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Surprise! Stadiums Don't Pay, After All
By Doug Bandow
Sunday, October 19, 2003; Page B01

We're all expected to love baseball -- it's America's sport, after all -- but I know a few taxpayers in the greater Washington area, maybe even a few thousand, who don't. You know, people who weren't -- horrors! -- glued to their TV sets, rooting for the luckless Red Sox or the jinxed Cubs to finally make it back to the World Series. People who haven't spent every waking moment since 1971, when the Senators left, plotting to lure a team to town. People who don't think the city's image and its future depend on spending millions of taxpayer dollars on a state-of-the-art stadium for a transitory collection of athletes, artificially assembled through league drafts, franchise trades and high salaries. ...

...That is, how much is ultimately generated by a dollar spent on sports? Official figures tend to assume, unrealistically, that all of the money, including, for instance, players' salaries, is spent locally.

Even more important, though, is that sports spending primarily substitutes for other outlays. Stanford's Noll figures that the vast majority of those attending games -- more than 90 percent -- are local residents. They are merely diverting their spending from other leisure activities. Money might shift a bit within a region -- from suburbs to city, or from outer to inner suburbs. But, as economists have consistently found, the amount of new economic growth is minimal. Economists Robert Baade of Lake Forest College and Allen Sanderson of the University of Chicago have looked at 10 metropolitan areas that brought in sports teams, and found no net employment increase, as spending was simply realigned. And there was no evident difference in economic performance between cities with or without teams during the 1994 baseball strike, says the University of Akron's John Zipp.

So if the goal is trickle-down consumer spending and business development, why not build a new automobile factory, retail outlet, grocery store or software facility to attract and maintain companies, jobs and economic growth? Forget a sports team for D.C. Just erect a string of buildings for restaurants. That should draw suburban residents, and their money, here.

But neither sports boosters nor their political allies are much interested in overall economic impact. Fans want a team, potential franchise owners desire subsidies, and elected officials expect political gain -- and the opportunity to snag an invitation to the owner's box. Government stadiums benefit economic and political elites, not the public.

Yes, refusing to play the subsidy game might mean losing a franchise. But if the only way to prevent a team from moving or to get one to come to your town is to shovel corporate welfare into a billionaire's hands, trust the research -- it isn't worth it.