The impact of professional sports franchises and venues on local economies

THE IMPACT OF PROFESSIONAL SPORTS FRANCHISES AND VENUES
ON LOCAL ECONOMIES: A COMPREHENSIVE SURVEY
JOHN CHARLES BRADBURY

Kennesaw State University
DENNIS COATES
University of Maryland-Baltimore County
BRAD R. HUMPHREYS
West Virginia University
Abstract. Local governments routinely subsidize sports stadiums and arenas using the justifi-
cation that hosting professional franchises produces economic development and social benefits in
the community. The prevalence of venue subsidies generated an extensive and vibrant research
literature, which spans over 30 years and includes more than 130 studies. We chronicle this body of
research from early studies of tangible economic impacts in metropolitan areas, using basic empiri-
cal methods, through recent analyses that focus on sub-local and non-pecuniary effects and employ
more sophisticated empirical methods. Though findings have become more nuanced, recent analy-
ses continue to confirm the decades-old consensus of very limited economic impacts of professional
sports teams and stadiums. Even with added non-pecuniary social benefits from quality-of-life
externalities and civic pride, welfare improvements from hosting teams tend to fall well short of
covering public outlays. Thus, the large subsidies commonly devoted to constructing professional
sports venues are not justified as worthwhile public investments. We also investigate the paradox
of local governments continuing to subsidize sports facilities despite overwhelming evidence of their
economic impotence. Our analysis informs academic researchers and policymakers to motivate fu-
ture studies and promote sound policy decisions guided by relevant research findings. (JEL: R58,
H71, L83, Z28)
Date: April 4, 2022.

Contact: J.C. Bradbury, Department of Economics, Finance, and Quantitative Analysis, Michael J. Coles Col-
lege of Business, Kennesaw State University, 560 Parliament Garden Way NW, Kennesaw, Georgia 30144, jcbrad-
[email protected]. The authors thank Frank Stephenson, Nathan Jensen, Rebekah Bradbury, and session partici-
pants and the 2021 Annual Meeting of the Southern Economic Association for helpful comments and suggestions.
Electronic copy available at: https://ssrn.com/abstract=4022547

1. Introduction
Between 1970 and 2020, state and local governments devoted $33 billion in public funds
to construct major-league sports venues in the United States and Canada, with the median public
contribution covering 73 percent of venue construction costs.1 The prevalence of subsidized sports
stadiums and arenas spawned an active economics literature evaluating their efficacy at stimulating
economic activity. This literature contains near-universal consensus evidence that sports venues
do not generate large positive effects on local economies. Several existing surveys of this literature
have documented the strong consensus of null findings (Baade and Dye 1988b; Siegfried and Zim-
balist 2000; Coates and Humphreys 2003b, 2008; Coates 2007). However, this literature expanded
considerably since the last comprehensive literature survey. We survey the extensive academic lit-
erature on the economic impacts of sports teams and venues on local communities, which includes
more than 130 articles and spans more than 30 years, most published in the past decade. We doc-
ument the presence of a clear consensus in the results reported in this literature. Supplementary
Appendix Table A1 provides a list of included studies and brief summaries of the main findings.2
We also discuss explanations for why these subsidies continue despite the consensus evidence that
they generate little in terms of tangible local economic benefits.
The early empirical literature on economic impacts of sports venues and games primarily
employed multiple regression models using annual data aggregated to the metropolitan area level to
compare economic outcomes across urban areas with teams over time. With the key empirical ques-
tion, the (lack of) tangible economic impacts flowing from professional sports teams and venues,
largely settled, much of the recent economics and urban/regional development literature focused
on investigating the existence of localized economic development effects and quality-of-life amenity
benefits. Matheson (2019) notes that even though sports events are not associated with large tan-
gible economic benefits in metropolitan areas, and may not deserve substantial public funding, the
optimal subsidy for a new sports facility may be greater than zero. Benefits may be concentrated in
neighborhoods or business/entertainment districts that deliver concentrated economic benefits that
1
Real dollars in 2020 terms. 1970 to 2010 stadium funding from Long (2013), and subsequent funding from various
media reports compiled by authors.
2
There exists a complementary literature on mega-events (e.g., Olympic Games, World Cup, Super Bowl, etc.), which
similarly finds these events have limited positive impacts on host communities. We do not include these studies in
this review, as the subsidization of sports venues to host professional sports teams is extensive enough to warrant
a separate treatment. Economic studies of mega-events are sufficiently distinct and abundant to require a separate
survey and have been more recently summarized by (Baade and Matheson 2016; Barrios et al. 2016; Scandizzo and
Pierleoni 2018).
1

some communities may value. If the presence of a vibrant sports-anchored development represents
a desirable feature of modern cities, then sports venues may be useful and valuable developments.
The presence of a local team may also generate intangible non-pecuniary amenity benefits
that raise the welfare of local residents, even if they are not directly enriched by it. However,
studies that have estimated values for these factors still largely concur with early findings of the
inefficiency of stadium studies, which further supports the academic consensus of limited positive
impacts from hosting sports franchises.
Robust empirical findings documenting the impotence of professional sports in local economies
likely reflect a simple theoretical explanation: consumer spending on sports represents a transfer
from other local consumer spending, not net-new spending. Although sports games attract some
non-locals to spend money in the area, these visitors also crowd out other tourists attracted to
other consumption amenities common to major US cities. Even with the presence outside visitors
attracted by sports events, most consumer spending in and around pro sports venues derives from
local residents; therefore, the opportunity cost of local sports consumption falls primarily on other
competing local businesses, such as movie theatres, restaurants, and retail shopping. Most spending
on game tickets, concessions, and associated hospitality near a sports venue would have occurred
in other parts of the host jurisdiction without the presence of a pro sports team. Sports-related
spending largely reflects a redistribution of existing spending by residents rather than increased
local spending.
Any added spending from visitors attending games tends to be concentrated in certain sec-
tors in the local economy and in locations that may not bear the full tax burden generated by
subsidies. In addition, the influx of consumers also generates local nuisance or congestion exter-
nalities in the form of traffic, crowds, noise, litter, and crime, which may mitigate any positive
economic effects. Furthermore, there is no obvious reason to expect income or employment multi-
pliers from sports spending to be greater than those for other types of local consumption spending
that are crowded out; thus, the consistent empirical findings of insubstantial tangible economic
impacts from professional sports teams and venues conform to theoretical expectations.
This paper undertakes a systematic, comprehensive review of the literature assessing the
role that professional sports teams and venues play in local economies. We begin with a discus-
sion of the state of public funding of sports stadiums and arenas in Section 2, which provides
motivation for this survey. We then divide our literature review of economic impact studies into
2

specific subjects. Section 3 focuses on metropolitan-level studies, the dominant spatial unit of ob-
servation in the early literature. Section 4 summarizes research that focuses on sub-local economic
effects near stadiums, primarily related to business activity. Section 5 reviews estimates of positive
externalities from non-pecuniary intangible social benefits, and Section 6 reviews recent evidence
of negative nuisance and congestion externalities from hosting sports events. Section 7 critically
assesses several objections raised by the small minority of researchers who dissent from academic
consensus regarding the lack of tangible economic benefits. In Section 8, we address the apparent
paradox of why stadium subsidies persist despite the abundance of evidence that sports venues are
poor public investments. Section 9 concludes with a summary of findings and suggestions for future
research. Though research on the economic effects of sports franchises and venues is profuse, further
study is needed to exploit new empirical techniques and assess newer facilities and sport-focused
development strategies that local governments continue to support.
2. Stylized facts and key policy issues
In 1970, teams in North America’s four major sports leagues—Major League Baseball
(MLB), the National Basketball Association (NBA), the National Football League (NFL), and
the National Hockey League (NHL)—played games in 80 stadiums and arenas in the US (76) and
Canada (4) (Okner 1974). Between 1970 and 2020, 135 new or replacement stadiums and arenas
hosting teams opened, representing an average of 2.6 new venues per year. Figure 1 shows a modest
increase in new facilities in the 1970s and a robust construction boom occurring in the 1990s and
2000s. Few new facilities opened during the 1980s, and the period following the mid-2000s experi-
enced relatively less new facility construction; however, Humphreys (2019) notes that the average
age at which teams are replacing their existing stadiums (27 years) indicates that another wave of
stadium construction is expected within the next decade, as the facilities built in the 1990s and
early 2000s are deemed obsolete. For example, in 2017 team owners in Atlanta replaced their NFL
and MLB stadiums after only 25 and 20 years of use, respectively.
Stadiums and arenas are often replaced even though they remain viable venues. From the
1960s through the 1980s, NFL and MLB franchises often shared a public multipurpose stadium—
older fans will remember the infield dirt making for treacherous footing for football players in
shared stadiums. Team owners preferred separate single-sport stadiums rather than share space,
scheduling, and revenue with a co-tenant. A further motivation for teams to seek new facilities was
3

Arenas 8
10 Stadiums
Sports Venues Opened 8
6
6
3 2 2
3 5 3 1
4
4 4 1 4442 2 3
321 13 3 133 1 3 1 3
2
2 2 2 1 1 12 2 2 22 2 2 2 1 2
1 11111 1 111 1 1 1 1 1 1 11
0
1970 1980 1990 2000 2010 2020
Year
Figure 1. Major-League Sports Venues Opened in US and Canada by Year (1970–2020).

Stacked bars sum to cumulative annual total.
to generate added revenue from modern amenities, like luxury boxes and club seating, that cater
to a lucrative customer cohort of affluent individual and business spectators.
An added benefit to NFL teams was that premium seat fee revenue was not initially subject
to league revenue sharing (Vrooman 2012). Fort (1999) notes that the stadium revenues of teams
that have new facilities “often outpace the ‘have nots’ by a multiple of twenty in MLB and the
NBA, and almost forty in the NFL.” A novelty effect from constructing new venues that increase
the spectator demand and correspondingly increase team revenues is well-documented in all sports
leagues (Coates and Humphreys 2005; Bradbury 2019). Poitras and Hadley (2006) estimate that
the private returns from new stadiums are high enough to cover the construction costs, rendering
any spillover benefits to be inframarginal.
Although the rate of new facility construction slowed during the 2010s, the cost of new
sports facilities increased substantially. Long (2013) provides an extensive summary of publicly-
reported stadium costs and public contributions, which we extend through 2020. While median
publicly-reported costs represent 73 percent of total costs (60 percent mean) they routinely omit less
obvious costs, such as land, infrastructure, operations, capital improvements, municipal services,
and foregone property taxes. Long finds that including these relevant public obligations increased
4

public contributions 40 percent greater than reported costs in 2001 (Long 2005) and 25 percent in
2010 (Long 2013, p.80). Such underreporting of costs likely continues.
Figure 2 reports the fraction of total new facility costs covered by public subsidies, including
the mean and median public share by decade, which has declined over time. The average public
share of construction costs fell from almost 100 percent in the 1970s to approximately 50 percent
in the past decade; however, the declining public share largely reflects teams building more costly
stadiums than in the past, rather than a reduced public contribution.
100
Public Share of Total Facility Cost (%)
80
60
40
20
1970 1980 1990 2000 2010 2020

Year
Arena Stadium Decade Median Decade Mean
Figure 2. Public Share of Sports Venue Construction Costs (1970–2020). Sources: 1970–
2010, Long (2013), pp. 19–29; 2011–2020, compiled from media reports.
Figure 3 shows that public funding has increased as stadiums and arenas have grown more
expensive. Spectator sports are a normal good, and as the economy has grown, so have consumers’
tastes for sports spectatorship. Stadiums have evolved from austere multi-sport facilities with con-
crete bleachers and minimal concessions into extravagant sport-specific venues that offer amenities
and comforts for which spectators are willing to pay—luxuries which professional clubs are more
willing to provide when bearing less than the full cost. Propheter (2017) finds support for Quirk
and Fort (1997)’s gold-plating hypothesis, that stadium opulence is positively correlated with pub-
lic subsidies, with each $1 million in public funding associated with 20 to 50-percent increases in
construction costs. The three stadiums that opened in 2020 exceeded $1 billion in construction
5

costs. SoFi Stadium in Los Angeles, home to the NFL’s Rams and Chargers, cost $5.5 billion to
build.3
1,200
Arenas (Public cost)
Stadiums (Public cost)
1,000 Arenas (Total cost)
Stadiums (Total cost)
(in millions of real 2020 dollars)
Median Construction Cost
800
600
400
200
0
1970s 1980s 1990s 2000s 2010s
Figure 3. Stadium and Arena Construction Costs by Decade (1970–2019). Sources: 1970–
2010, Long (2013), pp. 19–29; 2011–2019, compiled from media reports.
In addition to subsidies provided by local and state governments, new sports facility con-
struction projects financed by sub-national governments may qualify for a federal tax exemption on
bond interest. Funding stadium construction with tax-exempt municipal bonds lowers borrowing
costs for team owners, which can result in significant cost savings on projects where expenditures
are measured in hundreds of millions of dollars. Drukker et al. (2020) estimates that the present
value of the implicit nationwide subsidy to bondholders from 2000 to 2020 was $3.6 billion, and
resulted in $4.3 billion in lost revenue to the federal government. Although the Tax Reform Act of
1986 included provisions designed to end this practice, the new restrictions had the unintended con-
sequence of increasing public funding from sources not tied to the facility’s use.4 Stadium projects
3
SoFi Stadium construction was entirely privately financed, which is a notable exception among recent new stadium
projects. Los Angeles did not host an NFL team from 1995 through 2015, and the two-team relocation to Los
Angeles was part of an NFL effort to return football to one of the US’s largest markets. Construction costs were
shared by the two team owners, and the League provided large loans to finance the construction.
4
The Act categorized municipal bonds as private—thus, not tax exempt—if more than ten percent of the funded
project is to be used by a non-government entity (private use test) or ten percent of the debt service was secured
by property used by a private business (private payment test). The latter test could be met by local governments
funding sports venues from tax revenue derived from non-stadium tax revenue, which incentivized local governments
to fund sports venues by diverting public revenue from other unrelated sources.
6

continue to receive substantial funding from local governments even when the public bond financing
is not tax exempt.
Though the literature on the economic effects of sports teams and venues has expanded
greatly since economists began studying the subject, economists’ opinions regarding the desirability
of public subsidization of professional sports has not changed. In 2005, a survey of American
Economics Association (AEA) members found that 85 percent of respondents agreed that state
and local governments should eliminate subsidies to professional sports franchises, and fewer than
five percent disagreed with ending the subsidies (Whaples 2006).
At the time, the strong agreement was noted as an issue where there is exceptional consensus
among economists, which has persisted. In 2017, the Initiative on Global Markets surveyed its
panel of US economic experts on the costs and benefits of state and local subsidies for constructing
stadiums. 80 percent of the responding economists agreed that the costs likely exceed the benefits.
The lone dissenting expert justified the subsidies because teams generate public good amenities that
are not captured by professional teams—and thus would be underproduced by the market—and
not economic development benefits that are often touted by stadium proponents.5
Strongly Agree 57 Strongly Agree 17
Agree 28 Agree 63
Neutral 10 Uncertain 17
Disagree 4 Disagree 3
Strongly Disagree 1 Strongly Disagree 0
0 20 40 60 0 20 40 60
Respondents (%) Respondents (%)
(a) Question: Local and state governments in the U.S. (b) Question: Providing state and local subsidies to build
should eliminate subsidies to professional sports fran- stadiums for professional sports teams is likely to cost the
chises. relevant taxpayers more than any local economic benefits
that are generated.
Figure 4. Economists’ Opinions on Sports Subsidies. (a) 2005 survey of American Economic
Association, 210 Ph.D. economist members, 81 respondents (Whaples 2006). (b) 2017 survey
of Chicago Booth’s Initiative on Global Markets panel of economic experts, 42 members, 30
respondents (IGM Economic Experts Panel 2017).
5
Michael Greenstone stated, “Sports teams generate value that they cannot capture thru tixs/tv—Chicagoans bene-
fited from Cubs winning [World Series]. Subsidies are compensation.”
7

