This year, Major League Baseball’s opening day was the earliest it’s been in the modern history of the game. On March 29, 28 of the 30 MLB teams kicked off their 2018 season (two were prevented by the weather in Detroit). From now until the end of September, calls of balls, strikes, and home runs will be heard throughout the nation.
Fans will cheer and boo as their teams’ fortunes rise and fall over the next few months, but there’s one call that should echo in every hallway of our nation’s statehouses: a call to end taxpayer-funded corporate welfare for sports teams.
Elected officials often justify using taxpayer money to pay for the construction or renovation of sports stadiums by arguing it helps to create local economic growth. In reality, corporate welfare is a losing proposition for the very people elected officials claim to be helping: the taxpayers.
In one study on the effect of sports stadium subsidies, University of Maryland at Baltimore County economics professors Dennis Coates and Brad Humphreys found the construction or renovation of sports stadiums can have a negative impact on local wage growth.
“Interestingly, Humphreys and I found that the overall sports environment—which […] includes the presence of franchises in multiple sports, the arrival or departure of teams, and stadium construction—in a given area reduced per capita personal income by about $10,” Coates wrote. “In other words, every man, woman, and child in the metropolitan area was poorer by $10 as a result of the sports environment.”
It’s true that going out to the ballgame and rooting for the home team gives many intangible benefits to people, including local camaraderie and a day of fun with one’s family and friends. But subsidizing the private investments of billionaire sports team owners doesn’t guarantee economic growth or improve life for most people.
As Heartland Institute Senior Fellow and board member Joseph Bast notes, “Professional sports are rife with rent-seeking. Billions of dollars of rent are generated and kept by team owners and professional athletes every year, a practice that generates enormous deadweight losses to society. The solution is to remove the privilege – in this case, public subsidies used to build or renovate the stadiums and arenas used by professional sports teams – by expanding popular ownership of sports franchises.”
Instead of greasing the palms of lawmakers seeking a handout, sports teams should be emulating the taxpayer-friendly model used by a National Football League team with an extensive history of success and a very strong fan base: the Green Bay Packers.
Unlike most other top-level professional sports teams, the Packers are owned by the fans themselves. Collectively, 360,584 stockholders hold a total of 5,011,557 shares in the corporation, Green Bay Packers, Incorporated.
Under the Packers’ model, the team’s management will never threaten to leave if local taxpayers don’t agree to cough up more of their hard-earned money. The fan base is unlikely to allow its beloved sports team to depart for cities willing to subsidize new stadiums using tax dollars.
Many MLB teams have extremely loyal fan bases too. Can you imagine how many fans would jump at the chance to literally own a stake in the team? A future world in which fan ownership exists in the MLB would be one in which taxpayers also win. Giving fans a direct stake in the home team would help to solidify the bond between sports teams and fans, and it would cut the government completely out of a market it shouldn’t be involved in.
It’s time to tell big stadium subsidy deals to hit the showers and give fan ownership a swing at the plate.
[Originally Published at the Washington Examiner]
Jesse Hathaway is a policy advisor for budget and tax issues at The Heartland Institute.
