By Craig T. Bogar, Ed.D.
Associate Professor of Sports Management, School of Health Sciences
For years, owners of pro sports franchises, unhappy with less-than-expected profits, have attempted (sometimes successfully) to woo politicians and taxpayers in other cities into building new stadiums for their ball clubs. Some cities were hooked by questionable promises such as more jobs for residents and increased profits for businesses located in the area where a stadium might be built. These are some of the typical promises as compared to reality:
- While high-paying jobs are created for the construction of stadiums, the preponderance of jobs are seasonal and part-time once a facility is opened.
- Where local businesses are concerned, business traffic is high during a team’s season. Once a season concludes, the impact from the stadium on hotels, restaurants and other businesses in a stadium’s vicinity is minimal.
- People who reside in pro sports towns often spend their money on subsidies for stadiums, game tickets and home team merchandise, instead of on libraries, roads, and already-established businesses. Profits made from pro sports operations, however, are not guaranteed to stay in a city.
- Similarly, pro athletes do not live near stadiums as they did decades ago. As athletes’ income has risen, so too has their ability to live in more affluent areas and “commute to work.”
St. Louis and the Rams Football Team
In 1995, hoping to attract a National Football League (NFL) franchise, the city of St. Louis, the state of Missouri, and the county of St. Louis built a stadium. It was originally called the Trans World Dome (the naming rights were later purchased by Edward Jones, the financial services company). The Trans World Dome’s first occupants were the Rams, who moved from Los Angeles to St. Louis after the 1994 season.
The facility was paid for entirely with public funds, with the three entities agreeing to repay $258 million in bonds. The city’s share of funding was $6 million a year, which it expected to generate from game-day taxes – taxes on everything sold inside the stadium during a game.
Unfortunately for St. Louis, the Rams had a clause in their lease allowing them to leave for another city if the Edward Jones Dome dropped below the top tier of NFL arenas. This clause gave the Rams the leverage to demand public assistance for a planned new stadium.
In 2016, the owner of the Rams, Stan Kroenke, asked St. Louis for $700 million to upgrade the stadium. When the city rebuffed the demand, the NFL and St. Louis were notified that the Rams intended to move back to Los Angeles, where the Rams had played from 1946 to 1994.
After five years of legal haggling, the NFL and the Rams recently settled with the city of St. Louis and will pay the city $790 million to avert going to trial.
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Are City Leaders and Taxpayers Wiser Now?
So, the question is – have city leaders and taxpayers around the country now gotten smarter when cities have entertained the idea of building and funding professional sports facilities? The answer to the question appears to be yes. Here’s how pro sports facilities have been funded in recent years:
- The Rams’ new venue (SoFi Stadium), located in Inglewood, California, has been totally funded by Rams owner Stan Kroenke.
- Allegiant Stadium, located in Las Vegas, Nevada, is the new home of the former Oakland Raiders. Sixty-two percent of the price tag is being funded by the owners of the Raiders. The remaining 38% is funded by a hotel tax of 0.88%, which presumably will be paid by tourists, not the residents of Clark County, Nevada.
- Mercedes-Benz Stadium, the home of the Atlanta Falcons, opened in 2017. It was funded with 14% of public funds.
- In Minneapolis, U.S. Bank Stadium, where the Vikings play, opened in 2016. It was funded with 34% of public funds.
- The San Francisco 49ers play in Levi’s Stadium, which is in Santa Clara, California. The venue opened in 2014 and was funded with 9% of public funds.
Funding New Sports Venues Isn’t Just Occurring in the NFL
The trend of requiring sports team owners to invest more of their own money in building new sport venues is not only occurring in the NFL. In the National Basketball Association (NBA), the Chase Center, home of the of the Golden State Warriors, opened last year. It was totally funded by the owner of the Warriors.
In the National Hockey League (NHL), the UBS Center opened this year for the NHL’s Islanders. It was privately financed.
Major League Baseball’s Texas Rangers play at Globe Life Field, which opened in 2020. Funding for the ballpark is a 50-50 split between the Rangers and the city of Arlington, where the city’s share is a half-cent sales tax, a 2% hotel tax, and a 5% car rental tax.
As evidenced by the changes in funding for pro sports venues in recent years, it appears that taxpayers and politicians across the county have learned from the ill-fated decision made by the city/county of St. Louis and the state of Missouri in 1995. As a result, fully or mostly funding the construction of a new pro sports facility by the public appears to be a thing of the past.
About the Author
Dr. Craig Bogar earned his Doctor of Education degree in sports management from the United States Sports Academy in 2010. He is also a former dean of student services and adjunct faculty member at the Academy. Dr. Bogar also worked for several years as an adjunct faculty member and project coordinator in family medicine at the University of South Alabama in Mobile. He also served as director of athletics at the University of Mobile and at Loyola University New Orleans, where he served as athletic director from 1991 to 1999. He coached track and swimming respectively at those institutions.
Dr. Bogar earned his bachelor’s degree in business administration from Bryant University and his master’s in recreation from the University of Maryland College Park. In 2019, he was inducted into the Athletics Hall of Fame at Loyola University New Orleans.