3. Evidence from metropolitan area data
Economic studies of sports venues as drivers of economic activity began in earnest during
the stadium construction boom of the 1990s, when a growing number of new stadiums raised
concerns over using public funds to subsidize professional teams. Prior to this time, economic impact
estimates had been limited to consulting studies, often commissioned by parties with vested interests
in stadium projects, using estimation methods of limited credibility. Improved data availability
allowed economists to systematically search for evidence of economic effects using more credible
statistical methods. Early econometric studies largely used multiple-regression analysis to estimate
relationships between the presence of teams/stadiums and economic well-being in metropolitan
areas (MSA), which includes the host city proper and its connected surrounding communities.6
Much of the early literature on the economic impact of sports facilities is either summarized
or included in Noll and Zimbalist (1997), published by the Brookings Institution as a guide for
policymakers. The volume includes 15 chapters of analyses using various empirical strategies to
asses the economic effects from sports venues. The introduction summarizes the “unattractive
economics of stadiums” from the studies’ findings succinctly: “In every case, the authors find that
the local economic impact of sports teams and facilities is far smaller than proponents allege; in
some cases it is negative. These findings are valid regardless of whether the benefits are measured
for the local neighborhood, for the city, or for the entire metropolitan area in which the facility is
located” (p. vii–viii).
Findings in papers published in academic journals from that era are similarly dour. In
response to what the authors referred to as “stadium mania...sweeping the United States,” with
local politicians proposing sports as a channel for economic development, Baade and Dye (1988a,
1990) provide the first empirical analyses of sports stadiums on local economies by examining
impacts on a few selected US metropolitan areas extending from the mid-1960s to the early-1980s.
Baade (1996) extends this empirical strategy to estimate the relationship between the presence of
sports teams and new stadiums and cities’ income per capita and share of state employment in the
amusement and recreation sector using data from the late-1950s through the 1980s from an a larger
sample of metropolitan areas. The estimates do not identify positive impacts on host economies, and
6
Some early contributions focused on the policy landscape of the era and offer case studies in books. Baim (1994)
features several essays that were published as policy reports during the 1980s, and includes detailed financial in-
formation on several public stadium projects. Johnson (1995) provides a collection of case studies of minor league
baseball stadium development projects.
8

in some cases the estimates are negative. These studies use multiple-regression analysis to estimate
correlations between the presence of teams/venues and economic variables, while controlling for a
few other relevant factors. Though the empirical approach is rudimentary by today’s standards,
the analyses in these papers represents an improvement over prior forecasts generated by regional
input-output multiplier models that produced unreliable and unrealistic economic impact estimates.
Rosentraub et al. (1994) uses a comparative case study approach to examine Indianapolis’s
aggressive sports-focused development strategy in the 1970s and 1980s to evaluate the economic
progress of the city relative to nine other similar metropolitan Midwestern areas that lacked a
similar sports-focused emphasis. While the comparisons identify some small gains in the sports
sector, the improvements were largely inconsequential to the city’s development and economic
growth—a finding that is not surprising given the relative size of the sports sector to the city’s
economy (one percent). The authors conclude that Indianapolis’s experience indicates sports are
unlikely to generate the economic impacts that stadium boosters frequently claim.
Coates and Humphreys (1999) examines the impact of sports teams and stadiums on per
capita income level and growth for all US MSAs that hosted major-league teams from the late-1960s
through the mid-1990s, finding a negative association between a vector of “sports environment”
variables (e.g., the presence of teams, new stadiums, team entry and exit) with income level and no
relationship with income growth. The authors postulate that the significant negative correlation
may reflect the willingness of residents to accept lower incomes in return for the non-pecuniary
benefits of hosting a major-league sports franchises or the opportunity cost of public investments
that have higher returns. Coates (2015) revisits Coates and Humphreys (1999), extending the
sample by 17 years (1969–2011 total), including all US MSAs, and including NHL and Major
League Soccer (MLS) franchises. He finds no effects on wages or income. The findings are similar
to earlier estimates, and individual coefficients frequently indicate negative impacts of franchises
and stadium construction on metro-area populations.
Hudson (1999) uses techniques developed in the regional growth literature to estimate in-
direct effects of sports teams on local employment using a sample of US metropolitan areas over
20 years, in which most cities lost or gained major-league sports franchises. The estimates do not
identify a positive impact of teams on employment, and the author concludes that, when combined
with findings of other studies, available evidence “casts substantial doubt on the ability of a pro-
fessional sports team to act as an economic engine. Therefore, this justification for access to public
9

money does not stand up to close scrutiny” (p. 407). Lertwachara and Cochran (2007) employs a
unique financial event study methodology to observe the impact of major-league franchise expan-
sions and relocations on host cities’ economies for the last three decades of the twentieth century.
The authors find that team acquisitions were negatively associated with income per capita in the
short and long run, consistent with Coates and Humphreys (1999).
Coates and Humphreys (2003a) uses a similar empirical approach and sample period as
Coates and Humphreys (1999) to examine employment and earning in sectors that ought to be
impacted differently by sports, which permits more explicit observation of how sports impact local
economies. The estimates suggest that sports are associated with a small positive effect on earnings
per employee in the Amusements and Recreation sector, but the effect is offset by decreased earnings
and employment in other sectors. The findings are important, because they help explain why
commercial sports activity—which is easily observable to the general public, and thus often a
source of expectation for positive economic effects—does not translate into increased economic
activity in studies of aggregate economic performance.
Sports commerce primarily reflects a transfer of economic activity from other sectors (restau-
rants, bars, and retail), which is not easily observable. Coates and Humphreys (2003a) represents
the first study to document this trade-off empirically, which economists had long-theorized as the
most plausible explanation for the limited impacts of sports on the broader local economy. The
results also have strong implications for projections of significant economic impacts based on large
multipliers, because the findings indicate sports are substitutes rather than complements to other
sectors of the economy. Instead of generating positive spillovers, multipliers from sports appear to
be no more than one. Jasina and Rotthoff (2008) identifies a similar impact of teams on worker
wages in counties that host major-league teams.
Coates and Humphreys (2011) further investigate industry-specific effects by examining the
relationship between the presence of major-league franchises in a metropolitan area and earnings
of individual males in occupations directly (e.g., athletes, coaches, stadium attendants, etc.) and
indirectly (e.g., restaurant and hotel employees) impacted by sports using a sample that extends
from the 1980s into the early-2000s. Estimates indicate that some sports-related sectors may benefit
from hosting NFL franchises, but the effects for MLB and NBA are not strongly associated with
workers being indirectly impacted by sports. Miller (2002) examines the employment effect of
two sports venues being constructed in St. Louis, finding no impact on construction jobs or wages,
10

which is consistent with these projects being substitutes for other construction projects rather than
generating new construction work.
Noting that most existing sports venue impact estimates were heavily weighted by baseball
and football stadiums, Propheter (2012) focuses on the economic impact of basketball arenas on
local economies. Basketball stadiums tend to be cheaper to build and are more multipurpose in
function, with the ability to host hockey, concerts, and other events; thus, they may have stronger
effects. Using a sample of MSAs that hosted NBA teams from the 1980s through the 2000s,
Propheter identifies mixed effects on per capita income, with some positive effects in earlier eras;
however, modern basketball-only facilities in the 2000s were associated with income declines. In
total, he concludes that, like football and baseball stadiums, basketball arenas are not catalysts for
economic development.
Endogeneity represents an obvious concern with empirical approaches using simple indicator
variables to identify the impact of team presence in panel regression models. Perhaps the existence
of a professional sports franchise in a city reflects something about its depressed economic conditions
that is associated with sports commerce but not caused by it. Rather than hindering the local
economy, sports teams could be a symptom of other economic maladies and actually keep cities
from experiencing even worse economic conditions.
Research casts doubt on the importance of endogeneity in this setting. Coates and Humphreys
(2001) exploit plausibly exogenous shocks to local sports markets created by labor strikes and lock-
outs (a negative shock) and playoffs appearances (a positive shock) as natural experiments. The
authors find labor stoppages in baseball and football did not generate significant impacts on per
capita income in host cities. In addition, franchise departures were not associated with negative
economic outcomes. Coates and Humphreys (2002) finds no positive impact from postseason par-
ticipation on per capita income. The limited impacts of external shocks further demonstrates the
impotence of professional sports activity in local economies.
Islam (2019) uses the synthetic control method to estimate the extent of development effects
of hosting professional sports teams. The synthetic control method is a formalized case study
approach, developed in a series of papers summarized by Abadie (2021), designed to infer causal
effects in natural experiments, which makes it ideal for analyzing policy choices of local jurisdictions.
The analysis compares the economic performance of three cities that received NFL teams in the
1990s to synthetic control cities constructed using data from cities with similar characteristics
11

that did not gain NFL teams, finding no evidence of either improved income or employment in
communities that gained new teams.
Several studies focus on the economic impacts of minor-league baseball, which also receive
substantial subsidies from smaller communities, and are more spatially dispersed around the US
than major-league teams. Agha (2013) identifies some positive correlations between the presence
of minor-league baseball teams and stadiums and local per capita income using data from the mid-
1980s to the mid-2000s. This paper does not identify negative relationships found in similar studies
of major-league teams. Agha (2013) posits that the difference relative to Coates and Humphreys
(1999) may reflect lesser displacement effects from smaller minor league team operations.
Agha and Rascher (2021) examines the impact of both major- and minor-league teams on a
large sample of almost 900 metropolitan (MSA) and micropolitan (MiSA) statistical areas from the
mid-2000s through the early-2010s using difference-in-differences and panel regression techniques to
identify the impact of teams in different-sized markets. The authors find no impact on employment
or establishments and conclude that teams tend to move to strong markets rather than teams
producing economic development, similar to findings from studies of major-league sports teams.
3.1. Summary of evidence from metropolitan area data. Studies analyzing the economic
impact of professional sports on metropolitan areas report little evidence of strong economic impacts
in urban areas home to major-league teams. While not surprising in light of the clear importance
of displacement effects, the empirical evidence clearly contradicts common claims of large tangible
benefits from hosting sports activities made by subsidy proponents.
4. Evidence from localized data
While large metropolitan area wide economic effects from sports venues do not appear to
exist, areas in close proximity to stadiums and arenas may experience hosting spillovers that are not
apparent in aggregate city and region level data. Even if localized impacts occur, the assumption
that sports commerce has positive spillovers on surrounding businesses is naı̈ve, because stadiums
can either foster or hinder different types of economic development, depending on the specific
characteristics of the host community. While policy debates typically focus on positive externalities,
researchers also identifies negative spillovers. Even if localized net effects are positive (or negative)
the distribution of the impacts on different sectors is important, because stadium subsidies typically
come from broader municipal and state tax jurisdictions.
12

Humphreys and Zhou (2015b) takes a formalized approach to understanding local agglom-
eration effects from stadiums by providing a spatial equilibrium model of the interplay of factors
that influence business entry to and exit from the area surrounding a stadium, as well as the impact
of these changes on local income, employment, business activity, and housing values. Agglomera-
tion economies arise from the ability of professional sports to attract large numbers of consumers
at the same time to a particular location, creating an “arena district” where city residents con-
gregate to consume complementary entertainment goods and services. Fan-driven consumer traffic
makes it profitable for related businesses to co-locate near sports facilities. However, businesses
that lack complementarities to sports may be disadvantaged by taxes levied to fund the project
and experience negative spillovers from congestion and crime and thus relocate outside the arena
district.
The model predicts that the net impact of sports venues concentrates near the venues and
depends on the specific characteristics of host areas. The net impact may be positive or negative,
depending on the degree of substitution between the services a business provides and consumers
attracted by the venue development. Less-developed areas with low property values are more likely
to experience improvement, while perviously-established business and retail centers are prone to
induce establishment departures as a result of reduced demand for existing services.
This section summarizes the sub-metropolitan area economic development literature, which
examines granular economic impacts of sports within cities motivated by the model developed by
Humphreys and Zhou (2015b). Economists have searched for localized development effects using
measures of business activity, local sales, and impacts on hotels, which we discuss in separate
subsections. Though there is some evidence of positive localized tangible impacts, particularly in
the immediate vicinity of venues, overall findings are mixed. The economic development case for
subsidizing sports stadiums remains tenuous, as many studies continue to find little-to-no economic
impacts, even in areas immediately surrounding stadiums. Stadiums also appear to have distribu-
tional impacts with unequal benefits and costs, as predicted by Humphreys and Zhou (2015b).
4.1. Local business location and activity. Harger et al. (2016) examines the impact of new
stadiums on nearby business establishments in 10 US cities in the 2000s. Difference-in-difference
estimates do not identify any strong effects on the number of new businesses or employment in
general; however, the authors estimate small positive effects on employment at eating and drink-
ing establishments within one mile of the stadiums. These localized findings are consistent with
13

Coates and Humphreys (2003a), which identify positive redistribution effects to sectors that are
complementary to sports consumption.
Propheter (2019b) similarly observes employment at two stadium sites in Denver, Colorado
following the relocation of the city’s MLS team from downtown to a new suburban stadium in
2007. Neither location exhibited relocation effects, indicating limited impacts of the team on the
immediate hosting area. Propheter (2020b) examines the impact of Sacramento’s NBA arena
on nearby businesses’ survival time from the 2000s through the 2010s. Stadium proximity was
associated with shorter survival time for retail businesses relative to similar establishments located
further way from the venue. Other sports-complementary establishments (e.g., restaurants, lodging,
etc.) were not affected by the arena. Both findings are inconsistent with the notion that stadiums
are magnets for business development.
Bradbury (2022b) uses the synthetic control method to estimate the impact of the relocation
of Atlanta, Georgia’s MLB team from downtown to a suburban Business Improvement District
(BID) in 2017. Commercial property assessments, which should capitalize local business activity,
decreased following the stadium’s opening relative to other metro-Atlanta BIDs, but the difference
was not statistically significant. In contrast, Propheter (2019a) identifies a positive impact on
commercial rents following the opening of Brooklyn’s NBA arena; however, the sample is limited
to commercial lots within one mile of the arena. Whether these higher rents resulted from an
increased demand for rental space or a reduction in supply of such space is an open question.
4.2. Local sales. Economists also use local sales and sales tax collections data to estimate eco-
nomic effects of hosting teams and opening new facilities. If sports events generate net-new revenue,
then this should be evident in changes in local purchases, as external consumers transfer their spend-
ing to the host jurisdiction. It is somewhat surprising that economists have not analyzed sales or
sales tax revenues more often to estimate the economic effects of sports events, because most local
jurisdictions raise revenue through sales taxes and collect detailed data on sales and sales taxes.
Existing studies in this literature tend to fall into one three groups.
The first group of studies analyzes impacts of hosting specific sports events plausibly asso-
ciated with a game day influx of visitor spending generated by sports events. Though they do not
all focus on the impact of the presence of professional sports teams, the findings are informative
in terms of the impact of hosting sports on local sales since the other sporting events analyzed
also attract large numbers of fans on game day. Coates (2006) identifies positive impacts on local
14

sales from hosting the Super Bowl in Houston, Texas; however, Porter (1999) does not identify an
effect in Arizona or Florida. No effect is identified from hosting MLB’s All-Star Game (Baade and
Matheson 2001; Coates 2006). Baade et al. (2011) identifies some positive impacts from hosting
college football games, but not basketball games, in Florida college towns; however, Depken and
Coates (2009) does not identify a similar effect of football in Texas college towns.
The second group of studies uses the empirical strategy of exploiting the presence of teams
and events over a long period of time on sales activity. This facilitates identification of the impact of
particular events as well as the presence of professional teams playing home games during the regular
and post-season periods. Baade et al. (2008) examines four large Florida cities home to major-
league teams and mega-events. These cities also experienced work stoppages, league expansions,
new stadiums, and other non-sports-related economic shocks over the sample period. In a similar
vein, Depken and Coates (2011) examine a large sample of Texas cities that hosted college games
and other sports events outside the commonly analyzed four major professional sports leagues.
The results indicate some positive impacts from championship games, but no effects from hosting
professional sports teams.
The last group of studies perform formalized case studies of newly-opened sports venues that
estimate the impact of new team’s arrival on local sales tax revenue. Propheter (2014) examines
the opening of Toyota Park in the Chicago suburb Village of Bridgeview, Illinois on sales tax
revenue. The $106 million stadium was 100-percent publicly financed by Bridgeview to attract
MLS’s Chicago Fire. Sales tax receipts did not increase following the stadium’s completion in 2006,
indicating that the stadium did not increase local economic growth or generate added tax revenue
to sufficiently cover the subsidies received. Estimates also show mixed effects on surrounding
municipalities.
Mills et al. (2014) estimates the impact of sales taxes levied to fund new MLB and NFL
stadiums in Arlington, Texas on local tax revenue. The authors report increased tax revenue from
the tax rate increase, which is unsurprising. The authors infer that some tax revenue was exported
from outside Arlington following the opening of new facilities, and that added taxes deterred some
local busines formation. The results indicate an indeterminate impact of the new taxes on the local
community.
Stitzel and Rogers (2019) analyze industry-level sales by businesses located near the Chesa-
peake Energy Arena in Oklahoma City, Oklahoma, where the NBA’s Thunder relocated in 2007.
15

Using a difference-in-differences approach, the authors focus on sales in sports-related industries
(i.e., food and drink, entertainment, hotel, and retail) operating within five miles of the arena. They
identify a proximity effect with sales being 20 percent higher within one mile of the arena relative to
businesses located further away, much like Harger et al. (2016)’s findings on employment in eating
and drinking establishments. The authors also find a positive complementary impact on nearby
food establishments, but entertainment establishments experienced decreased sales, indicating the
impact of a substitution effect. The latter finding supports a key prediction of the model devel-
oped by Humphreys and Zhou (2015b) in terms of agglomeration of businesses in complementary
industries and exit of businesses in substitute industries.
Depken and Fore (2020) examines the impact of several events in downtown Charlotte,
North Carolina using proprietary data from one restaurant located walking distance from several
sports venues from 2007 to 2013. Impacts associated with citywide sports and convention events
were mixed, but events held at nearby venues hosting the Carolina Panthers (NFL) and Charlotte
Bobcats (NBA) were associated with increased sales, again consistent with the expected impact
of sports events on a nearby complementary business in the model developed by Humphreys and
Zhou (2015b).
Bradbury (in press) employs the synthetic control method to estimate the impact of Cobb
County, Georgia’s Truist Park and its associated mixed-use development intended to support year-
round commerce, on sales tax collections. Though a small increase in tax revenues was evident,
particularly during baseball seasons, approximately one-third of the stadium-development’s revenue
resulted from crowding out of other local economic activity, and the added tax revenue fell well
short of covering provided government subsidies.
4.3. Hotels occupancy and room rates. New sports venues are often touted as important
catalysts for tourism, generating new spending by visiting patrons who would otherwise not consume
local goods and services. Data from individual hotels offers a setting in which to identify spending
by visitors who travel to a city to attend games.
Lavoie and Rodrı́guez (2005) uses the Box-Jenkins method to identify impacts of several
league work stoppages on hotel occupancy aggregated to the city level in eight Canadian cities
during the 1990s, when the cities also experienced team departures and arrivals. The results do
not support the existence of strong impacts of sports on hotel occupancy, though three cities did
experience declines in hotel stays during the 1994-1995 lockout.
16

