Report: Economists, team owners disagree on whether stadium subsidies are a good thing

Hey, it’s another “longform” article mulling over stadium subsidies! This time it’s in the Atlantic, headlined, “Is There a Better Way to Build a Stadium?” An excellent question, albeit one that raises suspicions of Betteridge’s Law being at work here, but let’s see what author Alana Semuels has to say:

It has become widely accepted that publicly-financed sports stadiums are a bad deal for cities.

Well, yeah. The only example given here is the St. Louis Rams deal, which was indeed bad but is by no means definitive, but subsidies are long and online attention spans are short, so let’s move on to the nut graf:

What’s different in the case of Milwaukee? Either a whole lot, or nothing, depending on who you ask.

Oh, lord, this isn’t going to be a he-said-she-said “there are opinions on both sides” article, is it?

Next up is a quote from Wisconsin Gov. Scott Walker on the Bucks deal (“we think this is a good, solid move as a good steward of the taxpayers’ money here in Wisconsin”), then a counter from economist Victor Matheson (“There is a fairly big deal of hypocrisy going on particularly in Milwaukee Bucks case”), plus a cite of studies showing bad returns on public spending on stadiums and arenas. Then a confusing discussion of tax-exempt bonds (“Public financing for stadiums came about as Congress tried to limit deals that allowed private entities to profit from tax-exempt bonds,” wait, what?), then “it’s possible that the Bucks, and other teams, have learned something from the public antipathy towards public financing of arenas.” Learned how?

The team isn’t just using public funds to build an arena for itself; it is also pledging to build a seven-story parking structure alongside the arena with mixed-use retail on the ground floor and an apartment complex on the eastern side. It has hired a design team for a block of entertainment, retail, and commercial spaces, and hopes to begin building that area next year, according to spokesman Jake Suski. The team is also the master developer for the entire 27-acre development, which may someday include bars, restaurants, a public plaza, and eventually office space, multifamily housing, and a hotel.

Yeah, that’s not new at all — team owners have been building ancillary development next to sports venues for so long that I’ve already come up with and abandoned a nickname for them. (“Kitchen-sink plans,” because they throw in everything but — you can see why I abandoned it.) Then there’s lots of back and forth about whether this can work out well (conclusion: maybe), and finally a Milwaukee law professor saying, “I remain a skeptic.” And FIN.

This isn’t even an example of Betteridge’s Law so much as an example of an article that sets out to answer a question, then throws up its hands halfway through, because hell, people disagree on the answer. Admittedly, one side is the people who stand to reap a fortune in subsidies — more than $500 million, a figure that is not even hinted at in the Atlantic article, which apparently either doesn’t consider tax breaks to be subsidies or just takes Walker’s word on how much the subsidies are worth — and the other is just about every economist and independent investigator on earth, but hey, who are we as journalists to say who’s right? One thing’s for certain: No one knows.


8 comments on “Report: Economists, team owners disagree on whether stadium subsidies are a good thing

  1. so the justification for handing out the Milwaukee subsidy is that they aren’t just financing a stadium with the public money but other private development that in any other context would not receive subsidies? Now that is deserving of the gold medal for mental contortions!

  2. Did you include a link to the Atlantic article? I don’t see it. I did enjoy the link to the Wikipedia page for Betteridge’s law. I had never heard of that “law” before. It’s clever.

  3. Atlantic link in there now, sorry about that:

    http://www.theatlantic.com/business/archive/2016/06/a-better-kind-of-stadium-deal/486596/

  4. The Atlantic has absolutely fallen off a cliff in the last 10-15 years. It used to be a source of good information…it is really a shame.

  5. The problem with the Atlantic urban commentary is that their general viewpoint on urban life is that if a city has a brewpub, a couple music venues, and a coffee shop, the city is “doing well.” Everything centers on whether 21-30 year olds are having a good time–to the near complete exclusion of employment, education, transportation, and other priorities of note to the broader population. So a project that gives away even more money to developers is “cool” and the arena is just a bonus.

    Other than James Fallows, I don’t think the staff has a clue on urban development.

    • Coffee shop? Or you mean, coffee shops, as in 2 Starbucks 2 blocks away from each other? I believe The Atlantic thinks hipsters dictate how modern economies are run.

      • Didn’t you know that it is the “creative class” that drives the whole economy? Who needs goods or food when you can have more people selling knick knacks to each other.

        Their whole theory about how urban economies work is literally backwards.

  6. These articles never ask if the economic growth created by a stadium would be any less if the billionaire owners paid for the stadium out of their own pockets? Second question, in the case of Wisconsin, which provides the greatest economic return for $250 million tax dollars: giving it to a billionaire team owner or investing it in the state university system (rather than cutting state support).

    I don’t agree with the Koch brothers often, but when I do, it’s about subsidizing sports stadiums.

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