Asks a Wall Street Journal story: “What’s behind all the domed NFL stadiums being built?”
In a nutshell, the answer is utility. It’s the utility of a modern domed facility that allows natural light in through the roof for not only football games – and possible Super Bowl hosting – but also for ancillary events that can be staged year-round, offering guaranteed revenue (TV and otherwise) no longer threatened by inclement weather and those that further fill the coffers of team owners.
Seven new stadiums for NFL teams are under construction, nearly all featuring roofs, The Journal notes. “New stadiums cost $2 billion to $3 billion, with public subsidies averaging 40 percent for recent builds, often excluding hidden costs,” it says.
Will the Pittsburgh Steelers seek to join the “roofed” trend as its lease at Acrisure Stadium is up in a few short years? That’s anybody’s guess. But few should be surprised when, not if, the Steelers seek millions of new public dollars for a stadium upgrade, domed or not.
Private talks are said to have been underway for many months. And they’re being kept private for a reason. Nod-nod, wink-wink, hint-hint. The pols and barons of sport first have to grease the skids to reduce the squeak/squawk volume of pulling our wallets out of our pockets.
But as Andrew Zimbalist, a professor of economics at Smith College in Northampton, Mass., reminds in the same Journal story, taxpayer-funded sports facilities continue to be a bad deal, not just for taxpayers but for the economy as a whole – despite what those bellying up to the public trough steadfastly insist.
Even when cities reduce direct cash contributions, “owners typically ask for something else, like favorable land deals at below-market prices, tax abatements, new highway ramps and infrastructure built at public expense, sanitation and security services,” Zimbalist reminds.
“Sometimes a surrounding mixed-use area is designated as a special tax zone, so that future tax revenues from the development are pledged to pay off the stadium bonds—meaning the city is effectively pre-spending decades of future tax income,” the sports economist notes.
And the numbers that owners and their acolytes put in front of public officials and, in some cases, voters, are almost never comprehensive, Zimbalist tells The Journal. “A stadium that looks like a 50-50 deal may really be a 70-30 deal once you factor in the land and the off-balance-sheet subsidies.”
Of course, then there’s this critical question, as The Journal asks it: “Does any of this actually benefit the city economically? Or just the owner?”
Zimbalist says the research remains “pretty consistent”:
“Stadiums don’t generate meaningful economic development. When a family spends $300 at a game, that’s $300 they don’t spend at a local restaurant or bowling alley; there’s no new economic activity, just what we economists call ‘substitution.’
“Much of the money spent inside the stadium flows to owners and players whose primary residences are elsewhere and who save at high rates, and thereby leaks out of the city’s economy,” Zimbalist says.
“And if the city’s bond debt service exceeds the revenue the stadium generates, you have a continuing fiscal hole that forces cuts to services, or tax increases,” he cautions.
Zimbalist says he personally would rather see a city invest equivalent public dollars in a museum or a concert hall—institutions that strike him as “more genuinely culturally enriching.”
“But I go to games, and I see what they generate: a shared experience, a common identity, a sense of community in a country that has fewer and fewer of those things.
“Whatever these domed stadiums are, they’re not nothing. The question is whether they’re worth what we’re paying for them,” he concludes.
The economic impact data say they are not. And as for the so-called “intangibles” that Zimbalist and others point to such facilities generating, the only money that John and Jane Q. Taxpayer should have invested in that “shared experience” is in the price of admission through the ducats they voluntarily purchase – and most certainly not from having their pockets involuntarily turned out yet again by the National Football League.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
