Many people love going to sporting events in their hometown, especially for a team they love. It’s a great bonding experience, bringing different groups together for one goal: to root for their team. But not everything is as it should be when it comes to sports games. Few people actually know where the funding for the behemoth stadiums and arenas comes from, but in recent years, with events such as the Buffalo Bills striking a deal to extract 850 million tax dollars to fund their new stadium, this issue has moved to the forefront.
It is important to keep in mind that the owners of these sports teams are nearly all billionaires and that they all make enough revenue to construct stadiums on their own. SoFi Stadium in Los Angeles is a perfect example of how stadium infrastructure can be funded mostly by private sources. This specific case is more complicated as the developers did receive reimbursements from tax revenue, but only amounting to the cost of eligible public infrastructure they built (roads, parks, sidewalks, sewers, etc.). These reimbursements will come after 100% of the first 5 years of taxes go to Inglewood, and once the developers are fully reimbursed the tax revenue will be sent to the city.
Now on paper, the plan for tax breaks seems like a decent deal for the city. In the SoFi Stadium case, the city deemed it to be the right move. After all, the total amount of the tax breaks is close to 100m over five years, which compared to most other stadium deals isn’t the worst. Developers in other cities have taken the breaks a tad too far though. The Arizona Coyotes NHL team has historically been a pretty fiscally irresponsible team. They’ve been so bad that their previous home city of Glendale, Arizona kicked them out, leaving them to relocate to Tempe where they currently play games at ASU’s arena. The team is now currently negotiating a deal with the city of Tempe to build a new entertainment center, including a new arena for the team. This deal also includes around 500 million dollars of tax breaks for the team ownership group. The idea that a team so historically dysfunctional that their own league has threatened to relocate them is asking for over 500 million tax dollars is laughable. But it makes sense, given past context. Sports franchises have gotten comfortable with strong-arming local municipalities into handing them tax dollars, and it’s a trend that needs to stop.
Stadiums are often billed as being economically beneficial for the surrounding areas. The revenue brought in by the business created is said to offset the cost to the taxpayers. However, this has been proven time and time again to be a false assumption.
Cities often cave due to threats of teams leaving, taking their jobs and revenue with them. Although sports franchises can prove to be integral cultural contributors to a city, when considering large-scale issues such as poverty, hunger, and homelessness, it feels rather trivial to spend so much political focus on sports stadiums, especially when many if not most team owners are more than capable to privately fund their new stadiums. It is frankly unfair to ask the entire population to undergo tax raises for the sake of a stadium, especially when not everyone watches their hometown teams. Tax dollars are a powerful tool when used in the right places, and considering that taxes are only seeming to be lowered, the amount of places they can be used at the same time is declining. Arenas should be the last thing on the minds of legislators when allocating public funds.
