Stadium subsidy

A stadium subsidy is a type of government subsidy given to professional sports franchises to help finance the construction or renovation of sports venues. Stadium subsidies can come in the form of tax-free municipal bonds, cash payments, infrastructure improvements and operating cost subsidies. Funding for stadium subsidies can come from all levels of government and remains controversial among legislators and citizens.

Eighty years ago, stadium subsidies were essentially unheard of, with funding for professional sports stadiums coming from private sources. Over time this situation changed, and today most new or renovated professional sports stadiums are financed at least partly through stadium subsidies. This change has been caused by the increase in bargaining power of professional sports teams at the expense of their host cities. As the years have passed, municipalities have come to love their local professional sports teams. Citizens feel a special bond with their teams and share in a sense of civic pride when they are successful.

The Los Angeles Coliseum became the first fully publicly funded stadium in 1923, but such stadiums did not become the norm until the 1950s. Twenty-seven of the 30 stadiums built between 1953 and 1970 received more than $450 million in total public funding for construction. During this period, publicly funding a stadium grew in popularity as an effective incentive to attract professional sports teams to up and coming cities. Famous examples include the Brooklyn Dodgers leaving New York in exchange for 300 acres in Chavez Ravine and the New York Giants moving to San Francisco for what would eventually become Candlestick Park.

Sports teams have realized their ability to relocate at lower and lower costs. Because local governments feel that keeping their sports teams around is critical to the success of their cities, they comply and grant the stadium subsidies. This process is what has led to the large number of stadiums financed through subsidies that we have today.

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