According to multiple reports, the Texas Rangers and the City of Arlington will soon unveil plans for a new ballpark. This is happening despite the fact that Globe Life Park has been in use since just 1994. The desire for a retractable roof to provide respite from the Texas summer, though, drives the new project.
As the Fort Worth Star-Telegram notes, the project is expected to cost around $900 million. Here's a look at what almost a billion bucks will get you these days ...
Sure, seems nice enough. Also according to the Star-Telegram, taxpayers will be asked via referendum to pay for roughly half of that total cost ($450 million or so). If recent local history is any guide, then the measure will be approved. Or, as Miami taught us, a team can still raid the public coffers without subjecting itself to inconveniences of direct democracy.
The larger point is that these financing deals don't make sense for the taxpayer. A lot of local governments are faced with crippling debt these days, but even those in a relatively healthy state shouldn't be indulging in this kind of corporate welfare. By now, though, the routine is familiar: Team officials and their public-sector valets will trot out tales of the economic development that will ensue once these public-private partnerships are up and running.
The problem is that the evidence says otherwise. This is especially the case for NFL stadiums, which are used at most 12 times a year for their primary purpose. Even MLB facilities, with their 81 or so home games per year, don't move the needle. Here's a passage from Roger Noll's and Andrew Zimbalist's seminal examination of the issue:
As noted, a stadium can spur economic growth if sports is a significant export industry--that is, if it attracts outsiders to buy the local product and if it results in the sale of certain rights (broadcasting, product licensing) to national firms. But, in reality, sports has little effect on regional net exports.
Sports facilities attract neither tourists nor new industry. Probably the most successful export facility is Oriole Park, where about a third of the crowd at every game comes from outside the Baltimore area. (Baltimore's baseball exports are enhanced because it is 40 miles from the nation's capital, which has no major league baseball team.) Even so, the net gain to Baltimore's economy in terms of new jobs and incremental tax revenues is only about $3 million a year--not much of a return on a $200 million investment.
Sports teams do collect substantial revenues from national licensing and broadcasting, but these must be balanced against funds leaving the area. Most professional athletes do not live where they play, so their income is not spent locally. Moreover, players make inflated salaries for only a few years, so they have high savings, which they invest in national firms. Finally, though a new stadium increases attendance, ticket revenues are shared in both baseball and football, so that part of the revenue gain goes to other cities. On balance, these factors are largely offsetting, leaving little or no net local export gain to a community.
In the excerpt above, they're largely talking about Camden Yards in Baltimore, which is often held up as the exception to any economic nay-saying. The problem is that even for Camden Yards, the effect is negligible at best. For other municipalities, it's worse than negligible.
Sure, there's probably an electoral cost to be borne by those elected officials who allow a signature sports franchise to leave town, but in reality it's a show of resolve. Handing over money to a private entity (or donating land or extending tax forgiveness or providing infrastructure or conducting a bond offering) is a form of welfare. However, said welfare is bestowed an entity -- a professional sports franchise -- that demonstrably doesn't need it. Means-testing, where art thou!
As a matter of principle, liberals should be opposed to lavishing private businesses with public subsidies, and conservatives should be opposed to the tax increases that enable these sorts projects. Yet they still keep happening. At some point, local leaders should pressure each other to sign a pledge of some sort that declares if pro sports teams want their own place of business, then they should pay for it themselves. Without the ability to play cities against each other, teams would be forced to do just that. However, that kind of "responsible collusion" will almost certainly never come to pass.
So we'll again be treated to folk tales of the jobs (seasonal, temporary) and wages (low) and revenues (generally shuffled around from existing ones) that ballpark projects will deliver. Those tales still won't be true, but the people who matter will go on believing them, or at least pretending to.