Depken and Stephenson (2018) estimates the relationship between multiple sports and en-
tertainment events in Charlotte, North Carolina on daily hotel stays, room rates, and revenue. The
sample period from 2005 to 2013 includes regular season and post-season NFL and NBA games
(both located downtown), as well as college sports, professional golf, auto racing, and non-sports
events. NFL regular season and postseason games were associated with increased room rentals,
rates, and revenue, with approximately 40 percent of increased room rentals occurring in the city
center, and having no impact on the suburbs. This includes a day-prior effect, but not earlier or
day-after effects. NBA games were not strongly associated with any hotel outcomes.
The authors find larger positive effects for multi-day events designed to attract out-of-
town visitors (e.g., auto races, college basketball tournaments, and a political convention). This
is consistent with findings regarding the Super Bowl and NFL regular season games generally
increasing hotel rentals, rates, and revenue for host cities over several days (Heller and Stephenson
2021). The estimates also identify spillover effects within the metropolitan area that impact non-
funding jurisdictions. Ultimately, the authors conclude the evidence suggests that tourism-related
tax revenue is a tenuous reason to justify public subsidies for sports venues and events, because
visitor impacts appear to be small.
Stephenson (2021) conducts a similar analysis of hotel stays, room rates, and revenue in
St. Louis, Missouri and San Diego, California, which both lost NFL teams in 2016 and 2017,
respectively. In St. Louis, MLB and NFL games were associated with small increases in most hotel
outcomes, but increased hotel activity was not associated with NHL games. In San Diego, the NFL
team and a college bowl game were associated with positive hotel outcomes. San Diego also hosted
one MLB All-Star game that was associated with a small increase in hotel revenue, but not hotel
stays or room rates, consistent with prior estimates of limited economic impacts of all-star games
(Baade and Matheson 2001; Coates 2006).
Chikish et al. (2019) exploit exogenous variation in the timing of events hosted at the Staples
Center in Los Angeles, California to analyze how events in the arena affected local hotel outcomes.
The authors identify a small positive impact on room revenue at hotels within one mile of the
venue; however, hotels located between one to four miles away experienced larger declines in room
revenue. NHL events were associated with declines in all hotel outcomes and NBA events were
positively related to room rentals and revenue, but negatively related to room rates. Also, during
17

work stoppages in both professional leagues, hotel rates were higher instead of lower, exceeding
off-season rates.
Overall, the results are not consistent with the idea that events in the Staples Center
increased demand for nearby hotels over what visitors would have purchased absent events in the
arena. Instead, patterns in hotel occupancy reflects significant spatial displacement of substitute
economic activity. While nearby hotels may benefit from arena events, demand reductions in less-
proximate hotels implies an uncertain total impact on local hotel revenue and tax collections. The
findings do not support the use of hotel taxes and fees to fund sports arenas.
Though sports events may be common destinations of visitors, their impact on local hotel
activity is limited, which is understandable. Hospitality industry firms typically construct hotels
where demand is sufficient to meet capacity year-round; thus, hotel rooms rented by game atten-
dees for infrequent sports events are unlikely to have a large impact on filling otherwise empty
rooms. Furthermore, visitors travelling to an area to attend sporting events may crowd out visitors
travelling to that area for other reasons, including business travel.
4.4. Summary of localized development effects. Though studies identify some localized pos-
itive effects near sports facilities, such findings are not ubiquitous in the literature. In general,
when positive effects exist, they occur very close to venues, within one or two miles, and in sectors
closely related to sports consumption (e.g., food and beverage). This pattern in the results strongly
supports the predictions made by the model developed by Humphreys and Zhou (2015b). The ef-
fects likely differ across types of sports facilities and events because of pre-existing characteristics
that may or may not complement sports-focused economic development. A key lesson from this
literature is that even at the most spatially disaggregated levels, positive economic development
effects are not guaranteed, and positive spillovers appear to manifest only in favorable commercial
environments. The findings also highlight the potential for negative externalities that may deter
business formation, not a prominent argument in public policy debates over stadium subsidies. We
further discuss this point in Section 6. Overall, the evidence indicates limited localized economic
development halos from stadiums and arenas.
5. Positive externalities from intangibles
Even if sports teams and venues do not generate tangible local economic benefits, public
subsidies could be justified if local residents receive sufficient intangible social benefits from their
18

presence. Teams and venues may produce local public good benefits, such as promoting social
cohesion and civic pride, and enhance the host’s image as a “big-league city.” Sporting events
may also generate spillover amenities like pedestrian-friendly areas and entertainment districts
that improve the quality of life for nearby residents. These social benefits are not captured in
transactions in sports markets. The presence of a professional team or new stadium may increase
local social welfare sufficiently to warrant public subsidies to remedy a market failure generated by
the presence of these externalities.
Even if the tangible economic benefits are non-existent, intangible benefits may be sufficient
to generate a positive return on a public investment in a new sports facility. A body of economic
research employs a number of complementary empirical strategies, including the Contingent Valu-
ation Method, analysis of property prices, analysis of voting in referenda on facility subsidies, and
estimation of consumer surplus in sports markets, to quantify intangible welfare gains from hosting
teams. We next survey this literature.
5.1. Contingent Valuation Method. Noting that governments often justify funding new sta-
dium projects because sports teams generate large positive externalities, Johnson and Whitehead
(2000), in a seminal study, use the contingent valuation method (CVM), a stated preference ap-
proach, to measure how much residents value the presence of local sports teams in the context of two
proposed new sports facilities. Environmental economists developed CVM to quantify individuals’
nonuse value of environmental assets. In this literature, nonuse value refers to intangible benefits
generated by the presence of environmental assets that individuals may or may not consume or
directly experience. Environmental assets valued using CVM include wilderness areas, national
parks, endangered species, and others. CVM employs survey questions designed to elicit individual
preferences objectively for non-priced goods in hypothetical settings. In the case of sports facilities,
CVM studies focus on a different hypothetical: proposed new sports facilities.
Johnson and Whitehead (2000) use surveys of households in Lexington, Kentucky to esti-
mate a nonuse value of a minor-league baseball team and a college basketball team. In this setting,
estimated nonuse value represents a small portion of residents’ willingness to pay for host sports
facilities (10 and 30 percent, respectively), which was not sufficient to justify the estimated public
cost of constructing the venues.Similarly, Johnson et al. (2001) use CVM to estimate the nonuse
value of Pittsburgh hosting the NHL’s Penguins, finding the nonuse value to be 73 percent of the
total willingness to pay for a new stadium for the team. The estimated nonuse value ($17.2–$48.3
19

million) fell well short of the $300 million in public funding used to construct a new arena in 2010.
Johnson et al. (2007) examine the nonuse value of Jacksonville hosting the NFL Jaguars and a
hypothetical NBA team, finding the nonuse benefits insufficient to cover actual or proposed public
facility subsidies.
Other researchers employ CVM to estimate the nonuse value of the NFL’s Minnesota
Vikings (Fenn and Crooker 2009) and Indianapolis Colts (Swindell et al. 2008), the NHL’s Calgary
Flames and Edmonton Oilers (Johnson et al. 2012), and a potential new MLB franchise in Portland
(Santo 2007). Each study reports estimated nonuse benefits less than the actual or expected public
subsidy provided for the respective new sports facility projects.7 The mean and median estimated
nonuse values, as a percent facility construction costs, are 18 and 12 percent, respectively in these
papers. Outside North America, Castellanos et al. (2011) estimates the nonuse value for the Span-
ish professional soccer club R.C. Deportivo of A Coruña and finds this sufficient to fund a new
stadium for the club but not sufficient to cover the club’s accumulated debt in 2003.
Though CVM provides a novel approach for estimating intangible benefits in the form
of nonuse value, researchers also criticize CVM for producing unreliable estimates of consumer
valuation. One criticism notes that survey respondents may not give accurate answers because
they lack the proper frame of reference to form meaningful estimates of their willingness to pay
when surveyed, called “hypothetical bias” in the literature (Diamond and Hausman 1994). Other
criticisms including embedding effects where the wording of survey questions affects nonuse value
estimates and ordering effects where the order in which survey respondents receive hypothetical
information affects these estimates. Hausman (2012) goes so far as to call CVM’s ability to measure
nonuse value accurately as “hopeless.”
However, other researchers defend the approach (Haab et al. 2013; Kling et al. 2012). Carson
(2012) describes CVM as a practical alternative when prices are not observable. Furthermore, CVM
adherents have not ignored its potential deficiencies and biases. In light of these criticisms, Johnson
et al. (2006) investigates potential biases in a CVM survey valuing sports teams in Jacksonville (see
Johnson et al. 2007), finding limited embedding and ordering effects and offering specific guidance
on how to avoid biases from these effects. Walker and Mondello (2007) addresses reliability and
7
Swindell et al. (2008) emphasizes the importance of the estimated positive nonuse value ($60-85 million), but that
estimate falls well below the public subsidy ($650 million) provided to build the new sports facility analyzed, Lucas
Oil Stadium in 2008.
20

validity CVM for sport valuation. Whitehead et al. (2016) also examines potential biases, reports
no evidence bias exists, and suggests corrections in situations where bias might exist.
Though imperfect, CVM provides a reasonable mechanism for quantifying nonpecuniary
benefits of hosting sports teams and events, which would otherwise be unobservable. Due to their
inherent limitations, CVM estimates should be viewed with appropriate skepticism and comple-
mented with estimates using other methods if possible. The main concern with CVM estimates is
that they may overestimate nonuse value; thus, if existing nonuse value estimates from hosting pro-
fessional sports teams are biased, then they likely overstate individual willingness to pay for hosting
sports teams. Overall, the findings of CVM investigations are not supportive of the quality-of-life
and civic pride justifications for funding sports venues at typical levels, with estimated average
nonuse values typically being less than 20 percent of facility costs. The presence of bias in nonuse
estimates for sports only strengthens the case against public subsidization of new sports facility
construction.
5.2. Property values. Carlino and Coulson (2004) observe that any external benefits and costs
generated by professional sports teams in cities ought to be capitalized into residential property val-
ues: “If people like having a professional sports franchise in their community, they are presumably
willing to pay for it, if not directly through the purchase of season tickets, then indirectly through
an increased willingness to pay for housing in the area” (p. 27). This hypothesis derives from
Tiebout (1956) and Oates (1969), who argue that spillover benefits and costs of publicly-provided
services should be reflected in local property values. Unlike survey-based evidence from CVM stud-
ies, property values reflect revealed preferences. Also, the model developed by Humphreys and
Zhou (2015b) predicts that sports facilities will affect nearby residential property values.
Carlino and Coulson (2004) estimate an hedonic housing pricing model accounting for home
and city characteristics in several large US metropolitan areas including indicator variables that
identify the presence of NFL and MLB teams. The estimates indicate an eight-percent increase
in rental prices in cities home to NFL teams, with stronger central city impacts. MLB teams are
associated with increased rents in suburban areas. However, Carlino and Coulson (2004) report
wages are two percent lower in NFL cities, which the authors interpret as a compensating differential
that residents are willing to pay to cover the costs of hosting an NFL team. The authors conclude
that their results “are substantial evidence that the quality-of-life benefits associated with hosting
an NFL team may justify the seemingly large public expenditures” (p.48).
21

Coates et al. (2006) re-estimate the Carlino and Coulson (2004) model using several rea-
sonable alternate specifications and find that the estimates are not robust to these alternative
specifications. Coates et al. (2006) conclude that cross-city variation in residential rents is consis-
tent with large positive spillovers from hosting sport teams and that spillovers cannot justify large
public subsidies. Carlino and Coulson (2006) disagree with the inferences drawn from the alternate
model specifications and defend their original estimates.
Tu (2005) uses a hedonic regression difference-in-differences approach to observe changes
in home sales prices in distance-bands from a new stadium in Landover, Maryland, which opened
in 1997 to host Washington, DC’s NFL football team. The estimates indicate negative effects of
stadium proximity—property closest to the stadium was valued less than property further away—
however, the negative relationship pre-dated the stadium. Before-and-after comparisons of sales find
that the proximity discount decreased after the stadium site was announced, and further decreased
following the stadium opening. Tu infers that the new football stadium generated positive spillover
effects on property surrounding the stadium, contrary to assertions of neighborhood activists who
claimed the stadium would adversely impact property values.
However, Coates (2007) notes that proximity to an NBA/NHL arena that closed during
the same year is an unaccounted confounding factor in the setting analyzed by Tu (2005) that
makes the inferences drawn from property value changes in this case less clear. In addition, the
Landover project is somewhat unique in that it was largely privately funded and received only a
small state-level subsidy so the team relocation analyzed here did not increase the marginal tax
burden to neighborhood residents, which normally accompanies new stadium projects.
Feng and Humphreys (2012) uses a spatial autoregressive hedonic pricing model to estimate
the impact of proximity to major-league sports stadiums and arenas on aggregated census block
property values in US metropolitan areas for 1990 and 2000. The estimates indicate a positive
association between sports facility proximity and housing values, for all venues. The finding is con-
sistent with positive stadium spillovers, but it does not necessarily reflect a causal relationship. It is
unclear if teams tended to locate sports stadiums in areas with higher residential property values, or
if stadiums caused property values to increase. Assuming sports venues are entirely responsible for
property value improvements, reasonable extrapolations from median values generate an estimate
of $254 million in added property taxes, which falls below the $339 million in construction costs;
22

thus, even if the sports venues generated positive residential spillovers, increased property values
tended not to be sufficient to cover their costs.
Feng and Humphreys (2018) uses the same empirical method to examine the proximity of
residential property near two stadiums in Columbus, Ohio, which host MLS and NHL teams. The
authors find increased housing values of 1.75 percent for each ten percent decrease in distance from
the facilities. The estimates are consistent with substantial intangible benefits from the venues,
which were greater than aggregate construction costs within one mile of the facilities. The facilities
were privately financed, so they did not directly increase residents’ tax burden.
Huang and Humphreys (2014) highlights the danger of inferring causation from correla-
tions between proximity to sports facilities and property values by analyzing variation in mortgage
applications in census tracts near new facilities using a difference-in-differences approach. Initial
estimates identify substantial increases in mortgage applications following the opening of 56 new
sports facilities in US cities during the 1990s and 2000s, consistent with the presence of positive
stadium spillovers. Further analysis indicates that much of the relationship can be explained by
pre-existing characteristics of new facility locations: the new facilities tended to be located in
poor and low-income areas, which experienced increased mortgage applications over the sample
period. The relationship between proximity and mortgage applications diminishes and becomes
statistically insignificant after controlling for these characteristics, which indicates that much of
the redevelopment would have occurred without the construction of new facilities.
Keeler et al. (2021) uses a hedonic spacial difference-in-differences approach to estimate the
impact of the opening of Staples Center in downtown Los Angeles, which was announced in 1997
and opened in 1999. The sample period from the mid-1990s to mid-2000s ends before the opening
of the nearby L.A. Live entertainment complex; thus, the estimates likely reflect only the impact of
the sports venue. Houses within close proximity experienced between eleven and six percent price
increases within one to two miles of the venue, respectively. The increased sale prices are consistent
with positive spillovers that derive from the arena. The arena analyzed is home to four professional
sports teams—NBA (2), NHL (1), WNBA (1)—and hosts concerts and other events, unusually
heavy use among sports facilities. The facility was constructed largely using private funds, with
the city covering less than 20 percent of the construction costs, so the critique in Coates (2007)
also applies here.
23

