Falling Prey to the Fallacy of “Tailgate Economics”

Published April 23, 2015

St. Louis, Missouri is in danger of losing its football team as city and state officials work feverishly on plans for a new publicly financed state-of-the-art stadium. The team’s owner sees greener pastures out west, and after years of subpar play on the field, fan support is tepid.

However, this story is not about the St. Louis Rams. It’s about the 1988 St. Louis football Cardinals. St. Louis and the state of Missouri built them a new stadium, Edwards Jones Dome, with taxpayer money.

Economics and Fan Pride

As it was in the 1980s, so it is today. National Football League (NFL) teams still prefer the public to subsidize new stadiums, using the possibility of leaving town as a not-so-veiled threat.

Currently, St. Louis and Missouri officials are presenting a plan to spend more than $400 million on a new stadium, to keep the St. Louis Rams, who moved to the city from Los Angeles in 1995, the Cardinals having left in 1987

Diverting Diversions

Government officials here and around the country argue professional sports franchises boost regional economies and spur urban regeneration. Unfortunately, it just isn’t so.

Cities have been funding stadiums for decades. The vast majority of economic research shows little evidence these subsidies have yielded any economic benefits or growth in tax revenue.

As for claims of urban regeneration, stadiums can ride a revitalization trend, but there is no evidence they create them.

Stadiums simply divert entertainment dollars already being spent in the metro area. Unless the teams draw in many tourists, which is not the case with most NFL teams, including the Rams, NFL stadiums do not have a significant impact on the regional economy.

St. Louis, officials do not even need to read up on the economic literature. They can look at the results of the Edward Jones Dome, St. Louis’ current stadium. 

Tailgate Economics

Originally conceived as an effort to keep the Cardinals in St. Louis in the 1980s, the Edward Jones Dome was entirely publicly financed.

When it opened in 1995, it was considered state-of-the-art. Twenty years later, the Edward Jones Dome is being described as outmoded, even though the city government is still paying for the loans. The new stadium and new team had no noticeable effect on tax revenue, aside from a small increase in income tax receipts. As for urban regeneration, the Bottle District, immediately north of the stadium, is an empty lot.

Even assuming the best case, in which St. Louis is blessed with a football team holding home-field advantage through the two playoff games leading up to the Super Bowl, does anyone really believe that having 10 great tailgate parties a year outside a new riverfront stadium is the key to economic revitalization?

Joseph Miller ([email protected]) is a policy analyst with the Show-Me Institute, based in St. Louis, Missouri.