Sales-tax study shows Braves stadium is giant money pit for Cobb County, just like all other studies

Sports economist J.C. Bradbury does some excellent work that has been featured on this site a bunch of times, so I was bummed to see that I’d missed a new paper he released last week analyzing the impact of the new Atlanta Braves stadium on local sales tax receipts. Fortunately, Craig Calcaterra spotted it and wrote about it in his daily baseball newsletter on Tuesday … and then I missed that too. But! My old Baseball Prospectus colleague Dayn Perry, now of CBS Sports, wrote about Bradbury’s study yesterday, and that I saw. And now I bring it to you, only slightly charred on one side from having sat so long in the oven.

Anyway, sales taxes in Cobb County: Did the Braves moving there from downtown Atlanta make them go up, or what?

The findings indicate a net increase in taxable sales in the county; however, the magnitude is small and not statistically significant. Though an influx of net new spending is evident, approximately one-third of the project’s sales derive from crowding out other local economic activity. In total, added tax collections fall well short of covering the public subsidies that fund the stadium.

Some translations from economese: The first sentence above means that Cobb County collected more sales tax after the stadium opened, but it was such a small bump that it could have been just random chance. The second means the amount that total spending went up in the county was just one-third the amount of money being spent in and around the Braves stadium; so people spending money at Braves games must have cannibalized other spending, “as local consumers reallocated spending from other Cobb merchants to the stadium development.” The third means — okay, you know what it means: The new tax money wasn’t nearly enough to pay off Cobb County’s $392 million in stadium costs.

Or, if you prefer your data in pictures, here’s a nifty chart from Bradbury’s paper:

The line for Cobb County tax revenue goes up after the stadium opened! However, so do the lines for sales tax revenue in other Atlanta-area counties. In fact, the line for the average Atlanta-area county went up even more than Cobb’s, implying that Cobb might have done even better if it hadn’t bothered with building a dumb old stadium.

None of this, as both Calcaterra and Perry note, should be any surprise: There are at this point tons of studies looking at the sales-tax impact of new stadiums and finding that it’s not much. (Plus, studies looking at other economic indicators and finding the same lack of impact: Bradbury himself looked at commercial real estate values in Cobb last year and found that it similarly did worse than neighboring counties without new ballparks.) But the Braves stadium was supposed to be the exception; not just because every stadium claims to be the exception, but because here a team and its fans were being lured away from a neighboring city to previously vacant land being used for a “ballpark village,” which was supposed to, if nothing else, siphon off a bunch of spending from Atlanta and bring it to Cobb. That that didn’t happen — or at least, only happened in small numbers that weren’t nearly enough to pay off the county’s massive stadium debt — should put an end to talk of sports venues as economic engines. It won’t, but it should.

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One comment on “Sales-tax study shows Braves stadium is giant money pit for Cobb County, just like all other studies

  1. Good study and good summary. I do not think I have ever seen how synchronized sales tax revenue is across a region. It makes me wonder if Cobb County’s continued history of below region revenue is the whole reason they went to the build stadium playbook.

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