Agha and Coates (2015) extends the search for spillover effects in residential property
markets to the case of minor-league baseball teams, which are prevalent in mid-sized US cities.
Like major-league teams, minor-league teams often seek and receive significant public subsidies
for facility construction. The authors use residential rents in a hedonic pricing model, similar to
Carlino and Coulson (2004), to estimate the impact of the presence of minor-league baseball teams
in over 100 MSAs from the mid-1990s to the mid-2000s. The authors find a positive association
between rents and team presence in mid-sized cities, with rents being between six to eight percent
higher. Thus, there may be some benefit to hosting a minor-league team, where it brings some
respectability to a “big-league” town that might not otherwise be known beyond the area, as well
as generating civic pride, which tenants value.
van Holm (2019) uses a difference-in-differences approach to analyze the impact of new
minor league stadiums built around 2000 on residential property values in census tracts near the
new stadiums, and how their these residential property values changed a decade after the stadiums
opened. Median home prices were higher in tracts within one-mile of the stadium than in other parts
of the city; however, no effect was evident when compared to tracts with similar characteristics in
other cities without stadiums. Census tracts near new stadiums also experienced increased housing
density and vacancy rates after the stadiums opened. Thus, minor-league baseball stadiums were
associated with increased intracity agglomeration of housing but not with increases in citywide
residential property values.
Property value impacts have also been identified around sports facilities in Europe. Ahlfeldt
and Maennig (2010) uses a hedonic price model to estimate the impact of multipurpose Olympic
sports venues on land values in Berlin, Germany. Precise GIS mapping permits controlling for
other local amenities and disamenities, and the estimates indicate positive proximity effects for
the sports facilities. Ahlfeldt and Kavetsos (2014) analyzes changes in home prices following the
replacement of Wembley Stadium (English Football Association, opened in 2007) and Emirates
Stadium (Arsenal Football Club, opened in 2006) in London, England. The authors estimate
differences-in-differences models to compare changes in residential property values before and after
the new stadium announcements and construction.
Sale prices were positively associated with both stadium introductions, and varied accord-
ing to stadium characteristics, consistent with the presence of positive externalities. The new
stadiums were constructed near their predecessors; thus, the changes likely reflect the new stadium
24

rather than other changes nearby neighborhoods. The responses can only reflect amenity spillovers,
because neighborhood taxpayers bore little to no costs for the project.8
However, not all research identifies positive impacts on property values. Dehring et al.
(2007) conducts an event study using difference-in-differences estimation to observe changes in
residential property values in response to several proposed NFL stadium sites in the Dallas-Fort
Worth, Texas metro-area during the 2000s. Announcements regarding downtown relocation initially
increased nearby property values, and property values declined when the proposal was rescinded.
However, subsequent announcements regarding a relocation to suburban Arlington, Texas, where
the stadium would ultimately be built, were associated with decreased property values that were
commensurate with the added tax burden of the project.
Borges and Whetstone (2022) also finds heterogeneous effects on residential property values
associated with the relocation of the NFL’s Raiders to Las Vegas, with nearby less-expensive homes
benefiting from the stadium’s announcement, while more-expensive homes experienced losses. In
addition, homes closer to the stadium experienced positive effects, while more distant homes expe-
rienced negative effects.
Humphreys and Nowak (2017) examines the impact of two NBA team departures in the
2000s on local property sale prices by analyzing repeat home sales near basketball arenas in Char-
lotte, North Carolina and Seattle, Washington. Estimates indicate that home prices increased
between six and 14 percent following team departures, which is consistent with the teams generat-
ing residential disamenities on the host communities (see Section 6). Joshi et al. (2020) similarly
analyzes repeat housing sales to estimate the impact of the promotion of the Seattle Sounders to
MLS in 2009 and finds a reduced property values with distance-decaying effects following the team’s
promotion.
Propheter (2021) uses California’s uniform tax assessment laws to estimate the impact of
proximity to three Los Angeles sports stadiums on assessed residential property value recovery speed
after the 2007 Great Recession. Propheter (2021) employs an accelerated failure time estimator to
measure how long it took for recession-devalued properties within three miles of the stadiums to
return to pre-recession levels, using both residential and commercial parcel assessments. Proximity
to Staples Center (NBA/NHL) and Dignity Health Sports Park (MLS) were not associated with
8
Wembley Stadium (£900 million) was largely privately funded (£600 million), with public contributions from the Na-
tional Lottery (£120 million), Department of Culture, Media, and Sport (£20 million) and the London Development
Agency (£21 million), while Emirates Stadium (£390 million) was privately funded (Conn 2018).
25

increased recovery time; however, property located close to Dodger Stadium (MLB) recovered
more quickly to pre-recession assessed values than property located further away. This finding
appears curious, because Dodger Stadium, which opened in 1962, like many older stadiums, is
surrounded by parking lots. This result contradicts the assertions of stadium-anchored economic
development proponents who frequently argue that a “moat of parking lost” discourages positive
local development externalities (Nelson 2001a). Propheter posits that the lack of integration into
the neighborhood may instead provide the unseen benefit of insulating the community from negative
externalities from the stadium (Section 6).
Bradbury (2022a) employs the synthetic control method to estimate the effect of the intra-
metropolitan-area relocation of Atlanta’s MLB team on local property assessments in its new host
Cobb County. Comparisons indicate Cobb’s post-stadium property value growth was not extraor-
dinary among metro-Atlanta counties following the stadium-development’s announcement in 2013
or opening in 2017, which are not indicative of the stadium generating positive spillover effects to
residents and businesses.
5.3. Voter preferences. Evidence of important intangible benefits may also be discovered through
the democratic process, as stadium subsidy projects often must be approved by voter referenda.
Voting permits residents to reveal preferences for stadium benefits and costs that are not captured
in markets for sports consumption. In addition, patterns in the spatial distribution of votes provides
information as to how the community perceives and values any proximity-related intangible benefits.
Of course, referendum voting has a well-known problem: the setting of reversion levels in
votes that generally leads to passage of the referendum. Fort (1999) highlights the importance of this
in the case of referenda on stadium subsidies. Consequently, while some direct-democracy stadium
initiatives fail, most succeed, which may reflect a local willingness-to-pay for sports activities (Brown
and Paul 2002) or strategic setting of the referendum reversion level.
Coates and Humphreys (2006) analyzes voting patterns for stadium initiatives in Green Bay,
Wisconsin (NFL, 2000) and Houston, Texas (NBA, 1999 and 2000), finding a positive association
between voter proximity to the facility in Green Bay and support for a subsidy for renovation of a
stadium but no relationship in Houston. This pattern in the results suggests that residents most
likely to experience venue spillovers were more willing to fund the cost of projects, consistent with
sub-local agglomeration effects being positively associated with proximity to the facility.
26

Dehring et al. (2008) uses a 2004 Arlington, Texas football stadium funding referendum
to host the NFL’s Dallas Cowboys—which was approved by 55 percent of voters—to test the
“homevoter hypothesis” (Fishel 2001) that homeowners tend to support/oppose public projects
that they perceive will increase/decrease their homes’ value. The authors use a hedonic price model
to estimate the impact of stadium-related announcements on city home prices and then examine
how precinct-level vote results relate to housing-price effects from the announcements. The authors
find referendum support was positively associated with property values and that homeowners were
less likely to support the referendum.
However, the relationship between facility proximity and political support is likely more
complex than a simple monotonic rate of decay in support with distance. Ahlfeldt and Maennig
(2012) observes voting for Allianz Arena (host to FC Bayern Munich), for which Munich, Germany
residents considered the question of providing e107 million public funding to support transportation
links for a new soccer stadium in 2001. The authors identify a NIMBY (“not in my back yard”)
effect, that though voters supported the new stadium in the city, they preferred stadium sites that
were not in immediate proximity to their homes. The finding is consistent with positive metro-area
amenities and negative disamenities in host neighborhoods.
Horn et al. (2015) similarly identifies NIMBY preferences for hosting sports teams in a
1997 Seattle, Washington referendum in support of a new NFL/MLS stadium. Support for the
stadium was weakest in close proximity to the stadium site, and strongest within short driving
distance from the stadium. The results are consistent with a Goldilocks zone, where residents who
experience convenience in commuting without the disamenities of hosting games value the stadium
the most among area residents. Johnson and Hall (2019) found no evidence that voters living close
to a proposed new NFL stadium in downtown San Diego were more likely to vote in favor of a
construction subsidy in a 2016 referendum.
5.4. Consumer surplus estimates. Finally, two relatively old papers estimate the consumer sur-
plus generated by the presence of teams in cities based on observed game ticket prices. Monopoly
teams cannot fully capture consumer willingness to pay to attend games, and the remaining con-
sumer surplus reflects the willingness to pay to attend games by fans and, under certain conditions,
the value of public goods benefits generated by sports teams. Since teams cannot fully capture
this fan willingness to pay, teams may not be willing to enter markets with substantial consumer
27

surplus, providing a reason to subsidize teams. Consumer surplus can be estimated using ticket
price and attendance data. Consumer surplus reflects both intangible values and use values.
Irani (1997) estimates consumer surplus associated with attending MLB games over the
period 1972 to 1991 by fitting a linear demand curve based on a fixed effects regression model.
Irani (1997) reports large estimates of annual consumer surplus, ranging from $2.2 million per year
(in 1982 dollars, about $6 million in 2022 dollars) in Cleveland to $54 million dollars per year
($145 million per year in 2022 dollars) in Los Angeles. Alexander et al. (2000) calculate estimates
of consumer surplus from attending games played in the four major US sports leagues based on
financial data on gate revenues and assumed price elasticities of demand in 1996. Alexander et al.
(2000) report substantially lower estimates of annual consumer surplus based on game attendance,
ranging from $5 million per year in Milwaukee for MLB games (in 1996 dollars, about $9 million
per year in 2022) to $40 million per year for MLB games in Atlanta (about $73 million per year in
2022). Both studies report substantial estimates of consumer surplus.
Interestingly, research estimating consumer surplus generated by attending professional
sports games completely dried up after the paper by Alexander et al. (2000). The presence of
better ticket price data and improved econometric methods in the last 20 years makes the lack of
any additional research on this topic difficult to understand. The relatively large consumer surplus
estimates reported in these papers makes this a potentially important piece of information for
assessing the justifications for public subsidies for new sports facility construction projects.
Both papers have notable empirical limitations. Irani (1997) estimates a linear demand
curve, almost certainly an inappropriate model specification. And the price-quantity relationship
is the textbook example of an empirical model suffering from endogeneity problems. Irani (1997)
makes no attempt to correct for the endogeneity of prices in the regression model. Alexander et al.
(2000) undertake a rudimentary analysis using only gate revenue data from a single season, 1996.
Alexander et al. (2000) do not estimate a demand curve; instead, they calculate consumer surplus
estimates based on different assumed values of the price elasticity of ticket demand. While the
results in these papers are suggestive of the possibility that substantial consumer surplus, and thus
public good values, exists in these markets, the limitations in the empirical analysis makes thee use
of these estimates to assess subsidies speculative at best, and wildly inappropriate at worst.
5.5. Summary of intangible benefits. Economists have identified intangible benefits from sta-
diums hosting professional sports teams using several empirical methods, a notable accomplishment
28

considering the well-known obstacles to quantifying unobservables. The presence of non-pecuniary
social benefits is not surprising given the nature of professional sports. However, we know much
less about the magnitude of value of these benefits, which represents important information for
policy guidance. CVM surveys identify positive effects; however, the benefits tend to be well-below
subsidy levels provided for new sports facilities. The search for intangible amenity and disamenity
effects in property values has produced mixed findings. Though some studies identify positive ef-
fects, the capitalized improvements generally are not large enough to justify the subsidies received
and some research reports negative impacts of sports facilities on property values. Stronger positive
effects have been observed for projects that had limited tax consequences.
Voters tend to support stadium subsidies in referendums, and support appears to increase
with proximity to the venue; but voters appear to prefer not to be too close to facilities. Majority
preferences do not necessarily equal efficiency. Though referendums may be the best public policy
tool for collective decision-making regarding stadium subsidies, ignoring minority preferences, ra-
tional ignorance, and strategic proposition presentation can undermine market failure corrections
through direct democracy. Some relatively old, empirically dubious evidence exists suggesting that
attendance at professional sports games generates substantial consumer surplus.
In sum, empirical evidence from peer-reviewed research indicates that individuals do value
sports teams and venues beyond their economic development contributions, which may justify a
positive level of subsidies even if tangible benefits are not expected. However, the total social
benefits tend to be far less than typical subsidies provided for new facility construction projects.
The value of intangible benefits alone appear unlikely to justify the ongoing level of subsidization
for new sports facility construction projects.
6. Negative externalities from disamenities
While most debates about sports-driven economic development focus on direct economic
impacts and potential positive spillovers, research also identifies considerable negative effects in
cities hosting sports events. Estimates of small, limited positive effects appear in the literature and
frequently come up in the public debate on subsidies. Hosting games generates nuisances as well
as potential benefits. The substantial and robust evidence of negative effects almost never appears
in these policy debates. Gameday activities can benefit some nearby businesses and residents,
but may also generate disamenities for others. The influx of consumers on game day also brings
29

unwanted crowding, congestion, and crime. These costs must be weighed against any benefits in
welfare assessments.
Negative externalities consist of the typical urban congestion externalities. These include
increased crime, increased traffic, and negative health impacts generated by close proximity for
fans in and around facilities on game day. In addition, some evidence suggests increases in air
pollution generated by game day traffic and increased airborne particulate matter during facility
construction projects that has negative health consequences for residents.
6.1. Crime. Crime is the most extensively studied and documented negative externality gener-
ated by hosting games. Sports are associated with aggressive fan behavior, frequently combined
with alcohol consumption that may catalyze criminal conduct. Marie (2016) develops a conceptual
framework identifying three main channels through which sports may impact crime: the concen-
tration of hostile fans, in which fans gather to become targets of or commit crimes; displacement of
police to monitor game day events and maintain order and safety; and incapacitation of potential
criminals who attend or watch games rather than commit crimes. Using crime data from London
boroughs that hosted soccer matches in the mid-1990s, Marie (2016) identifies increases in property
crimes in boroughs hosting matches. Crime in boroughs home to travelling teams falls during away
matches. This combination of effects highlights the role of displacement of police and incapacita-
tion of criminals on crime in communities. In total, the findings indicate hosting games appears to
increase property crime against local residents.
The positive association between crime and sporting events is perhaps the most robust
empirical finding in the economic effects of sports literature.9 Using a variety of empirical methods,
economists clearly identify positive relationships between hosting sports games and crimes in many
settings. We briefly discuss several prominent studies in this literature to summarize consensus
findings. Researchers identified a positive relationship between hosting sports events and crime for
games played by MLB teams (Mares and Blackburn 2019; Pyun 2019), NBA and college basketball
teams (Yu et al. 2016), NFL teams (Kalist and Lee 2016), NHL teams (Block 2021), college football
teams (Rees and Schnepel 2009), English soccer clubs (Marie 2016), and Spanish soccer clubs
(Montolio and Planells-Struse 2016, 2019). Propheter (2020a) finds larger displacement effects in
9
Baumann et al. (2012) is an exception that finds no impact of sports teams on annual MSA crime rates, but there is
little expectation that the presence of teams should affect city-wide crime rates over the course of a year, especially
if sports events reallocate crime within the region.
30

downtown areas than in the suburbs during NBA games, indicating that crime impacts differ by
neighborhood characteristics.
The crime costs generated by hosting sports games are not trivial, either. Using existing
cost-of-crime estimates (Cohen 2005), regular season costs of sports-related crimes have been es-
timated at $700,000 for NFL games (Kalist and Lee 2016) and between $1.2 million (Mares and
Blackburn 2019) and $30 million (Pyun 2019) for MLB games. These estimates ranges for costs
are somewhat speculative, but crime is unarguably a substantial local disamenity that neighbor-
hood residents and businesses want to avoid. Negative externalities from hosting sports events are
obvious, and thus it is understandable why residents hold NIMBY preferences for sports venues,
even if they value having a stadium in the metro area (see Section 5.3).
The clear positive relationship between sporting events an crime also implies increases in
policing costs. Humphreys et al. (in press) analyze the impact of sports-related crime on police
spending using data from the Annual Survey of Public Employment & Payroll survey over the
periods 1979-1995 and 1997-2010 for US municipalities with and without professional sports teams.
Their results show that police employment increases with the arrival and departure of an NFL team
in a city as well as with the number of postseason games played in MLB. Employment increases
range from about 2% to 6% depending on sport and model specification.
6.2. Health, traffic, and pollution. A less obvious spillover from hosting sports games is pol-
lution from congestion when residents travel to games, which contributes to road traffic and air
pollution. Congested roads inflict time costs and may be a detriment to public health, particularly
for residents with respiratory ailments. Humphreys and Pyun (2018) examines the impact of MLB
game attendance on time spent in traffic, and finds a positive effect. The estimates indicate that
an MSA with average MLB attendance experiences approximately five million additional miles
traveled—which represents just over half-of-one percent of total vehicle-miles traveled—and 28,000
hours per year in delayed traffic. Using air emissions cost of congestion (Mashayekh et al. 2011),
this translates to $7 million per year in social costs from added CO2 emissions.
Locke (2019) analyzes variation in the daily average concentrations and air quality indices
for several common atmospheric pollutants, and identifies a small negative impact of games on air
quality. However, though the estimate is statistically significant, the magnitude of the relationship
is so small that the damage has little practical significance. Humphreys and Ruseski (2019) identify
effects from new stadium construction on infant birth weights. Estimates indicate that between
31

