Over the past twenty years, there has been a ninety percent replacement rate of stadiums, more than a hundred new sports facilities, with nearly all of them receiving public funding. The most common enticement for such a large public investment lies in the hope of creating jobs and growing local economies. In addition to direct employment (stadium and franchise staff), indirect employment serving neighboring shops, restaurants, hotels, and public transportation systems are often positively affected as well. Additionally, when new stadiums are erected, a spike in spin-off development often occurs as a result and ultimately has a positive effect of revitalizing the city. Additional potential benefits include an increase in tourism revenue and an increase in tax revenue (University of Michigan). But are the benefits of stadiums ultimately just a pipedream sold to fools?
In 1997, Andrew Zimbalist co-authored a book with Roger G. Noll which suggested that “A new sports facility has an extremely small (perhaps even negative) effect on overall economic activity and employment” and further concluded that “no recent facility appears to have earned anything approaching a reasonable return on investment. No recent facility has been self-financing in terms of its impact on net tax revenues. Regardless of whether the unit of analysis is a local neighborhood, a city, or an entire metropolitan area, the economic benefits of sports facilities are de minimus” (Noll & Zimbalist, 1997).
With all the talk of the economic benefit of creating jobs, it is important to expand on the reality of this suggestion. Most middle-class citizens have an allocated entertainment budget. As a result of a sports team moving into their community, or the refurbishment of an existing stadium, members of the community do not increase their individual entertainment budgets. A mere shift in an existing budget results in the suffering of alternate entertainment establishments such as bowling alleys, theatres, and restaurants; including the employees of these establishments. All of this negatively affects local business owners and their employees while sports franchise owners and highly paid players (who account for the largest percentage of a sports franchise budget) are not affected. In an example of the employment and payroll in Multnomah County, the following table includes all professional and semi-professional sports teams, athletes, and associated businesses relevant to all spectator sports in the area; including the Portland Trailblazers. In Multnomah Country, in addition to the Trailblazers, there is also a minor-league baseball team, Portland International Raceway, Portland Meadows horse-racing track, Mulnomah Greyhound Park, and various other small spectator sport venues.
Employees Payroll ($100,000s)
% of total Total Spectator
% of total
County 380,379 762 0.20% 14,130,922 116,550 0.82%...