Public Policy Toward Professional Sports Stadiums: A Review

Abstract

This article informs public policy toward professional sports stadiums, which state and local governments routinely subsidize. Our analysis provides a history of stadium construction and funding in the US, documenting trends that portend a forthcoming new wave of stadiums. Despite robust contrary evidence that stadiums are not economic development catalysts and confer limited social benefits, public outlays persist and exhibit a positive growth trajectory, which could prove costly to government budgets in coming decades. We review contemporary justifications for public subsidies, focusing on proposed salutary development and budgeting strategies. Economic research continues to demonstrate that stadiums remain poor public investments, and optimal public funding of professional sports venues is substantially less than typical subsidy levels. We examine economic, political, and institutional factors that contribute to the disconnect between research and policy, and we provide recommendations to promote sound public policy.

Keywords: Sports subsidies, stadiums, arenas, professional sports teams, economic development

JEL Classification: R58, H71, L83, Z28