50 and 4,000 additional low birth weight newborns attributable to increased airborne particulate
matter from stadium construction projects in their county of birth.
Stoecker et al. (2016) examines the impact of sports-related social gatherings on disease
transmission, analyzing county-level influenza mortality in cites home to NFL teams. The authors
find large robust impacts of local team Super Bowl participation on influenza mortality among
elderly adults, which increased by 18 percent, and may be explained by game-related gatherings
or travel. However, the authors do not identify any effect from hosting the Super Bowl, which
suggests that attracting out-of-town spectators does not play a strong role in disease transmission.
Cardazzi et al. (2020) similarly analyzes the effect of cities acquiring new professional sports teams
on weekly influenza spread, finding increased influenza mortality of between four and 24 percent in
cities that gained new professional sports teams, relative to cities with no teams.
6.3. Summary of negative externalities. Researcher reveals strong evidence of negative spillovers
in cities that host sports events. In particular, hosting games is associated with increased criminal
activity, which may generate considerable costs to area residents and businesses. Other nuisance
externalities from congestion, pollution, and public health have also been identified as potential
harmful byproducts of sports games. These externalities also imply substantial negative external
costs. Policy discussions about the appropriateness of subsidies for new professional sports facil-
ities should include the potential costs and consequences of negative externalities generated by
professional sports, and not focus solely on positive direct and indirect impacts.
7. Anti-consensus arguments
Though most research in this literature does not support the contention that hosting sports
teams generates large economic impacts on local communities, some important exceptions should
must be acknowledged. Skeptics of the consensus in economic research documented above frequently
argue that economic outcomes typically used to quantify the impact of sports do not fully capture
important holistic, difficult to measure benefits. If stadiums provide unique physical capital that
promotes a healthy downtown, for example business and/or entertainment districts, this also may
strengthen the commercial and social reputations of host communities, a potentially important but
difficult to quantify outcome. The main idea behind these criticisms posits that research focused on
common quantifiable economic outcomes (e.g., income, employment, and output) does not capture
theses other benefits. Important, undetected long-run development effects generated by professional
32

sports may exist. Critics also argue that idiosyncratic location-specific factors makes comparisons
across locations difficult.
Chema (1996) argues that early findings in Baade (1996) of limited economic impacts from
sports teams and venues cannot be applied to modern stadiums, because the sample analyzed
by Baade (1996) contains many older, non-urban, multipurpose sports facilities which were not
designed to be integrated into the surrounding community as part of an urban development strategy.
Santo (2005) similarly questions the findings reported in early studies as outdated and advocates the
approach used in Baade and Dye (1990) which analyzes a larger sample of MSAs that lost or gained
teams from the mid-1980s to the 2000s. Baade and Dye (1990) reports mixed results, identifying
positive impacts from new baseball stadiums on aggregate MSA level income and on MSA income
as a share of regional income. But Baade and Dye (1990) also find a negative relationship between
baseball teams and aggregate MSA income. While this extended sample may be defensible, the
outdated empirical strategy used by Santo cannot be easily defended.
The most impressive feature of findings in the early literature is not the results in any one
study—most are not notably rigorous—but rather that a large number of studies using different
approaches and data generally reach the same conclusion. Baade and Dye (1990) is not an ex-
emplary study that should serve as a guide for empirical analysis in performed in 2005. Santo’s
concerns have since been refuted by subsequent research on modern stadiums discussed above.
Nelson (2001a) argues that previous research using MSA-level data may not properly cap-
ture stadium impacts without taking into account the specific location of sports facilities within
an MSA. He posits that downtown facilities likely generate more spillover spending than isolated
suburban facilities, which may discourage nearby economic development. In response, he analyzes
MSA’s share of state income per capita in all MSAs home to at least one major-league team from
1969 to 1994 and accounts for the location of facilities within metro areas with indicator variables.
The estimates identify positive associations between income share and centrally-located major-
league teams. Nelson suggests that previously reported negative findings may reflect the impact of
suburban stadium locations, rather than the presence of teams. However, Wassmer (2001) makes
a compelling case that Nelson (2001a) may have the causality reversed in that stadiums locate
in central business districts when they contain robust economic activity. Wassmer (2001) also ar-
gues that the coefficient estimates reported by Nelson (2001a) likely suffer from omitted variable
33

bias. Nelson (2001b) concurs that further study with the suggested improved methods are needed.
Subsequent studies have not supported his central business district hypothesis.
Urban studies scholar Mark Rosentraub, an early critic of stadium-led economic develop-
ment (Rosentraub 1997), later became a prominent skeptic of the economic consensus regarding
the inefficacy of sports-focused economic development. In the 2000s, Rosentraub published a series
of papers, often with coauthors, in which he argues that, while economic benefits may be difficult
to quantify in standard economic outcome variables, stadiums ultimately benefit host communities
economically, and thus the economic consensus on the inefficacy of sports-focused development is
mistaken.
Like Nelson (2001a), Austrian and Rosentraub (2002) posits that the direct impact of sports
on economic activity may be irrelevant if the goal of subsidizing a new stadium is revitalization
or enhancement of a city’s downtown core. The economic relationship between central business
districts and suburbs may be integrated, with the health of the outer regions dependent on the
city’s urban core. Using the experience in two cities with sports-focused downtown development
strategies (Cleveland and Indianapolis) and two cities that did not pursue such policies (Cincinnati
and Columbus), the authors identify some gains in higher paying service sector jobs in tourism
and creation of excitement in downtowns generated by sports-centric economic development poli-
cies. However, the basic descriptive comparisons allow for multiple interpretations, fail to carefully
address causality, and lack sufficient rigor to inform policy. For example, a competing qualitative
analysis by Delaney and Eckstein (2003b) describes Cincinnati as having a powerful local growth
coalition advocating for sports-focused development, diametrically opposed to the assertion by
Austrian and Rosentraub (2002). Chapin (2004) also finds evidence of a successful sports-focused
economic development program in a quantitative analysis using data from Cleveland.
Rosentraub (2006) argues that findings of positive nonuse value of sports (Carlino and
Coulson 2006; Swindell et al. 2008), reassessments including newer facilities (Santo 2005), and
the importance of downtown central business districts to metropolitan areas (Nelson 2001a; Aus-
trian and Rosentraub 2002) all support the use of public subsidies to build new sports facilities.
Rosentraub further expounds on his optimism in a book-length treatment on the topic, in which
he argues that academic economists studying sports faculties fundamentally misunderstand the
broader long-term economic development impacts of sports-anchored development. He asserts that
sports venues represent important financial and civic assets, which stadium development advocates
34

properly understand. He states, “mayors and community leaders . . . ‘got it’ and understood what
needed to be done long before many academicians gave them credit” (Rosentraub 2009, p. xiv).
He also argues that downtown amenities fostered by sports, arts, and culture contribute
to the attractiveness of a region, and thus produce a healthy city that attracts new residents. If
used properly, he argues, sports represent an important tool that promotes urban revitalization and
relocation of economic activity to desirable areas. In a recent paper, Arif et al. (in press) report
no evidence supporting the idea that new sports facilities increase migration into US MSAs using
a large data set of inter-city migration flows over the period 1991-2014.
For example, he writes: “As investments, the tax dollars expended for venues have generated
positive net financial returns. Cities can and do win in the sense that the financial returns the public
sector receives are more than the funds expended” (Rosentraub 2014, p. xv).10 These contentions
rest on descriptive case studies of six US cities, largely focusing on changes in aggregate economic
and demographic metrics without accounting for confounding variables or counterfactual outcomes
employed by most economic research in this literature.
Identifying credible conditional correlations requires, at the minimum, properly accounting
for the presence of confounding factors. Credible causal inference requires even more attention
and methodological rigor. Descriptive case studies are open to subjective interpretation, and to be
credible they must be compared to a reasonable counterfactual outcome and not just document ob-
served improvements. For example, in the case of San Diego’s MLB Petco Park development project
(a project Rosentraub served as a paid consultant on), Rosentraub rosily concludes “San Diego’s
leadership not only created a new model for other cities to follow when dealing with professional
sports teams, but it also secured its development goals” (p.164, also see Cantor and Rosentraub
2012).
However, Erie et al. (2010) offers a alternative critical assessment of the Petco Park project,
concluding that the ballpark project represents a “net drain” on the city’s finances, which largely
benefitted the Padres’ team owner John Moores, who “took advantage of public subsidies and East
Village development rights to emerge as a powerful real estate mogul,” while “San Diego taxpayers,
the intended beneficiaries of the [public-private partnership], have been left to absorb the fiscal
fallout” (p. 670). Furthermore, subsequent rigorous empirical case studies described by Erie et al.
10Rosentraub’s book was originally published in 2009, and it was significantly revised and published under a new
title in 2014.
35

(2010) do not support the claim that sports venues foster an atmosphere that promotes commerce
and raise tax revenue to levels that would justify the subsidies received.
Most recently, Jakar and Rosentraub (2021) acknowledge that, while most research con-
cludes that the return on stadium investments insufficient to cover the subsidies provided, the wel-
fare economics framework employed by economists to assess outcomes generated by sports venue
investments contains substantial flaws. Instead, Jakar and Rosentraub (2021) argue that researchers
should assess the success of development policy using a “municipal capitalism” framework. Devel-
oped by Chapin (2002), municipal capitalism describes competition among entrepreneurial cities
in which “the public sector pursues profits on behalf of the private sector, with indirect benefits
accruing to the public sector” (p. 567). The public sector plays the lead role by providing in-
vestments and continued guidance for local redevelopment in local public-private partnerships to
promote regional economic activity and generate important intangible outcomes.
While this alternative approach may offer some new insight as to why local business-
focused coalitions consistently advocate for sports-anchored economic development projects (see
Section 8.4), it does not represent a normative policy framework for evaluating social welfare. The
assumption that certain local constituencies pursue business-focused entrepreneurial goals is not an
appropriate basis for assessing the overall desirability of sports venues. Note that this represents a
distinct departure from his earlier contention in Rosentraub (2014): “If there are no real economic
benefits or financial returns for a city that hosts a professional sports team, then there is no reason
for the public sector to invest in a venue” (p. 20).
Subsidy proponents frequently cite Rosentraub’s contentions as an important skeptical
counterbalance to the consensus findings of academic researchers. Real estate developers, team
owners, and local officials intent on subsidizing new professional sports facilities clearly embrace
Rosentraub’s ideas and frequently employ him as a consultant on sports-led economic development
projects. However, very little credible empirical evidence supporting his claims exists, which per-
haps explains why his arguments have not proved to be convincing or influential in the research
literature.
If a credible case for public subsidization of professional sports facilities exists in the re-
search literature, it must be made using evidence on the value of quality-of-life spillovers valued
through CVM studies, estimates of consumer surplus, increases in property values, and inferred
from patterns of voting, as discussed in Section 5. The total estimated value of these intangible
36

benefits across a metropolitan area or region could amount to a relatively large sum, even when
compared to the typical subsidy provided for new sports facility construction projects.
However, most of these areas of research contain mixed results. The literature on the
impact of sports facilities on nearby property values contains no consensus, and some evidence
shows property values increase when teams leave an area. While potentially important, the quality
and quantity of existing evidence valuing consumer surplus remains poor and dated. Research
on referendum voting on sports subsidies also fails to reach a consensus. Furthermore, research
identifying positive values associated with intangibles uniformly reports estimated values far below
the actual or projected subsidies provided. The case for economic development benefits extending
beyond the area immediately surrounding sports stadiums and arenas is tenuous, at best and
tangible proximity benefits appear to be small and limited to select complementary industries. No
evidence supporting hypothesized long-term positive returns from sports facilities in downtown and
metropolitan economies exists. Taken together, the evidence from this large body of research fails
to support the existence of a strong, generalizable justification for subsidies.
8. The public funding paradox
After decades of study, clear and unambiguous evidence shows that sports stadiums and
arenas do not generate strong economic development benefits on host communities. The contrast
between the strong consensus null or negative findings of sports venues on local economies in peer
reviewed academic research coupled with the continued and growing public subsidization of these
facilities creates a seeming paradox: If sports stadiums are not potent drivers of local economic
activity, then why do federal, state, and local governments continue to subsidize sports venues in
economic development projects?
Politicians clearly appear to be more amenable to subsidizing professional sports than other
businesses, as the public contribution to sports stadiums and arenas is large relative to other
business incentives. Bartik (2019) reports that the average business incentive provided by US state
and local governments is equivalent to subsidizing three percent of a firm’s wages for 20 years (p.
11). By comparison, the $300 million subsidy to fund Truist Park as the home of the Atlanta Braves
in 2017, a typical example among modern sports facility subsidies, represents approximately eleven
37

percent of the team’s observed and expected post-new-stadium player salaries over the next 20
years.11
Economists have made limited progress understanding why stadium subsidies remain preva-
lent and persistent components of local economic development policies. Some research in economics,
political science, and sociology provide theories explaining professional sport teams continuing suc-
cess in getting subsidies approved in local democracies, even when the economic evidence is not
supportive of the claim that important tangible economic benefits will be generated. We discuss
several potential explanations in this section.
8.1. Concentrated benefits and dispersed costs. A common political economy explanation
for the prevalence of venue subsidies is the asymmetric bargaining power among interest group con-
stituencies. When subsidy benefits are distributed among a few interested parties, but the tax costs
are dispersed widely across an entire polity, the former has a bargaining advantage that will likely
yield more favorable political outcomes. The beneficiaries of sports subsidies are heavily concen-
trated: team owners and proprietors of few complementary activities (e.g., hospitality, recreation,
client development, etc.) reap much of the benefits from the hundreds of millions of dollars in venue
subsidies. Public funding is spread among a jurisdiction’s taxpayers, with each taxpayer bearing a
small share of the tax burden.
Even though stadium subsidies may lower the welfare of the average resident, the cost is
shared so broadly that individual costs may be small enough (e.g., Baltimore’s Camden Yards
annual tax cost amounted to $15 per local household (Hamilton and Kahn 1997)) that it is not
worthwhile for voters to organize opposition. In this case, the small group of beneficiaries devote
greater resources to promoting stadium subsidies through lobbying and public relations campaigns
than the opposition. In addition, residents who value sports teams tend to have strong preferences
in favor subsidizing local teams, which enhances the organizational power of pro-stadium voter
constituencies (Groothuis et al. 2004). sports facility subsidies may be a foregone conclusion based
on rational political incentives faced by both voters and organized interests.
Though a rational ignorance/submission explanation provides intuitive appeal, it is not suf-
ficient to explain why stadium subsidies persist and grow. Perhaps this explanation was appealing
prior to the 2000s, when the academic consensus was less apparent and research results were not
11Estimated based on reported team payroll from 2017 to 2021, assuming the same average annual increase in payroll
(1.5 percent) over the next 15 years.
38

known or accessible to the general public. The economic impotence of sports stadiums is now
widely acknowledged in public policy debates on subsidies. Though not always the case, media
outlets routinely include commentary from academic experts and report their informed skepticism
when covering stadium subsidy proposals. Information is spread cheaply and quickly through social
media, which can easily be incorporated into opposition campaigns that draw on national political
organizations to help counter advocacy campaigns at low cost.12
Taxpayer funded subsidy costs have risen to non-trivial levels that appear to be large enough
to justify organizing and funding credible opposition campaigns. For example, Arlington, Texas’s
Globe Life Field, which opened in 2020 as home to MLB’s Texas Rangers, received $500 million in
public funding to replace an existing stadium that was less than 25 years old. The public funding
translates to a considerable annual tax burden, $123 per household. Though Arlington stadium
proponents received substantially more funding than the opposition, $1.4 million to $7,500, total
outlays for both sides were quite small, especially relative to the stakes (Formby 2016). In this
case, public stadium financing was approved by 60 percent of votes cast in a referendum, and
Arlington Mayor Jeff Williams, who was a strong stadium advocate, was twice reelected after
the project was approved. The subsidy proposal had strong support from the city’s business and
political establishments, which has been identified as a key component to success in acquiring public
funding for economic development projects (discussed in Section 8.4.
In total, growing evidence verifying sports venues’ limited economic impacts, falling costs
of disseminating information and organizing political opposition, and continued public support for
government funding indicate that sports facility subsidies are not a pure product of financial de-
terminism from the bargaining asymmetry of political interests. Instead, voters have been willing
to tolerate large fiscal burdens to fund construction of increasingly expensive venues. The stan-
dard political economy model of concentrated benefits and dispersed costs appears inadequate for
explaining the continued prevalence of stadium subsidies.
8.2. Bargaining, outside options, and loss aversion. Humphreys and Zhou (2015a) approach
the sports facility subsidy issue as a bargaining process between team owners and local officials
acting on behalf of taxpayers. While not a formal bargaining process like the collective bargaining
12For example, billionaire Richard Scaife played a significant role in organizing “one of the most effective opposition
campaigns” for a stadium initiative in Pittsburgh (Delaney and Eckstein 2003b, p. 199), and he also donated to
many prominent conservative and libertarian advocacy groups that frequently oppose stadium subsidies around
the US.
39

occurring between unions and employees, the process determining the size of subsidies for new
sports facilities resembles bargaining in many important ways. The two sides put forth competing
proposals, threats sometimes occur, and in the end some specific outcome, in terms of a “facility
deal,” emerges from the process, except in cases where no deal can be reached and the team leaves
for another city. Humphreys and Zhou (2015a) develop a formal Nash bargaining model that
emphasizes the importance of outside options for the team, in terms of other cities eager to host a
professional sports team and willing to provide a subsidy for a new stadium or arena. The model
predicts that the better the team’s outside option, the larger the subsidy the team can extract from
its current host city in this bargaining process.
Humphreys and Zhou extend this model to include sports fans with reference-dependent
loss-averse preferences to the subsidy bargaining process. In this version of the model fans have
“gain-loss” utility for sports consumption, which reflect a desire to avoiding experiencing loses,
including the loss of the local team to relocation. These preferences are likely applicable to how
local residents view their local teams. Teams exploit local resident’s loss aversion with threats of
relocation to competing markets and replacing lost franchises with expansion clubs. This allows
owners to extract even larger subsidies from taxpayers who highly value hosting a team in their
city compared to the subsidies extracted from cities with fans with standard preferences.
The value of the outside option for teams bargaining with cities over subsidies depends
on the characteristics of cities with no existing teams interested in attracting a team. In the
US, professional sports leagues enjoy either explicit exemptions, in the case of MLB, or implicit
exemptions, in the form of antitrust regulators generally uninterested in pursuing cases, from federal
antitrust laws. This gives leagues control over the number and location of its teams. Leagues
clearly use this power to provide owners with prime outside options when negotiating with cities
over subsidies. For example, Los Angeles, the second largest media market in the US, had no NFL
team for a 20-year period (1995 –2016).
Los Angeles clearly represented a substantial outside option for teams in the bargaining
process and team owners repeatedly used this to their advantage. A simple web search reveals 17
separate occasions over this period when an NFL team owner threatened to move to Los Angeles,
some teams on multiple occasions. Absent this special treatment under antitrust law, for example
under some form of free entry into the NFL market, a new team would have located in Los Angeles
shortly after the Rams left for St. Louis in 1995.
40

