Why taxpayer-funded sports stadiums don’t pay off

FastCompany: Americans are crazy about sports. But whether that passion requires taxpayers to subsidize new facilities every time leagues and franchises ask for them needs rigorous scrutiny. A lot of money is at stake. For 2025, the NFL reported some $14.5 billion in revenue, while the MLB collected an estimated $12.2 billion and the NBA earned almost $12 billion . Given these numbers, it’s no surprise that leagues and franchises have sought to build bigger, fancier facilities. But such projects come with hefty price tags.

The stadium planned to house the Washington Commanders, for example, is expected to cost $4 billion , while SoFi Stadium in Los Angeles cost $6.75 billion , making it the most expensive NFL stadium in history when it was completed in 2020. At the same time, it’s rare that the leagues or franchises that rake in their teams’ winnings cover the entire construction cost of new facilities. In fact, most new sports stadiums receive funding from state or local governments—meaning taxpayers often foot much of the bill. From 1970 to 2020, taxpayers across the U.S.

and Canada paid some $33 billion toward the construction of sports arenas, roughly 73% of the total cost. The standard approach by leagues and franchises is to offer state and local officials both carrots and sticks. Policymakers and the public are promised jobs , sustained economic growth, improved infrastructure, increased tax revenues, and rising property values. Should public funds fail to materialize, franchises often threaten to move —presumably taking the touted economic benefits with them. As economists , we have to play both sides of the field when it comes to analyzing public policy.

As sports fans and taxpayers, however, we have a vested interest in understanding the economics of using public funds for private sports stadiums. And we believe the promised benefits are vastly overblown. About 75% of Americans watch live sports, whether in person or on TV or devices, with some fans spending 10 or more hours a week. Without a doubt, sports are an important part of American culture and history . This passion for sports, however, can cloud a fan’s understanding of the basic data. We’ll address the most common claims one by one. Show me the money Proponents of these public financing deals promise broader economic benefits .

But history shows that the public almost never recoups the initial subsidy. In an analysis of the economic impacts of sports stadiums over four decades, through the early 2020s, researchers found little to no economic benefits for taxpayers or communities, including per capita income. Other research has concluded that effects on job growth have similarly been negligible. Study after study tells the same story: The promised boom never seems to materialize. Stadiums have had no systematic impact on new business openings. And when it comes to property values, evidence is mixed at best.

Some scholars have found no effects at all , while others have concluded that property values around stadiums increased— but only after teams left . Time after time, any benefits resulting from these projects were consistently overshadowed by the massive costs to the public. Where tax dollars go Another often-made argument by leagues and franchises is that new stadiums will yield a larger tax base and increased tax revenue . But the record shows that new venues have failed to leave policymakers bigger budgets to work with.

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The article addresses a significant issue regarding the financial implications of taxpayer-funded sports stadiums, which is relevant to brand strategy professionals, particularly in the sports industry, but the topic itself has been discussed previously.