How are we funding professional sports stadiums? An overview

Abstract

Purpose American taxpayers heavily subsidize professional sports leagues and teams through direct and indirect public funding to build professional sports stadiums. Today, the proportion of public funding to build professional sports stadiums is greater than private contribution. In last 20 years, almost all of the 100 professional stadiums opened have received some form of direct or indirect financial assistance from local, state and federal government. The paper aims to discuss these issues. Design/methodology/approach This paper investigates and documents most often used methods of stadium financing in recent years along with the historical shift from privately built stadiums to public funded stadiums in the span of 65 years. This paper also briefly reviews the literature evaluating the impacts of public spending for professional sports stadiums. The vast literature on the topic reveals that economists and city planners agree that public subsidy to build expensive professional sports stadiums cannot be justified on the grounds of perceived economic development. Findings Over the years, funding mix to build professional sports facilities has changed dramatically. Local government has been coming up with various financing strategies involving new and old instruments. Originality/value The findings also suggest that share of local and state government has gone up in recent years compare to federal government share.