Politicians love subsidizing developers, for all sorts of reasons. Few types of projects get as much corporate welfare -- and deserve it as little -- as professional sports arena and stadiums [stadia?].
The Minnesota Vikings just secured a half-a-billion dollars in taxpayer subsidies for their new stadium. Ilya Shapiro and Nick Mosvick have dedicated an op-ed to explaining why this sort of thing is a boondoggle:
For example, Dennis Coates and Brad Humphreys performed an exhaustive study of sports franchises in 37 cities between 1969 and 1996 and found no measurable impact on per-capita income. The only statistically significant effects were negative ones because revenue gains were overshadowed by opportunity costs that politicians inevitably ignore....
Stanford economist Roger Noll has noted that the majority of attending fans come from within a 20-mile radius, such that money they spend would otherwise have gone to another form of local entertainment or recreation. In that light, publicly subsidized stadiums are at best zero-sum endeavors — a shift of resources called the "substitution effect."
Moreover, any real benefits go to ownership and players. A 1999 Cato Institute report found that 55% of the gains from subsidies to pro sports teams go to players and 45% to owners. It is thus unsurprising that a more recent study suggests that teams and their stadiums are valued much less by the public than commonly perceived.
