Whenever professional economists are asked about stadium and arena deals, they invariably explain, for the hundredth time, that these “almost never” work out to the benefit of the public. (Look, here are a bunch saying so just a few weeks ago!) Between the price tags in the hundreds of millions of dollars and the feeble economic returns that sports venues generate—pro sports teams, economists like to note, do about the same amount of annual sales as a large grocery store—it’s settled science that it’s nearly impossible for taxpayers to come out ahead.
This browser does not support the video element.
But nearly impossible isn’t completely impossible. In a vanishingly few cases since the dawn of the Age of Sports Subsidies, pro sports team owners in the U.S. have managed to build new homes for their franchises in ways that don’t entirely suck, even in the eyes of the most jaundiced skeptics. (Like me.) Sometimes this happens in response to a populace that outright refused requests for government cash; sometimes it’s thanks to an owner so desperate to crack a lucrative market that he didn’t mind opening his own wallet to fast-forward the process; sometimes it’s just because sports barons are unpredictably irrational beings who probably don’t even know why they do the things they do.
To honor the exceptions that prove the rule, and to see what if anything other cities and their citizens can learn from the successes, here are three stadiums and one arena that, by all accounts, did not break the backs of their cities’ taxpayers. Learn from them—or at least, go to games there without fear of breaking out into an apoplectic rage when you realize how much tickets cost on top of all the tax money you already shelled out for the building, only to have them name the place after some damn bank.
Cost: $357 million ($15 million public)
Why it doesn’t suck: First and foremost, it’s the only MLB stadium since 1962 that was built almost entirely with private funds: Aside from some free land provided by relocating an existing transit depot, the stadium’s costs were entirely covered by the Giants ownership, with the team making its last $18 million annual debt payment last year. In a rarity for MLB, Giants owners even pay property taxes, though they have been asking for breaks on those. The resulting budget constraints helped make for a relatively compact ballpark with good sightlines. (In modern terms, at least; we’ll never see the likes of old Comiskey Park again.)
On top of that, the former Pacific Bell Park has by all accounts been a decent neighbor to its adjacent South of Market neighborhood. The stadium’s impact on “revitalizing” its surrounding is probably overblown—SoMa was already developing like crazy in the 1990s—but the ballpark, located on a spit of land that was at the far edge of the developing district, at least didn’t displace any existing homes or businesses and has integrated reasonably well into the tsunami of hypergentrification that has overtaken the city without necessarily exacerbating it.
How it happened: Former Giants owner Bob Lurie tried four separate times to get public funding for a new stadium passed in either San Francisco or San Jose—and four separate times got his head handed to him in public votes. In 1992, he finally tried to move the Giants to St. Petersburg, Florida, and was informed by MLB that he should seek a new local owner instead. Enter Safeway supermarket magnate Peter Magowan, who surprised pretty much everyone by initiating a ballot measure to fund a stadium almost entirely out of his own pocket. The vote passed by a 2-to-1 margin, and baseball had its unicorn.
The lesson: Citizen initiatives, which are common on the West Coast but limited in much of the rest of the nation, can be hugely important as a check on owner power, since it’s way harder to lobby tens of thousands of voters than a mere handful of elected officials. It’s no coincidence that the owners of the San Francisco 49ers, Los Angeles Rams, and Golden State Warriors have all managed to build new venues in recent years with relatively little in the way of public money, and the Oakland A’s owners are promising to do so as well; the Sacramento Kings arena, with $226 million in subsidies, are the outlier, but that’s still a pretty good ratio as these things go.
Cost: $155 million ($0 public)
Why it doesn’t suck: Orlando City SC owner Flávio Augusto da Silva footed the bill for the entire construction cost of the 25,500-seat, soccer-specific facility—and agreed to pay property taxes on the site, something that hardly any other big-league Florida sports venue does.
How it happened: For a couple of years, it looked like da Silva was determined to corral an MLS-sized subsidy for his new stadium (i.e., not a fuckton of money when compared to the Big Four North American sports, but at least a few hundred fuckpounds), getting a promise of more than $40 million in tax money from the city and county, then demanding another $30 million in state tax rebates in exchange for creating a grand total of 60 permanent jobs. Then, in one of the all-time stadium stunners, da Silva announced in May 2015 that since the state tax money wasn’t forthcoming, he would give back all of the subsidies and build the stadium himself, and even pay market rate for the land it would be built on. This last turned out not to be 100 percent true—da Silva made sure he could deduct construction cost overruns from his land costs—but it’s still practically off the charts in non-suckiness, grading on the usual stadium curve.
Orlando’s low-income Parramore neighborhood is even getting a bit of an economic boost at the same time as the stadium is opening, though Florida State University urban planning professor Tim Chapin, who has studied stadium “catalyst” effects nationwide and Orlando’s in particular, is skeptical of crediting 17 MLS home games a year with transforming an entire neighborhood.
“On a design level, the stadium interfaces really nicely with the community,” says Chapin, with a low grandstand profile and some nice artistic nods to local history. Beyond that, though, while
“there’s a lot of purple paint that’s been thrown up around the stadium,” new development is moving slowly, and what has occurred is more the result of improved roads than the lure of free-spending soccer fans. “In 20 years, it’s probably going to be a thriving urban district just because of its proximity to downtown. Did the Orlando City stadium create that? Absolutely not.”
