Stadium Subsidies are the New York Mets of Public Policy

Las Vegas is poised to poach another Oakland sports franchise: the Athletics. The Nevada State legislature on Wednesday approved S.B. 1, a proposal to direct $380 million in taxpayer money towards a new $1.5-billion ballpark on the Vegas Strip. The bill includes a property-tax exemption that could net the team a further $55 million, according to reporting from The Nevada Independent. Moreover, The Independent notes, the Silver State exempts in-state professional sports teams from its Live Entertainment Tax. To become law, S.B. 1 needs only a signature from Governor Joe Lombardo, whom observers expect will assent.

Public “investments” (more appropriately called taxpayer gifts) in professional sports stadiums yield unsatisfying returns to the public. This is despite advocates of public funding claiming vast economic benefits. An overwhelming number of economists agree that governments ought to eliminate subsidies and that they are “likely to cost the relevant taxpayers more than any local economic benefits that are generated.” Stadiums generally have a gravitational economic effect rather than a generative one. Instead of increasing total entertainment-related revenue, a sports team’s arrival reduces the revenue of other venues in the area consumers once patronized.

Stadium spending nonetheless remains overwhelmingly popular among politicians of both parties. Canadian and American governments spent $33 billion for major-league stadiums from 1970 to 2020. And economists John C. Bradbury, Dennis Coates, and Brad Humphreys write that governments may earmark for stadiums up to $20 billion more by 2030.

Major League Baseball has been one of the biggest beneficiaries of forced taxpayer kindness. For example, the New York Yankees Stadium drained roughly $1.186 billion from taxpayers. Likewise, the Texas Rangers fenagled $500 million from voters in 2016. Further, “Marlins Park was paid for with $488 million in bonds from Miami-Dade County and the city of Miami itself,” writes Jason Notte in MarketWatch.

What’s more, besides the general fiscal irresponsibility inherent to Nevada’s subsidy scheme, state lawmakers inserted 11th-hour amendments that would resurrect a pair of burdensome labor bills. These bills had already been vetoed previously by Gov. Lombardo. One “would have required rail and monorail projects to comply with the state’s prevailing wage law,” The Independent relates. The other “would have required companies with more than 50 employees seeking tax abatements from the state to provide their employees with at least 12 weeks of paid family and medical leave a year.” Such regulatory impositions weigh on taxpayers no more lightly than outright subsidy spending, and policymakers must include them in any cost–benefit analysis.

From a sports fan’s perspective, the A’s emigration from Oakland makes unending sense. The team has not won a championship since 1989 and has failed the reach the World Series in over thirty years. Even A’s executive Billy Beane’s vaunted Moneyball strategy ultimately grounded out. This year, the club boasts the second worst record in baseball, with a winning percentage barely breaking the lowly Mendoza Line due only to an improbable seven-game winning streak.

Perhaps worse, Oakland’s Coliseum, which boasts all the aesthetic charms of a freeway underpass, has drawn on average only 9,100 fans per game, the sparsest attendance record of any major-league team. In short, the team cannot sell tickets enough to even fill Columbia Park, its home from 1901 to 1908.

More than 27,000 A’s fans on Tuesday attended Tuesday’s home game against the Tampa Bay Rays to protest their team’s nascent move. However, the Oakland faithful’s show of force – the Coliseum’s largest crowd this year – still left vacant roughly 20,000 seats.

No wins, no fans. From Philadelphia to Kansas City to Oakland, the A’s have migrated repeatedly through the years. Another such relocation could help the team’s prospects. Further, with recent acquisitions of the Raiders and the Golden Knights – as well as the continued rise of mixed martial arts and the UFC – Las Vegas has transformed itself into a sports market the MLB would doubtless like very much to enter.

Government’s purpose is not to titillate sports fans or to rescue floundering franchises. Where the Athletics play ought to be determined by markets and the freely made financial choices of individual consumers, not politicians who feel empowered to mismanage the public’s money. This is why stadium subsidies are the New York Mets of public policy. No matter how promising they seem, they will always let you down.