October 11, 2007

Harvard prof: Public pays 80% of stadium costs

The written testimony from yesterday's Congressional hearing on stadium funding is now online for download from the subcommittee's website. (Scroll down a bit for the links.) I haven't finished reading through it all myself, but among the highlights are revised figures for total sports subsidies in the U.S., courtesy of our old friend Harvard professor Judith Grant Long, who has painstakingly catalogued all hidden subsidies such as tax breaks and sweetheart lease terms:

Starting with cost figures provided by the sports industry, public funding for the 82 new facilities opened between 1990 and 2006 totals approximately $12 billion. This estimate is based on an average facility price tag of $253 million (in 2006 dollars), an average public subsidy of $144 million, translating to an average public share of facility costs measuring 57 percent.

My research ... shows that these figures ar the tip of the proverbial iceberg. I argue that governments pay far more to participate in the development of major league sports facilities than is commonly understood due to the routine omission of public subsidies for land, infrastructure, as well as the ongoing costs of operations, capital improvements, municipal services, and foregone property taxes.

Adjusting for these omissions, my "full count" estimate of total public funding for these same 82 facilities is $18.5 billion - representing a 55 percent increase over industry figures, of $6.5 billion in uncounted costs. These figures are based on an average of $80 million of uncounted costs for each individual facility, increasing the average public subsidy to $225 million, and the average public share of total costs from 57 to 80 percent.

Now that's a whole mess of cupholders.

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