Stadium Subsidy - Benefits

Benefits

In granting stadium subsidies, governments claim that the new or improved stadiums will bring positive benefits to the city. The first way this is accomplished is through the creation of jobs. New stadiums usually require more employees than the old facility. Nearby the stadiums, jobs are also created in local shops, restaurants, hotels, and in the transportation industry.

On this note, it is argued that stadiums help create new small businesses in the vicinity of the stadiums, which increases property values and, with that, the tax base of the cities. The increased tax base allows the cities to pay off the stadium subsidies.

Cities also grant stadium subsidies because they believe that new stadiums can be used as a marketing tool. New stadiums can help revitalize downtrodden neighborhoods or city centers, attracting tourism and business investment. These factors lead to economic growth in the city and, because of increased spending on tourism activities like food and lodging, the positive externality of increased aggregate income.

Finally, another positive externality caused by stadium subsidies is the increase in civic pride that can result from bringing a professional sports team into a city. For cities that already have a team, a stadium subsidy can help avoid the drop in civic pride that would result if the team were to leave. It is thought that the presence of a sports team helps bring people in a city together and can also help increase productivity. While it is not the new stadium but the team that drives the civic pride, it is often the prospect of a stadium subsidy that entices the team to either come to a city or, if they are already located in the city, to remain there.

However, there is no compelling evidence that stadiums actually produce these benefits.