Cities keep shelling out taxpayer money for sports stadiums, yet the economics almost never makes sense

In the United States and Canada, taxpayers have contributed approximately $33 billion towards the construction of sports arenas between 1970 and 2020, accounting for around 73% of the total cost. Many sports fans believe that these taxpayer-funded stadiums bring significant economic benefits to the local community. However, research paints a different picture. Two economists argue that the economic benefits promised by sports leagues and franchises are largely overstated and rarely materialize.

The allure of stadiums lies in their ability to generate substantial revenue for their owners. In 2025 alone, the NFL reported $14.5 billion in revenue, while the MLB collected $12.2 billion and the NBA generated nearly $12 billion. With such lucrative figures, it comes as no surprise that these leagues and teams desire larger, more luxurious facilities.

However, the price tags associated with these projects are also staggering. For instance, the Washington Commanders' new stadium is expected to cost $4 billion, while SoFi Stadium in Los Angeles came with a price tag of $6.75 billion, making it the most expensive NFL stadium ever built.

Despite the massive costs, public financing for these stadiums is not uncommon. In fact, taxpayers have contributed roughly $33 billion towards the construction of sports arenas across the United States and Canada since 1970. The standard approach by sports teams and leagues involves offering incentives like job creation, sustained economic growth, improved infrastructure, increased tax revenues, and rising property values. However, economists argue that these purported benefits are largely exaggerated.

Studies have found little to no economic benefits for taxpayers or communities from sports stadiums, including per capita income. Furthermore, research suggests that stadium-related job growth has been negligible. While some scholars have found no effects on business openings, others have concluded that property values near stadiums have increased only after teams left the area.

The supposed tax base expansion and increased tax revenue have also proven to be disappointing, as stadiums have failed to generate larger budgets for policymakers. In the case of Atlanta's Truist Park, for example, tax revenue increased slightly in the year after the Braves relocated, but it had no discernible effect on surrounding counties.

The increase in tax revenues did not even cover the costs of servicing the stadium's public debt or other remaining expenses, resulting in taxpayers losing about $15 million annually.

Critics argue that these new sports stadiums do indeed generate traffic on game days, but the kind of traffic that stimulates economic growth is not what one would expect. Researchers have found potential negative spillover effects on neighboring communities, such as increased congestion, higher pollution, and even increased crime rates.

Despite widespread opposition due to taxpayer costs, Marlins Park in Miami was completed in 2012. The economists' findings may seem counterintuitive, as watching sports in person or on television often showcases full stadiums packed with fans spending money on food, merchandise, and other related expenses. However, the economists explain that these projects do not deliver the promised economic benefits due to two fundamental principles: limited resources and trade-offs.

The people who spend money at stadiums are typically local residents, meaning they are simply reallocating their leisure dollars from one activity to another. Therefore, a family spending $500 at the stadium is not creating $500 in new economic activity; rather, they are choosing to see a football game in person over dining at a restaurant, visiting a museum, or engaging in another form of entertainment.

While the stadium may influence where consumers spend their money, it does not result in a net increase in economic activity within their community.