument is the new host city would suddenly get tax dollars they were not getting.
A: Going back to the
Article from Reason.com
The Reason Magazine website is a go-to destination for libertarians seeking cogent analysis, investigative reporting, and thought-provoking commentary. Championing the principles of individual freedom, limited government, and free markets, the site offers a diverse range of articles, videos, and podcasts that challenge conventional wisdom and advocate for libertarian solutions. Whether you’re interested in politics, culture, or technology, Reason provides a unique lens that prioritizes liberty and rational discourse. It’s an essential resource for those who value critical thinking and nuanced debate in the pursuit of a freer society.