The lesson: If you want to lure a pro sports team to town, you could do worse than to target MLS, since the league doesn’t yet have the pull with local politicians for subsidies that the Big Four sports do. Plus, at relatively low stadium and franchise prices you’ll find the occasional billionaire owner more concerned about landing an affordable North American sports team than about who foots the stadium bills.
Cost: $375 million ($0 public)
Why it doesn’t suck: When the NHL granted Las Vegas an expansion franchise in 2016, it didn’t need to make it contingent on a new arena, because the city already had one: a brand-new 20,000-seat building erected by casino owner MGM in partnership with arena management company AEG, all without a dime of public money. Sure, Vegas already had so many existing arenas that the city could have hosted the entire Arena Football League, but if the local casino owners wanted to sink their own money into a game of perpetual oneupmanship with concert and sports venues, that was no skin off residents’ noses—especially when those noses were already getting flayed by the Oakland Raiders for one of the biggest stadium scams in sports history.
How it happened: Compared to baseball and football stadiums, which almost invariably demand nine-figure public subsidies, there are a decent number of cities whose indoor arenas were built largely on their private owners’ dime: Boston, Denver, and several Canadian cities have managed the feat, and Seattle is in the process of an arena rebuild that should turn out pretty well for the public. In her exhaustive study of the full cost of pro stadiums and arenas, University of Michigan urban planning professor Judith Grant Long found that taxpayers put up an average of 65 percent of the cost of NBA arenas and 68 percent of NHL ones, versus 77 percent for MLB and 87 percent for the NFL.
One reason is obvious once you look at venue calendars: Unlike single-purpose stadiums, a well-used indoor arena, especially one that two major pro sports teams call home, can pack in enough concerts and Disney On Ice performances to book as many as 200 nights a year. (Yes, a few acts do play stadium gigs, but how many times is Paul McCartney going to visit your town each year?) Combine that with the relatively cheaper cost of a 20,000-seat arena compared to a 50,000-plus stadium—plus the ongoing arena management war that is encouraging operators like AEG to try to stake a foothold in every market—and paying for an indoor arena their own damn self is suddenly more feasible for owners when their demands for subsidies fall on deaf ears.
Not that all arenas are good deals, mind you: There are still plenty of instances of arena builders demanding hidden benefits like discounted land, or money for upgrades after the arena is complete, or even bailing out a money-losing privately built arena years later with public cash. Not to mention Madison Square Garden, which started out privately funded but somehow ended up with hundreds of millions of dollars in tax breaks because state legislators forgot to proofread their own bill. But then, there’s nothing stopping baseball and football team owners who already got their stadium construction bills covered from going back to the well again, so the less you can spend at the outset, the better.
The lesson: Multipurpose arenas are friendlier to taxpayers’ wallets than single-use stadiums. Except when they’re not.
Cost: $68 million ($68 million public, but wait)
Why it doesn’t suck: Wait, seriously? The Metrodome? The birthplace of homer hankies and the Baggie and fly balls hitting Matt Lawton in the head is a model of anything good?
Mock it if you want—and there was plenty to mock in terms of design—but the Metrodome’s financing plan was the Wrigley Field of public bookkeeping. Not only was the domed stadium built on the cheap—just $68 million in 1982 dollars, about a quarter the cost of the Marlins’ domed debacle even accounting for inflation—but the lease that the Twins and Vikings were convinced to sign required that the public would get its money back and more, via 100 percent of parking fees, more than half of gross concessions revenues, and 25 percent of stadium ad money.
How it happened: It was 1982, man, things were different then. The last round of new baseball stadiums had been the concrete donuts of the 1960s and ‘70s, and while cities largely fronted the money for those, team owners routinely paid significant rent on them as well. It wasn’t until a few years after the Metrodome, with the rise of Camden Yards and its retro ilk, that team owners realized they could have their subsidy cake and eat it too, shaving rent payments to near nothing while still sticking taxpayers with the initial bill.
On the downside, the Twins’ and Vikings’ owners soon figured this out as well, and went back to the Minnesota legislature to demand new buildings. It took a decade or so, but they won out in the end—and both Target Field and U.S. Bank Stadium absolve their host teams from any of that nasty revenue-sharing with taxpayers that went on back at the dome.
The lesson: Make sure your local team owners agree to repay any public costs through a city-friendly lease before they notice that none of their fellow sports barons are doing so, oh wait, it’s 2018 already, never mind, this ship has sailed.
In short, then: Democracy is good, powerful sports monopolies are bad, buildings that can be used a lot (either for concerts or multiple teams or both) are better than ones that are dark most of the year, and you should try to keep your local team owner from getting away with murder when it’s time to sign a lease. And while a good financing deal doesn’t guarantee a great stadium—that’s still up to the architects, and the owner’s personal taste in art—it can make it a little sweeter when watching your team lose in a characterless modern mallpark to know that at least you’re not getting soaked to pay for it.
Neil deMause has covered sports economics for more publications than even he can shake a stick at. He’s co-author of the book Field of Schemes: How the Great Stadium Swindle Turns Public Money Into Private Profit, and runs the website of the same name.