Saturday September 1, 2001
Public Funded Arenas & Stadiums
Gross Overestimate of Economic Benefits,
Underestimated Economic Costs
Jack W. Calhoun, Executive Editor,
South-Western College Publishing

    CINCINNATI, OH - Howard Hobbs, Ph.D. discusses some of the legal and economic arguments against public subsidies for sports stadiums in a series of widely read research studies and articles he has published since 1996. He notes that most states prohibit the use of state funds to aid a private enterprise, yet municipal financing of sports stadiums has been expanding rapidly.
     In this expanded analysis found in the November 29, 1997 Daily Republican article, Hobbs provides a nice summary of the arguments for and against public subsidies for professional sports stadiums.
     He argues, though, that the evidence suggests that the proponents tend to exaggerate the benefits from such projects. Hobbs writes that while spending on such sports stadiums provides jobs for construction workers, it withdraws resources from other alternative investment projects that would also have provided construction jobs.
     Since the rate of return to investment in sports stadiums appears to be lower than in other industries, he suggests that society would be better off if fewer new stadiums were built.
     Hobbs suggests that antitrust actions should be used to break up sports leagues into smaller competing business entities. He argues that this would reduce the monopoly power that allows existing sports leagues and teams to pressure cities to provide heavily subsidized new stadiums.

    [Editor's Note: South-Western College provides innovative policy forums on the topic of whether or not public investment in sports stadiums pay off. For related in depth issues and background click on South-Western College. Also see another very convincing explanation of where public financing of sports activities is headed.]