For many a city, mayor, and city council, a sports stadium symbolizes city pride and entertainment: a facet of the modern city landscape, so to speak. They bring in crowds that cheer on the city’s team in a picture-perfect scene of unity.
It’s the coliseum of the modern city—a coliseum routinely under scrutiny for opulent costs, hyped economic benefits and a pitiful environmental record.
The economic record for sports stadiums is as abysmal as it is long. University of Chicago economist Allen Sanderson sums up the appalling economic effects of sports stadiums by saying, “If you want to inject money into the local economy, it would be better to drop it from a helicopter than invest it in a new ballpark.”
Stadium lobbyists cite crowds, new jobs and incentives for new business as positive effects for building a stadium. However, the economics of it rarely make this so. Economically, investing in a stadium is only beneficial if it allows for the best use of workers and funds. The price tag alone makes it unrealistic to reach. The inconsistency of how often stadiums are utilized is another.
Most stadiums sit empty for the majority of the year, which forces management to book other events to fill seats. The Staples Center in Los Angeles is the most effective at doing this, according to Victor Matheson, economist and professor at the College of the Holy Cross. The Staples Center has events booked 250 days out of the year.
One of the most successful sports stadiums is Oriole Park in Baltimore. A third of the crowd at every sports event is from outside the area, thanks to its proximity to the nation’s capital. Despite the influx of outsiders to the park, its revenue is only around $3 million. The investment in the stadium was $300 million, resulting in a measly return.
The income distribution in sports is also an issue. Most revenue goes to paying exorbitant player, coach and executive paychecks. For average stadium workers, part-time and underpaid, their salary is small compared to other entertainment industries.
Another economic negative for cities is the long-term bonds that are used to finance stadiums. Cities end up stuck with the debt for decades. This adversely affects public programs and jobs, which are usually cut in hard times.
Speaking of hard times: what could cities do with all that money if it wasn’t spent on stadiums? The 1990s witnessed cities spend $6.5 billion on stadiums. The following decade saw that number increase to $10.1 billion. And that doesn’t even include lease breaks, property tax exemptions and the use of tax-exempt government bonds that add another 10% to the cities’ tabs.
The environmental effects of sports stadiums create another problem. How do stadiums reduce the monstrous waste they produce every game? And how do stadiums reduce the waste from plastic cups, food, myriad lighting systems and any other state-of-the-art technology that might be used?
For example, Safeco Field in Seattle has an average energy cost of $750,000. The Dallas Cowboys’ stadium consumes as much energy as Santa Monica, California. Some venues see their energy bill hit $3 million. Stadiums can also produce between 179 and 716 tons of carbon per game (the average American family produces 41.5 tons of carbon a year).
Some venues are working on becoming energy efficient, however. The San Francisco Giants have recycled and composted 75% of their trash and installed 590 solar panels at AT&T Park.
The usual environmental side effects of a stadium are increased traffic and noise and air pollution. Increased traffic, in turn, leads those not going to the game to stay home, rather than face horrendous traffic.
The makeup of the area surrounding a stadium depends on the intent of the developers. It may be located in an undeveloped area near a major highway for a large parking lot, in an urban environment with easy access to mass transit or in a commercial area surrounded by hotels to accommodate out-of-town fans.
Since most economists agree that stadiums provide little or no economic upside, the placement of the stadium probably relies more on image. Where will it make the city look the best? And more importantly, “will this stadium make me look good as a public official?”
For nations, like Qatar, it’s an issue of national honor and position. In a region of instability, Qatar is trying to establish itself as a stable and legitimate Arab nation through long-term investments in sports infrastructure. They are planning on spending $200 billion on stadiums, fields and other sports facilities for the 2022 World Cup.
Other World Cup nations, like South Africa and Brazil, have experienced protests due to astronomical costs when many citizens have little or no access to essential services.
Brazil’s World Cup stadiums are notorious for their dilapidated state. One 42,000-seat stadium closed due to a leaky roof, and homeless people were reportedly living in the locker rooms. It cost $215 million to build.
Another stadium is trying to make money by hosting weddings and kids’ parties. A $300 million stadium was built in the jungle city of Manaus, despite its isolated location and lack of a major sports team. A $550 million stadium in Brasilia is being used as a parking lot for buses. Moreover, Brazil spent over $3 billion for its World Cup stadiums.
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