Leagues still employ this strategy. San Antonio, Portland, and Sacramento all currently
host only NBA teams and have about 2.5 million residents. All three are larger than cities that
currently host multiple teams, including Pittsburgh (NFL, NHL, MLB), Cincinnati (NFL, MLB),
Kansas City (NFL, MLB), and Nashville (NFL, NHL). Virginia Beach, VA and Providence, RI,
population 1.8 million and 1.6 million respectively, currently host no teams yet the population
in both exceeds other cities currently supporting teams, including Jacksonville (NFL), Milwaukee
(NBA, MLB), and New Orleans (NFL, NBA). Both these cities have more than half a million more
residents than Buffalo, currently home to an NFL and NHL team. Many cities with no teams, or
only one, could likely support one or two additional teams.
Teams frequently exploit outside options and loss aversion to enhance subsidies. Leagues
control the number of teams and expand infrequently. The allocation of teams across cities suggests
strategic behavior by leagues to maintain substantial outside options for teams. Antitrust regulators
and Congress show little interest in conducting oversight of de facto monopoly sports leagues. This
appears to be an important reason for continuing sports facility subsidization that will persist as a
consequence of policy decisions at the federal level.
Though sports franchises frequently use relocation threats to garner large public subsidies,
many incumbent teams extract subsidies without relocation threats, which indicates the importance
of other relevant factors. For example, in 2017, the NFL’s Atlanta Falcons extracted $700 million in
subsides to construct Mercedes-Benz Stadium as a replacement for the fully functional 25-year-old
Georgia Dome on an adjacent plot of land. This mirrors the outcome for MLB’s Texas Rangers’s
stadium replacement in Arlington, discussed above (Tucker 2016).
8.3. High-profile advocacy reports. A common counterargument used against the consensus
findings on the inefficacy of sports stadiums in promoting economic development involves commis-
sion of a private consulting study to generate favorable findings in terms of forecasted economic
benefits. Stadium boosters often hire consultants to conduct economic or fiscal impact analyses
that demonstrate the proposed sports development will generate large returns to the community
through increased economic activity, creating jobs and wealth in the community while growing the
tax base to pay for itself through increased tax collections. These reports are part of what Coates
and Humphreys (2008) describe as a “promotional literature.” These reports are often released
at the same time the stadium project is announced, because economic development justifications
are persuasive in fostering favorable public perceptions of sports facility subsidies (Connolly and
41

Touchton 2020). Delaney and Eckstein (2008) provide examples of how local media outlets often
present advocacy studies uncritically or provide false balance to more credible academic studies,
which can influence public perceptions.
Instead of providing credible analysis of the potential impact of a proposed new facility
project, commissioned reports represent tools of sophistry, intended to create false balance to
counter the academic consensus as a viable alternative outcome. Crompton (1995) and Hudson
(2001) survey for-hire private impact studies and detail their myriad problems, which persist even
though these faults are well-known. Consultant reports frequently claim to document large tangible
improvements in economic well-being in terms of jobs and business activity that will more than
cover the costs of subsidies by understating costs and inflating benefits flowing from the proposed
project.
A common error committed in these reports is to report gross spending estimates that do not
account for crowding out of existing local economic spending and assume that all sports-related
commerce is net-new economic activity. For example, a previously vacant parcel of land might
be viewed as a bustling revitalized commercial hub, without noting that much of the spending
at this new commercial hub was reallocated from other local businesses. The returns are often
further inflated using fantastical job and income multipliers, which supposedly capture development
spillovers in the local economy, using black-box proprietary regional input-output software and
models (e.g., IMPLAN, REMI) typically not employed by academic researchers. Using information
from commissioned studies for several Super Bowls, Porter (1999) demonstrates how input-output
models are inappropriate for this task, because the empirical methods do not account for displaced
economic activity from hosting sports events that counteract any increases in economic activity
rather than induce the ripple effects assumed by multipliers.
Siegfried and Zimbalist (2002) notes that estimated impacts of sports teams based on stan-
dard local expansion multipliers are likely exaggerated. Sports teams import a much higher pro-
portion of labor than most industries, which results in higher than usual revenue leakage from
the community. Only 29 percent of NBA players reside in their host region, a figure well below
the standard estimate that 93 percent of people live and work in the same metropolitan area. A
smaller share of revenues passed to players through wages is likely to be retained in the region than
spending by employees in other industries.
42

These and other basic errors in advocacy reports persist because, unlike academic research,
the analyses are not subjected to peer review by disinterested subject experts. However, the biased
estimates in these reports are a feature, not a bug, because objective assessment is not their goal.
Commissioned economic impact reports are intended to justify proposed funding for a new sports
facility projects until they gain formal approval. After that, these reports disappear. Ex-post re-
evaluations never take place, because the ex-ante projection served its purpose of securing project
approval.
These commissioned reports are likely effective at counteracting the economic consensus
because their audience lacks the expertise to differentiate between credible and non-credible analy-
ses. Local taxpayers often accept the findings in promotional reports at face value, or at minimum
they generate substantial skepticism about reported findings in the academic literature. Most lo-
cal residents are not familiar with economic studies and fail to differentiate between findings in
peer-reviewed studies and promotional advocacy reports provided by stadium boosters.
Advocacy reports may placate decision-makers, leaders, and voters engaged in motivated
reasoning to justify a stadium project that they find antecedently attractive (Rogers 2020). Sta-
dium advocates often emphasize that the promotional analysis is specific to their particular stadium,
which accounts for deficiencies in existing research that fail to capture nuances of the project, ren-
dering them inapplicable. “This one will be different” is a common rebuttal from stadium boosters.
Such reports are often released as part of a professional public relations campaign that pitches stories
to media members. The reports are often accompanied by press releases that include concise sum-
maries of findings and quotes designed to be included in news articles, which are then repeated by
politicians, community leaders, and other media outlets. Given that the economic concepts involved
in economic impact assessments are complicated, it is understandable why privately-commissioned
economic impact reports may be effective at neutralizing existing findings, which likely explains
their ubiquity in stadium advocacy campaigns.
Wassmer et al. (2016) posits that these studies may be effective at presenting overly opti-
mistic projections of positive impacts because there are no methodological or reporting standards
to follow, yielding bloated impact forecasts. As a potential remedy, Wassmer et al. (2016) provide a
list of 20 questions for evaluating commissioned economic impact reports to assess their reliability
in order to avoid common mistakes. For example, “[d]emanding a more realistic economic impact
43

study is perhaps the most important way” to affect public policy debates on venue subsidies (p.
261).
8.4. Local growth coalitions and the media. Research by sociologists Kevin Delaney and
Rick Eckstein highlights the importance of influential local insiders in promoting stadium subsidies.
Using in-depth interviews with local officials in nine cities seeking stadium subsidies during the 1990s
and 2000s, Delaney and Eckstein (2003b) observe that sports teams typically did not lead the public
fight for the subsidies they received.13 This observation is not consistent with the concentrated
benefits and dispersed costs hypothesis, because the chief beneficiary of these subsidies are team
owners. The interviews reveal the importance of “local growth coalitions” in successfully garnering
stadium subsidies. Sociologist Jay Scherer similarly identifies the importance of a “boosterish”
local coalition in overcoming opposition to a subsidy for a new NHL arena in Edmonton, Alberta
in the early 2010s (Scherer 2016).
Delaney and Eckstein find local growth coalitions tend to derive from a pre-existing institu-
tional alliance between the local corporate community and local government, which is largely run by
business leaders (e.g., chambers of commerce and groups of local CEOs), but it may include other
community members, such as politicians, government officials, and members of religious, labor,
and media organizations. Though sports franchises are the chief beneficiaries of these subsidies,
they rarely play a major role in these coalitions. These groups have a strong influence over all
local development policy, which they use to serve their parochial interests. Their detachment from
sports franchises permits them to portray their stadium advocacy as being in the best interests
of the overall community, and thus their support influences voters. In an environment where the
voting public is largely ignorant of the complicated finances of stadium projects, team owners can
rely on, or subtly collaborate with, community leaders to build support for subsidies.
Coalition members likely see sports as a way to foster their own interests, such as client
development and employee recruitment, even if there is not an economic payoff to the wider com-
munity. CEOs use sports as a tool for attracting top executives and qualified workers, for whom
the presence of a local team is a desirable quality or signal of available local amenities. While the
returns are not sufficient to self-fund a stadium project by coalition members, as long as the tax
burden is shared with the general public, the group is willing to support and use their influence
13The nine cities studied are Cincinnati, Cleveland, Denver, Hartford, Minneapolis, Pittsburgh, Philadelphia,
Phoenix, and San Diego.
44

to advocate subsidizing stadium projects. Politicians garner credit for “taking action” to stem
declining populations and tax bases by supporting a visible activity that is viewed favorable by
most community members regardless of political affiliation. Local leaders are inclined to be accom-
modating to sports franchises, which can provide unique perks through access to luxury stadium
amenities (e.g., suites, club seats, complimentary tickets, and concessions) as well as socializing
with celebrity athletes and other local power brokers (Delaney and Eckstein 2007).
The coalition has an organizational advantage from its composition of trusted public fig-
ures, who have social networks that allow them effectively to obfuscate and distort the costs and
benefits to the community, often simply declaring informed critics to be “naysayers” who are acting
disingenuously to attract publicity. Critics are in a disadvantaged position where they must “un-
convince” the public of a false conventional wisdom that such projects are economically desirable
(Delaney and Eckstein 2007). Delaney and Eckstein (2003a) provides examples of how credible aca-
demic studies are often neutralized by local growth coalitions to promote stadium benefits to the
community. Strategies include ignoring unfavorable studies, counteracting credible studies with
commissioned advocacy reports, and pointing to alternate intangible benchmarks (e.g., being a
“big-league city”). Though Delaney and Eckstein highlight the success of boosters promoting non-
economic factors, our observations of recent stadium campaigns do not support this interpretation:
economic development claims remain as strong justifications for public subsidies.
8.4.1. Favorable local media coverage. Aligning with politicians and local growth coalitions, often
through local media outlets, clearly represents a successful strategy for promoting stadium subsidy
initiatives. After reviewing how media coverage impacted several stadium campaigns for public
funding, Delaney and Eckstein (2008) conclude “that the local media’s approach can more proac-
tively shape and frame the public’s perception of a stadium initiative and, all other things being
equal, significantly affect the outcomes of these initiatives for better or for worse” (p. 91).
Delaney and Eckstein (2008) observe that “an uncritical media often becomes the primary
institutional booster of stadium projects in cities with a weak growth coalition” (p.72). Media
members may see sports teams as complementary products: residents are more willing to subscribe
to local newspapers or watch local broadcasts if they are covering a local team. News media can
contribute to public misperceptions of the project by not accurately conveying costs and benefits
to consumers, or some members may become active advocates for promoting stadium projects,
effectively participating in the local growth coalition. In their research they find: “For the most part,
45

local newspapers, television, and radio were editorial sycophants for proponents of new publicly
subsidized stadiums and ridiculed opponents as shortsighted and selfish. . . In every city we studied,
the main local newspaper editorially favored using public dollars for private stadiums” (Delaney
and Eckstein 2003b, pp. 18, 193)).
While these findings derive from studying stadium funding campaigns, the discovery of the
importance of local growth coalitions likely has applications beyond sports subsidies. Local growth
coalitions play large roles in shaping other local policy, and thus are deserving of further scrutiny
of public finance researchers in other areas.
8.5. Political pandering. Jensen and Malesky (2018) develop a theoretical framework grounded
in the political science literature for understanding a related paradox plaguing local economic
development policy, equally applicable to stadium subsidies. Just as elected representatives tend to
support subsidizing sports teams and events, politicians often openly promote the use of economic
development incentives to attract businesses despite strong evidence of the ineffectiveness of such
policies and the fact that most do not pass a cost-benefit test. While rent seeking through campaign
donations or other forms of political support—including nefarious exchanges—may play a role,
it does not appear to be a major driver in determining economic development policy. These
agreements and relationships are not hidden behind closed doors; instead, they are promoted openly
and celebrated at press conferences, where politicians claim direct responsibility.
Jensen and Malesky (2018) present an alternate hypothesis: politicians pander to voters
by taking credit for attracting desirable new businesses when voters are largely unaware or uncer-
tain about the true costs and benefits of the development deal. They find that US voters tend
to support politicians who seek to attract businesses, even when they fail to accomplish state
goals. Even though elected representatives are likely aware of the negative cost-benefit calculus,
re-election-maximizing politicians have the incentive to exploit voter rational ignorance on the value
of economic development projects by supporting economically inefficient projects and policies.
Though the pandering theory was constructed to explain the continuing disbursement of
inefficient economic development incentives, its framework is generalizable to stadium subsidies
and complements the Delaney and Eckstein (2003b) local growth coalition model. Sports venues
are large visible projects that support an activity that is viewed favorably by the public, and local
politicians are in positions where they can take credit for the development. By aligning with a
community of local insiders, franchise owners may be able to persuade elected representatives and
46

the public that stadium subsidies are desirable public policy, which encourage politicians to provide
public funding.
8.6. Why do local governments continue to subsidize sports venues? Perhaps no line
of inquiry in research on public funding of sports stadiums has proved more unsatisfying than
the search to understand why local governments continue to fund stadium projects in the face of
overwhelming evidence that these subsidies are poor investments. The public funding paradox has
long eluded a clear, satisfying explanation. The question is not new, either. In 1997, Noll and
Zimbalist (1997) asked, “if stadiums are poor investments, why, in the era of limited government
skepticism about the nature of public construction projects, are expensive stadiums still being
subsidized?” (p. viii). The conjecture at the time was that local politics and sports teams bargaining
power offer explanations. Though political and bargaining incentives are no doubt important
contributors, they are not sufficient to explain the prevalence and dissemination of public funding.
The limited progress and study in this area is concerning given the policy relevance discussed in
Section 2. The role of influential local interest groups and leaders, like those identified by Delaney
and Eckstein (2003b) and Jensen and Malesky (2018), are difficult to observe and quantify using
common empirical methods employed by economists; yet, they appear to be an important causal
influence. Research in this area demonstrates the potential of qualitative research methods for
studying stadium subsidies may offer insight that existing attempts to understand the widespread
use of taxpayer funding to construct stadiums.
9. Conclusion
This comprehensive review of the literature on the impact of sports teams and venues on
local communities identifies several key findings. Empirical research progressed from early studies
of metropolitan areas using multiple regression analysis to rigourous event and case study methods
designed to infer causal effects accounting for multiple confounding factors. Even as empirical
methods improved, the findings remained largely consistent across this broad and vibrant literature.
Our review yields three main conclusions.
First, and perhaps most important, nearly all empirical studies find little to no tangible
impacts of sports teams and facilities on local economic activity, and the level of venue subsidies
typically provided far exceeds any observed economic benefits. In total, the deep agreement in re-
search findings demonstrates that sports venues are not an appropriate channel for local economic
47

development policy. Any identified economic effects typically occur in the area immediately sur-
rounding stadiums and arenas; however, spatially concentrated impacts are not always present and
thus they can not be generally applied to all stadium projects. No evidence of supporting broad
metropolitan-level effects exists, indicating that sub-local (neighborhood) effects are not equally
distributed in host jurisdictions. Localized impacts likely reflect intrajurisdictional displacement
or crowding out and these transfers in economic activity creates both winners and losers.
Second, economic research clearly identifies evidence of important intangible social bene-
fits from hosting sports activities, which indicates that sports teams do produce positive spillovers
through quality-of-life amenities, consumer surplus, and community pride benefits in some circum-
stances. However, these spillovers are not identified in all communities, and in several cases research
identifies the presence of negative effects from associated crime, congestion, and other disamenities.
Furthermore, even where positive relationships exist, estimated benefits tend to be insufficient to
justify the level of subsidies provided.
Third, despite the consensus findings of economic studies that the benefits of hosting pro-
fessional sports franchises are not sufficient to justify large public subsidies, taxpayer funding for
these subsidies continues to grow. This paradox reveals a disconnect between findings in economic
research and policy applications that requires correcting. Most economic contributions to public
policy feature economists conducting theoretical and empirical research according to disciplinary
standards and presenting their findings and recommendations to policymakers, who are generally
amenable to expert recommendations. Sports subsidies represent a curious situation, because ac-
tual policy adopted stand in direct opposition to the recommendations of the consensus research
findings. Further research is needed to understand why policy choices continue to defy researcher
recommendations in this area.
While we encourage researchers to continue studying the impacts of sports venues on host
communities, especially using improved empirical methods and evaluating newer facilities, it is
important to understand that additional research alone will be unlikely to influence public policy or
public policy makers. Our survey reveals that it is not a dearth of results that plagues policymaking,
but instead, policymakers are not a receptive audience for this research. The scale is already
tipped heavily against the desirability of sports facility projects for improving resident welfare.
Additional research seems unlikely to have a wider influence on policy making. it will confirming
what is already known to researchers in the field. Researchers seeking to influence stadium policy
48

discussions may need to seek other outlets to persuade the public and policymakers and employ
more than a passive “look to the research” approach. Examples include interacting directly with
local community leaders and media members to combat stadium advocacy coalitions which have a
strategic advantage in influencing the public narrative.
It is important for local leaders, media members, and taxpayers, and voters to understand
why economists have reached such a strong consensus in simple terms easily comprehended by
non-economists. We encourage policy makers and media members to use Wassmer et al. (2016)’s
critical evaluation of economic impact reports commissioned boosters as a test of credibility. Most
importantly, economists need to effectively communicate why directly-observed sports-related eco-
nomic activity does not produce additional, broader economic value in the community: economic
activity in and around sports facilities on game day represents a transfer from other local commer-
cial activity and comes at the expense of existing local businesses. Overall, consensus findings from
economic research demonstrate that public subsidies to fund sports stadiums and arenas likely do
not pass a cost-benefit test.
49

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62

Appendix A. Comprehensive list of studies
Table A1. Economic studies of sports venues and teams (chronological order)
Article Subject General Description of Units Period Generalized Findings

Empirical Method (obs) (obs)
Okner (1974) Venue Descriptive presentation of Major- “[T]he prime beneficiaries of the
Funding stadium financing league local government subsidies are the
arrangements. sports owners of sports teams—most of

venues whom are extremely wealthy.”
Baade and Dye (1988a) Teams/ Impact of teams/ venues on MSAs (8) 1965-1978 Manufacturing employment (0),
Venues manufacturing activity. (14 years) Manufacturing value added (0),
Multiple regression (separate New capital expenditures (0)
OLS estimates per MSA).
Baade and Dye (1988b) Survey Survey of theoretical “The claim is that these public
justifications for stadium subsidies for private activities will
subsidies and review of induce a substantial flow of direct
63
existing evidence. and indirect benefits. . . is weak on

the premise that spending on
stadium events is net new spending
for the area.”
Baade and Dye (1990) Teams/ Impact of teams/ venues on MSAs (9) 1965-1983 Aggregate income (0). Regional
Venues economic activity. Multiple (19 years) share of income: stadium(–),
regression (separate and football (0), baseball (0).
pooled OLS estimates). Aggregate retail sales (0). Regional
share of retail sales: stadium (–),
football (+), baseball (0).
Baim (1994) Teams/ Case studies of public Stadiums 1953-1991 “Direct municipal stadium
Venues stadium projects. (15) financing almost always involves a
transfer of wealth from the
taxpayer.”
Statistically significant (+/-) or null (0) findings in parentheses.
Table A1. (continued)

Rosentraub et al. (1994) Teams/ Case study comparison of Indianapolis 1977-1989 Sports sector employment ,
Venues city with sports-focused (13 years) 1977-1989 (0); Sports sector
development strategy to employment , 1983-1989 (–); MSA
cities without this focus. employment (0); MSA wages (0).
Crompton (1995) Survey Survey of contracted Contracted Identifies 11 common errors in

economic impact reports. reports (20) for-hire economic impact reports.
Descriptive.
Johnson (1995) Teams/ Case studies of minor league Stadiums “[M]inor league stadiums can play
Venues baseball stadium projects. (15) important economic development
roles. The critical factor. . . is how
well the stadium serves the
community’s nonbaseball
recreational and entertainment
64
needs.”
Baade (1996) Teams/ Impact of teams/ venues on MSAs (48) 1958-1987 Income per capita (0); City’s share
Venues economic activity. Multiple (30 years) of state employment in recreation/
regression (separate and sports (0).
pooled OLS estimates).
Chema (1996) Teams/ Reply to Baade (1996). Baade (1996) does not properly
Venues account for modern stadiums
incorporated into urban growth
strategies.
Noll and Zimbalist (1997) Survey Collected volume of studies. 15 chapters Various “In every case, the authors find
on various that the local economic impact of
subjects sports teams and facilities is far
smaller than proponents allege; in
some cases it is negative.”

Irani (1997) Consumer Estimate of linear demand MLB 1972-1991 Large annual estimates consumer
surplus curve Teams surplus in MLB attendance
markets
Rosentraub (1997) Teams/ Descriptive. “The sports welfare system

Venues exists. . . because state and local
government leaders, dazzled by
promises of economic growth from
sports. . . have failed to do their
homework.”
Swindell and Rosentraub (1998) Option Telephone survey of Indianapolis 1996 Residents received intangible civic
Value Indianapolis households on (1,536 pride benefits from hosting sports
intangible value of various households) teams/events.
sports activities.
65
Coates and Humphreys (1999) Teams/ Impact of venue/teams on MSAs (37) 1967-1994 Income per capita: level (–),
Venues economic activity. Multiple (28 years) growth (0).
regression (random effects).
Hudson (1999) Teams/ Impact of teams/ venues on MSAs (17) (20 years) Employment (0).
Venues employment. Multiple
regression (fixed effects).
Porter (1999) Survey Survey of contracted Counties 1979-1996 Sales (0).
economic impact reports. (6) (6 Super
Multiple Regression. Bowls)
Alexander et al. (2000) Consumer Non-econometric estimate of All pro 1996 Substantial evidence of CS in
surplus CS using gate revenue data sports sports attendance markets
teams
Johnson and Whitehead (2000) Option CVM mail survey regarding Households 1997 Nonuse value is small portion of
Value college basketball and (230) willingness to pay.
minor-league baseball venues
in Fayette County, Kentucky.

Siegfried and Zimbalist (2000) Survey Survey of academic literature “[I]ndependent work on the
on the economic impact of economic impact of stadiums and
sports facilities. arenas has uniformly found that
there is no statistically significant
positive correlation between sports

facility construction and economic
development.”
Baade and Matheson (2001) Local Sales Impact of MLB All-Star MSAs (23) 1973-1997 Employment share (0); Taxable
game on local employment (w/ gaps, sales (0).
share and taxable sales. 23 years)
Coates and Humphreys (2003a) Teams/ Impact of work stoppages MSAs (37) 1969-1996 Income per capita : Work stoppage
Venues and team departures on (28 years) (0), Team departure (0).
economic activity. Event
66
study. Multiple regression

(fixed and random effects).
Hudson (2001) Survey Survey of economic impact Reports 1972-1997 “The studies in this sample tended
reports. Meta-analysis. (13) to use methodologies that would
inflate the economic impact of the
sports team being studied.”
Johnson et al. (2001) Option CVM mail/distributed survey Households 2000 Nonuse value not sufficient to cover
Value regarding funding to support (293) subsidy.
NHL’s Pittsburgh Penguins.
Nelson (2001a) Teams/ Impact of teams/ venues on MSAs (43) 1969-1994 MSA share of state income per
Venues economic activity, accounting (26 years) capita (+, agglomeration effects
on metro-area location. weakly associated w CBD stadium
Multiple regression. location).
Wassmer (2001) Teams/ Comment on Nelson (2001a). Nelson (2001) likely suffers from
Venues endogeneity and omitted variable
bias.

Austrian and Rosentraub (2002) Teams/ Descriptive comparison of Cities (4) 1992-2000 Sports-focused downtown
Venues cities with (Cleveland and development strategies helped
Indianapolis) and without downtown development.
(Cincinnati and Columbus)
sports-focused downtown
development strategies.
Chapin (2002) Teams/ Case study of San Diego’s San Diego’s 1998-2004 “[T]he City of San Diego’s Ballpark
Venues MLB stadium development Petco Park Project serves as a potential model
project as an example of develop- for realizing downtown
“municipal capitalism.” ment redevelopment through investments
Descriptive. in large activity generators like
sports facilities.”
Coates and Humphreys (2002) Teams/ Impact of post-season MSAs (37) 1969-1997 Income per capita: Post-season
67
Venues participation on economic (29 years) participation (0), Presence of team

activity. Event study. (–), Hosting Super Bowl (0),
Multiple regression (fixed Winning Super Bowl (+).
and random effects).
Miller (2002) Teams/ Impact of construction of Construction 1971-1998 Construction: Employment (0),
Venues NHL and NFL venues in St. employ- (112 Wages (0).
Louis on construction ment quarters)
employment. Multiple
regression (time series).
Siegfried and Zimbalist (2002) Teams/ Identifies number of players NBA 1999-2000 29% players live in the same or
Venues who live in the same region players season adjacent county their team.
as their team. (220)
Coates and Humphreys (2003a) Teams/ Impact of teams/ venues on MSAs (37) 1969-1996 Earnings per employee in
Venues sector-level employment. (28 years) Amusement and Recreation (+).
Multiple regression. Earnings per employee in other
sectors (0/-).

Coates and Humphreys (2003b) Survey Survey of academic literature “[A] growing body of evidence
on the economic impact of indicates that professional sports
sports facilities. facilities, and the franchises they
are home to, may not be engines of
economic growth in urban

neighborhoods.”
Delaney and Eckstein (2003b) Venue Case studies examining how Cities (9) 1998-2003 “The easiest path to a new publicly
Funding stadiums garner public subsidized stadium is to have a
funding from local strong, clandestine,
governments. Interviews. corporate-driven, local growth
coalition that chooses to emphasize
ways in which the stadium will
enhance community self-esteem
and community collective
68
conscience” (p. 42).

Delaney and Eckstein (2003a) Venue Explores how academic Cities (9) 1998-2003 “[P]ro-stadium elites have ignored
Funding economic impact studies are the studies, criticized them without
neutralized by stadium competing evidence, commissioned
advocates. Case studies. contradictory studies, or shifted
the debate to non-measurable
endpoints” (p. 189), with the latter
being most important.
Carlino and Coulson (2004) Teams/ Impact of NFL/MLB teams CMSAs 1993 & Rents: NFL (+ 8%, with stronger
Venues on local rents and wages. (53) 1999 (2 effects for central city), MLB (+ in
Multiple regression (fixed years) suburbs). Wages: NFL (– 2%).
and random effects). Cumulative findings represent
compensating differential.

Chapin (2004) Teams/ Case studies of Baltimore’s Cities (2) 1989-2003 “Baltimore’s Camden Yards . . . has
Venues Camden Yards and not been the urban redevelopment
Cleveland’s Gateway catalyst that it has been perceived
development projects. to be . . . Cleveland’s experience
Descriptive. indicates that sports facilities can

play a role in urban revitalization
efforts, catalyzing district
redevelopment in the form of
hotels, residences, and retail
businesses.”
Groothuis et al. (2004) Option Explores why local Households 2000 40% respondents support public
Value/ governments subsidize sports (273) funding sports venues. Strong civic
Venue venues using Pittsburgh, PA. pride benefits from sports teams,
Funding CVM mail survey. strongest among game attendees.
69
Lavoie and Rodrı́guez (2005) Hotels Impact of work stoppages Canadian 1990-1999 Hotel occupancy: NHL strike (–).
and team arrivals/departures cities (8) (120
on hotel occupancy in months)
Canada. Box-Jenkins method
(separate cities).
Long (2005) Venue Estimates true public cost of Stadiums & 1912-2001 After accounting for routinely
Funding sports venues by including arenas (99) unreported costs—land,
costs normally omitted from infrastructure, operations, capital
public subsidy calculations. improvements, municipal services,
and foregone property
taxes—public subsidies are 40%
higher than reported subsidies.
Santo (2005) Teams/ Impact of teams/ venues on MSAs (19) 1984-2001 Aggregate income: Baseball
Venues economic activity. Multiple (18 years) stadium (+), Baseball team (–).
regression (separate and Regional share of income: Baseball
pooled OLS estimates). stadium(+).

Tu (2005) Property Impact of new stadium on Homes 1992-2001 Property values (+).
Values surrounding neighborhood sales
home sale prices. Hedonic (35,000)
pricing model, using
difference-in-differences
estimation strategy.
Carlino and Coulson (2006) Property Reply to Coates et al. (2006). CMSAs 1993 and Not persuaded by Coates et al.
Values (53) 1999 (2 (2006).
years)
Coates (2006) Local Sales Impact of hosting Super Houston 1991-2006 Both events: Monthly sales tax
Bowl and MLB All-Star (182 revenue (+); Quarterly (total,
Game on local sales. months); retail, and service) sales (0).
1991-2005
70
(60
quarters)
Coates and Humphreys (2006) Voter Impact of proximity to Green Bay Green Bay: Referendum support and stadium
Preferences stadium sites and referendum (89 2000 , proximity (–).
support. Multiple regression precincts), Houston:
(OLS). Houston 1999 &
(894 & 914 2000
precincts)
Coates et al. (2006) Property Comment on Carlino and CMSAs 1993 and Findings not robust to alternate
Values Coulson (2004). (53) 1999 (2) model specifications.
Johnson et al. (2006) Option Examines temporal Households 2002 Willingness to pay is sensitive to
Value embedding and ordering (421 ) payment period length. Limited
effects in CVM survey (see evidence of weak ordering effects.
Johnson et al. (2007)).

Rosentraub (2006) Survey Positive nonuse and Cleveland Prospective “The decision to invest in a sports
development benefits from facility has both pecuniary and
sports activity may be nonpecuniary effects. Only when
stuffiest to justify public the decision process involves both
subsides. Descriptive. can the context of the investment

be understood and
appreciated.. . . the framework
proposed can help communities
understand the nature of the
benefits, risks, and returns.”
Coates (2007) Survey Survey of academic literature Little of the academic research that
on the economic impact of investigates effects ex post finds
sports facilities. significant increases in income,
employment, taxable sales, or tax
71
revenues associated with sports

and sports facilities. . . rough
calculations [of social benefits]
indicate that they are not
necessarily large enough to justify
subsidies of hundreds of millions of
dollars.
Dehring et al. (2007) Property Impact of stadium proposals Residential 2004-2005 Downtown Dallas (+); Suburban
Values on property values. Hedonic property Arlington (–).
pricing model, using sales
difference-in-differences (74,412)
estimation strategy.

Delaney and Eckstein (2007) Venue Explores why communities Cites (2) 1990s - “Governments are predisposed to
Funding view public financed sports mid-2000s support publicly financed stadiums
stadiums as a wise despite public opposition, and fail
investment. Case studies of to do so only when the local
Cincinnati and growth coalition is weak or

Minneapolis/St. Paul. ineffective” (p. 350).
Johnson et al. (2007) Option CVM mail survey regarding Households 2002 Nonuse value not sufficient to cover
Value NFL’s Jacksonville Jaguars (421) subsidy.
and potential NBA.
Lertwachara and Cochran (2007) Teams/ Impact of sports franchise MSAs (33) 1969-2000 Income per capita (–).
Venues expansions and relocations (32 years)
on income per capita.
Financial event study.
72
Santo (2007) Option CVM telephone survey of Adults 2005 Majority of residents not willing to
Value Portland residents regarding (365) pay higher taxes to fund stadium.
public funding for MLB
stadium.
Walker and Mondello (2007) Option Reviews relevant concerns for “CVM represents an important
Value researchers employing CVM component of economic valuation
to estimate nonuse value of . . . [that] can be applicable to
sports activities. recreation, environment, and sport.
. . . Several authors have questioned
its validity, reliability, and survey
techniques. However, with some
refinement and continued
application, CVM could prove a
useful valuation tool in the future.”

Baade et al. (2008) Local Sales Impact of various sports MSAs (4) 1980-2005 Mixed findings (0).
teams, events, stadiums on (306
taxable sales in Florida months)
MSAs. Multiple-regression
(separate MSA estimates).

Coates and Humphreys (2008) Survey Survey of academic literature “The large and growing
on the economic impact of peer-reviewed economics literature
sports facilities and on the economic impacts of
mega-events. stadiums, arenas, sports franchises,
and sport megaevents has
consistently found no substantial
evidence of increased jobs, incomes,
or tax revenues for a community
associated with any of these
73
things.”
Dehring et al. (2008) Voter Impact of stadium property Homes 2004 Referendum support and property
Preferences values effects and home (3,108) values (+); Referendum support
ownership on stadium and home ownership (–).
referendum support in
Arlington, TX. Hedonic price
model.
Delaney and Eckstein (2008) Venue Explores media’s role in Stadiums mid-1990s - “A relatively critical media can
Funding policy debates over stadium projects 2008 seriously impede a stadium project
subsidies. Case studies. (23) in . . . when the local growth coalition
cities (16) is weak . . . [A]n uncritical media
often becomes the primary
institutional booster of stadium
projects in cities with a weak
growth coalition” (p. 72).

Jasina and Rotthoff (2008) Teams/ Impact of sports teams on Counties 1986-2005 Employment and wages for all
Venues county employment and (58) (20 years) sectors (mixed/ –).
wages at sector level.
Multiple regression (fixed
effects).
Swindell et al. (2008) Option CVM telephone survey of Households 2004 Nonuse value positive ($60-85
Value Indiana residents regarding (865) million), but not sufficient to cover
how much they value hosting subsidy ($650 million).
NFL’s Colts.
Depken and Coates (2011) Local Sales Impact of hosting big college Cities (4) 1984-2008 Games and sales tax revenue (0).
football games in Texas cities (290
(Austin, College Station, months)
Lubbock, Waco). Multiple
74
regression.
Fenn and Crooker (2009) Option CVM mail survey of State & 2002 Nonuse value not sufficient to cover
Value Minnesota and MSA (1,200 subsidy.
Minneapolis-St. Paul MSA households,
regarding NFL’s Minnesota 565
Vikings during a relocation responses)
threat.
Rees and Schnepel (2009) Crime Impact of college football Reported 2000-2005 Assaults (+); Vandalism (+);
games on crime in campus offenses (14,926 Alcohol-related (+).
police jurisdictions. Multiple (26) days; 1,516
regression (negative game days)
binomial).
(Rosentraub 2009, 2014) Teams/ Case studies of sports as Cities (6) Various “As investments, the tax dollars
Venues local development policy. expended for venues have generated
Descriptive. (2 editions) positive net financial returns.”

Ahlfeldt and Maennig (2010) Property Impact of multi-purpose Statistical 2005 Proximity and property values (+).
Values Olympic sports arenas in blocks
Berlin on property values. (11,184)
Hedonic pricing model.
Erie et al. (2010) Teams/ Assesses public-private San Diego’s 1998-2004 “In all, the ballpark project has
Venues partnership relating to San Petco Park been a net drain on the city’s
Diego MLB stadium. develop- . . . finances . . . San Diego’s
Descriptive case study. ment partnership with the Padres has
mostly benefitted . . . Padres’ owner
John Moores [from] public
subsidies and East Village
development rights . . . San Diego
taxpayers, . . . have been left to
absorb the fiscal fallout.”
75
Baade et al. (2011) Local Sales Impact of hosting college MSAs (2) 1979-2007 Basketball (0); Football (+)
basketball and football games (340
on taxable sales in Florida months)
(Gainesville, Tallahassee ).
Multiple regression (separate
OLS estimates per MSA).
Castellanos et al. (2011) Option CVM personal interview Metro-area 2003 Nonuse value sufficient to cover
Value survey of A Coruña, Spain adults replacement stadium but not
residents regarding the (739) support club.
nonuse value of local soccer
club.
Depken and Coates (2011) Local Sales Impact of various sports Texas cities 1990-2008 Mixed findings for most events (0);
teams, events, stadiums on (23) (216 Championship games (+).
sales tax revenue. Multiple months)

Coates and Humphreys (2011) Teams/ Impact of sports franchise Male 1983-2002 Earnings: MLB (mixed), NBA (0),
Venues presence on worker wages in workers NFL (+).
occupations directly and (44,856) in
indirectly related to MSAs (251)
professional sports. Multiple

regression, with MSA, time,
and occupational fixed
effects.
Ahlfeldt and Maennig (2012) Voter Impact of proximity to Precincts 2001 Referendum support and stadium
Preferences stadium sites and referendum (261) proximity (–).
support in Munich. Multiple
regression (OLS and SAR
estimates).
76
Baumann et al. (2012) Crime Impact of major-league MSAs (56) 1981-2006 MSA annual crime rate: Teams
teams and mega-events on (24 years) (0), Olympics (+), Super Bowl (–).
annual crime rate. Multiple
Cantor and Rosentraub (2012) Teams/ Case study of San Diego’s San Diego’s 1998-2009 “[L]ooking at economic integration,
Venues MLB stadium development Petco Park the stability of home prices, and
project. Descriptive. develop- the attraction of educated people
ment to a city’s center, the Ballpark
District should be considered a
success.”
Feng and Humphreys (2012) Teams/ Impact of proximity to sports Census 1990 & Proximity and property values (+).
Venues venue at census block level. blocks: 2000 (2
Hedonic multiple regression 1990 years)
pricing model of (28,500);
cross-sections. 2000
(30,346)

Johnson et al. (2012) Option CVM telephone interview Adults: 2007 Nonuse value not sufficient to cover
Value survey regarding downtown Calgary subsidy.
stadiums for NHL’s Calgary (331),
Flams and Edmonton Oilers. Edmonton
(339)
Propheter (2012) Teams/ Impact of NBA teams/arenas MSA (24) 1979-2009 Regional income (0). Income per
Venues on personal income. Multiple (31 years) capita: All, 1988-1994 (+);
regression (separate and fixed NBA-only, 1985-2009 (+),
and random effects). 2001-2009 (–); Multi-sport (0).
Agha (2013) Teams/ Impact of minor-league MSAs (238) 1985-2006 Income per capita (+).
Venues baseball teams on income per (22 years)
capita. Multiple regression
(fixed effects).
77
Long (2013) Venue Examines the public costs of Major- 1876-2010 Provides extensive summary of
Funding professional sports facilities. league trends in public financing of sports
Descriptive. sports venues, using detailed cost
venues accounting.
Ahlfeldt and Kavetsos (2014) Property Impact of proximity to Residential 1995-2008 Proximity and property values (+).
Values London soccer stadiums. property
Hedonic price model, sales:
difference-in-differences. Wembley
(5,263),
Arsenal
(9,933)
Huang and Humphreys (2014) Property Impact of new stadiums on Census 1992-2010 Proximity and residential
Values residential mortgage tracts (19) mortgages (+), but much of it
applications. (45,000) in likely would have occurred without
Difference-in-differences. MSAs (56) the stadium.

Mills et al. (2014) Local Sales Impact of two sports City 1989-2009 Sales tax and revenue (+), though
stadiums on sales tax revenue (252 net benefits unclear.
in Arlington, TX. Multiple months)
regression.
Propheter (2014) Local Sales Impact of MLS stadium Municipal 2005-2010 Sales tax revenue: Bridgeview (0),
opening in Bridgeville, IL on govern- (128 Other municipalities (0, mixed).
sale tax revenue of host and ments (168) months)
surrounding municipalities.
Multiple regression (fixed
effects).
Agha and Coates (2015) Teams/ Impact of minor-league teams MSAs (138) 1993-2005 Housing rents in mid-sized
Venues on residential rents. Multiple (13 years) markets: MLB affiliates (+6-8%),
regression (fixed effects). Independent (0).
78
Coates (2015) Teams/ Impact of venue/teams on MSA (366) 1969-2011 Multiple estimates: Income (0, –),
Venues economic activity. Multiple (42 years) Wages (0, –).
regression (fixed and random
effects).
Horn et al. (2015) Voter Impact of proximity to NFL Precincts 1997 Referendum support and stadium
Preferences stadium and referendum (2,500) proximity (–, inverted U-shape).
support in King County, WA.
Multiple regression (LP and
group logit estimates).
Humphreys and Zhou (2015b) Teams/ Theoretical model of how Sports franchises use territorial
Venues teams use relocation threats monopolies to exploit resident
to extract public subsidies. reference-dependent loss averse
preferences to extract public
subsidies.

Humphreys and Zhou (2015a) Teams/ Theoretical model of Sports-focused agglomeration is
Venues sub-local commercial determined by complementarities
agglomeration regarding and substitutability with sports,
sports commerce. which results in entry and exit,
respectively. There is no
generalized positive or negative
outcome, on net.
Harger et al. (2016) Business Impact of new stadiums on Nearby 2002 & Establishments (0). Employment:
Activity local business activity. establish- 2006 (2nd General (0), Eating/drinking (+,
Difference-in-differences. ments: quarter) within 1 mile).
census
tracts
(7,996) in
MSAs (10)
79
Kalist and Lee (2016) Crime Impact of NFL games on NFL cities 2004-2006 Home games and crime (+).
local crime. Multiple (8) (9,496
regression (OLS/Negative days)
binomial).
Marie (2016) Crime Impact of soccer matches on London 1994-1997 Home: Property crime (+), Violent
neighborhood crime in boroughs (1,147 crime (–). Away crime (–).
London. Multiple regression (7) hosing game-time
(negative binomial fixed soccer observa-
effects). teams (9) tions)
Montolio and Planells-Struse (2016) Crime Impact of FC Barcelona Crimes per 2004-2011 Thefts (+); Criminal damage (+);
matches on temporal aspects hour on (29,121 Robberies (+); Gender Violence
of crime. Multiple regression game days hours) (+).
(negative binomial).

Scherer (2016) Venue Examines community group Edmonton 2011-2013 “Boosterish” coalition of business
Funding organized in opposition to community, politicians, government
fund NHL officials, and team were able to
arena/entertainment district. exploit political opportunity
Case study. structure to contain community

opposition to stadium
development.”
Stoecker et al. (2016) Health Impact of team Super Bowl County 1974-2009 Super Bowl team participation:
participation on influenza vital (36 years) Influenza mortality, > age-65 (+).
mortality rates. statistics
Difference-in-differences.
Wassmer et al. (2016) Survey Review of common errors in Studies (5) 2008-2013 Identifies common errors in
commissioned economic commissioned reports and provides
80
impact reports and suggests 20 questions for evaluating.

method for standardized
evaluation. Descriptive.
Yu et al. (2016) Crime Impact of NBA and college Robberies 2010-2011 Robberies: Home (+), Away (0).
basketball games on local (16,383
robberies. Multiple regression game-time
(negative binomial). observa-
tions)
Humphreys and Nowak (2017) Property Estimate of NBA team Home sales: Seattle: Property values (–).
Values departures on home sale King 2000-2013.
prices. Repeat sales County Charlotte:
regression and hedonic price (191,908), 1990-2004
model. Mecklen-
burg
County
(50,002)

Propheter (2017) Venue Estimate of public subsidies Sports 1987-2012 Public funding (+).
Funding on venue opulence venues
(construction costs per acre). (105)
OLS.
Depken and Stephenson (2018) Hotels Impact of sports and other Hotel 2005-2014 Hotel stays, rates, & revenue: NFL
events on hotel outcomes in rooms (3,617 (+), NBA (0), Large multi-day
Charlotte. Multiple days) events (+).
regressions (separate
geographic regions).
Feng and Humphreys (2018) Teams/ Impact of proximity to two Single- 2000 Proximity and property values (+).
Venues sports stadiums on family
residential property sales. homes
Hedonic price model. (9,504)
81
Humphreys and Pyun (2018) Health Impact of MLB games on MSAs (88) 1990-2014 Daily average vehicle miles traveled
traffic congestion. Multiple (25 years) (+); Annual hours in traffic delay
regression (IV panel (+).
estimator).
Chikish et al. (2019) Hotels Impact of events on hotel Hotels near 2002-2017 NBA: Room rate (–), Stays (+),
occupancy and rates near Los Staples (> 16,000 Revenue (+). NHL: Room rate (–),
Angeles’s Staples Center. Center (139 days) Stays (–), Revenue (–). Mixed
Multiple regression (Regions hotels in 3 displacement effects from all events.
combined in single estimate). regions)
Humphreys (2019) Survey Point/counterpoint article on “[N]eighborhood revitalization, an
the case for subsidizing urban place-based policy, cannot
sports stadiums. justify [stadium] subsidies if spatial
equilibrium models of the urban
economy represent a reasonable
description of urban outcomes.”

Humphreys and Ruseski (2019) Health Impact of sports facility Newborns 1995-2002 Stadium construction: Birth weight
construction in county on (8.88 (–).
infant health. Multiple million) in
regression counties
(difference-in-differences, (62)
matching).
Islam (2019) Teams/ Impact of receiving NFL MSAs (28) 1975-2008 Employment growth (0).
Venues franchise on employment (34 years)
growth in Charlotte,
Jacksonville, and Nashville.
Synthetic control method.
Johnson and Hall (2019) Voter Impact of voter San Deigo 2016 Referendum support and stadium
Preferences characteristics and zip codes proximity (0).
82
referendum support for NFL (34)

stadium funding
Locke (2019) Health Impact of MLB games on Air quality 2010-2016 Air quality (–), but small
local air quality. Multiple monitors (daily) magnitude.
regression (fixed effects). near MLB
stadium
(29,
excludes
Toronto)
Mares and Blackburn (2019) Crime Impact of MLB games on Daily crime 1994-2016 Crime (+), stronger effects closer
crime in St. Louis. Multiple counts (8,217 to stadium.
regression (negative days)
binomial).

Matheson (2019) Survey Point/counterpoint article on Because of neighborhood effects,
the case for subsidizing ”one can make a reasonable
sports stadiums. economic argument that the
optimal level of sports facility
funding may be higher than zero

percent.”
Montolio and Planells-Struse (2019) Crime Impact of FC Barcelona Whole and 2007-2011 Thefts (+); Assaults (+), stronger
matches on crime. census (1,215 effect closer to stadium.
Exploratory spatial data tracts days)
analysis and spatial (1,061)
regressions.
Propheter (2019a) Business Impact of new NBA arena in Commercial 2006-2015 Commercial rents (+).
Activity Brooklyn on commercial lots within (10 years)
83
rents. Triple one mile

difference-in-differences. (1,967)
Propheter (2019b) Business Impact of gaining and losing Nearby 2004-2016 Nearby employment (0).
Activity MLS team in Denver (3-mile establish- (13 years)
radius). ments
Difference-in-differences. (1,000–
200,000)
Pyun (2019) Crime Impact of MLB team Cities (21) 2000-2019 Assaults (+); Other crimes (0).
relocating to Washington, (120
DC on crime. Synthetic months)
control method and triple
difference-in-differences.
Stitzel and Rogers (2019) Local Sales Impact of relocated NBA Nearby 2002-2010 Proximity and related sales (+);
team to Oklahoma City on establish- (9 years) Food (+); Entertainment (–).
related-industry ments
establishment sales by type. (3,559)

van Holm (2019) Teams/ Impact of new minor-league Census 1990, 2000, Home value (intracity, intercity) (+
Venues baseball stadiums on host tracts (68) & 2010 , 0); Population density (0, 0);
communities. near (roughly, Housing density (+, +); Vacancy
Difference-in-differences. stadiums decade rate (0, +).
(16); compar-
matched isons)
control
tracts (272)
Cardazzi et al. (2020) Health Impact of acquiring new Cities (122) 1962-2016 New team: Influenza mortality (+).
professional sports teams on (weekly)
influenza mortality.
Connolly and Touchton (2020) Venue Examines the effectiveness of US adults Not “public perceptions of municipal
84
Funding alternate justifications for (700) reported funding for sports stadiums are
subsidizing a minor league more favorable when the public is
baseball stadium. Survey. told that doing so will improve
economic conditions in the city.”
Depken and Fore (2020) Business Impact of events on Restaurant 2007-2013 Restaurant sales: NFL games (+);
Activity restaurant activity near near (2,350 NBA games (+); Other events
sports venues in Charlotte. sports/ days) (mixed).
Case study. tourism
venues (1)
Drukker et al. (2020) Venue Estimates federal subsidies to Stadiums 2000-2020 Present value of subsidy : $3.6
Funding sports stadiums through (57) (21 years) billion. Lost revenue to federal
municipal bond tax government: $4.3 billion.
exemption.
Joshi et al. (2020) Property Estimate of MLS team Home sales: 2003-2016 Property values (–), distance
Values promotion in Seattle on King decaying effect within one mile.
property values. Repeat sales County
regression. (78,840)

Propheter (2020b) Business Impact of NBA stadiums on Nearby 2004-2018 Proximity and survival time: Retail
Activity business survival time in establish- (15 years) (–); Other sports-complementary
Sacramento. ments businesses (0).
Difference-in-differences. (8,482)
Propheter (2020a) Crime Impact of NBA stadium on Response 2016 Police response times: Downtown
police response times in time to (+), Suburbs (0).
urban and suburban settings daily police
following relocation within incidents
Sacramento. Doughnut-hole near
specification, triple Golden 1
difference-in-differences. Center
(42,580)
and Arco
Arena
85
(15,150)
Agha and Rascher (2021) Teams/ Impact of major- and MSAs and 2004-2012 Establishments (0); Employment
Venues minor-league teams and new MiSAs (9) (0)
stadiums on establishments (871)
and employment.
Multiple regression (Fixed,
random, & between effects).
Block (2021) Crime Impact of hosting NHL Nightly 2015-2019 Property (+); Assaults (+);
games on crime in Boston, crime (4 seasons) Alcohol-related (0).
Chicago, Los Angeles, and (1,310
Philadelphia. Multiple game
regression (Poisson). nights)

Jakar and Rosentraub (2021) Survey Surveys literature on use of Articles 1984-2019 Sports venue investments are rarely
public goods framework. (116) justified from public goods
framework. Argues sports venue
investments should be judged from
an “municipal capitalism”
framework.
Keeler et al. (2021) Property Impact of proximity to Los Nearby 1995-2004 Proximity and sale price (+),
Values Angeles NBA/NHL arena on home sales (10 years) announcement and opening effects.
house prices near Staples (15,957)
Center. Hedonic spatial
difference-in-differences.
Propheter (2021) Property Impact of proximity to sports Parcels 2006-2019 Proximity and recovery: Dodger
Values venue on recession recovery near: (14 years) Stadium (+), Others (0).
86
in property assessments in Dodger

Los Angeles. Accelerated Stadium
failure time estimator. (43,590),
Staples
Center
(44,566),
DH Sports
Park
(35,491)
Stephenson (2021) Hotels Impact of losing NFL team Hotel StL: StL: MLB (+), NFL(+), NHL (0).
on hotel occupancy in St. rooms 2011-2016 SD: MLB (0), NFL(+).
Louis and San Diego. (2,282
Multiple regression. days). SD:
2012-2017
(2,282
days).

Bradbury (2022b) Business Impact of relocation of Business 2010-2019 Commercial property assessments
Activity Atlanta MLB team/stadium Improve- (10 years) (0).
on host Business ment
Improvement District Districts
commercial property (12)

assessments. Synthetic
control method.
Bradbury (2022a) Property Impact of relocation of Atlanta 1999-2020 Property assessments (0).
Values Atlanta MLB team/stadium MSA (21 years)
on host county property counties
assessments. Synthetic (27)
control method.
Borges and Whetstone (2022) Property Impact of relocation of Las Home sales 1988-2021 More-expensive (+), less-expensive
87
Values Vegas Raiders on residential near (–). Proximity (–).

property values. Hedonic stadium
difference-in-differences (869,184)
approach.
Bradbury (in press) Local Sales Impact of relocation of Atlanta 2010-2019 Sales tax revenue per capita (0).
Atlanta MLB team/stadium MSA (40 Crowding out from stadium
on host county sales tax counties quarters) development evident.
collections. Synthetic control (24)
method.
Arif et al. (in press) Teams/ Impact of new facilities on 439,386 1991-2014 New stadiums (0).
Venues migration flows into and out MSA-year
of US MSAs. pairs
Humphreys et al. (in press) Crime Impact of new pro sports 52 police 1979-1995, Police employment: New NFL
teams on police budgets. jurisdic- 1997-2010 teams (+), MLB playoff games(+).
Difference-in-differences. tions

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THE IMPACT OF PROFESSIONAL SPORTS FRANCHISES AND VENUES

ON LOCAL ECONOMIES: A COMPREHENSIVE SURVEY

JOHN CHARLES BRADBURY

Date: April 4, 2022.

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2. Stylized facts and key policy issues

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Sports Venues Opened 8

Figure 1. Major-League Sports Venues Opened in US and Canada by Year (1970–2020).

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1970 1980 1990 2000 2010 2020

Arena Stadium Decade Median Decade Mean

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Strongly Agree 57 Strongly Agree 17

Strongly Disagree 1 Strongly Disagree 0

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4. Evidence from localized data

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5. Positive externalities from intangibles

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6. Negative externalities from disamenities

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8. The public funding paradox

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