J.C. Bradbury

J.C. Bradbury

Do Sports Stadiums Help Local Economies?

A Primer on the Economic Impact of Stadiums

By J.C. Bradbury

My recent book This One Will Be Different provides a thorough and detailed (but hopefully not too complex) review of the economics of public stadium financing. I created this page to provide a more general summary of the major findings of economics research, explain common misunderstandings, and offer questions that journalists and policymakers should ask when evaluating stadium proposals. I provide links to relevant research (including chapters in my book) that you can investigate further.

Local leaders and team officials often pitch stadiums and arenas as economic development catalysts, promising increased commercial activity that brings new jobs, increased consumer spending, higher property values, neighborhood revitalization, and additional tax revenue. Though hosted events are associated with spending in and around venues, the relevant policy question is whether they create net new economic activity that would not otherwise have occurred; and if any gains exist, do they exceed the full public cost.

The evidence provides a clear answer: stadiums do not generate economic benefits large enough to justify the public subsidies they typically receive. A recent review of more than 100 peer-reviewed studies concluded:

Nearly all empirical studies find little to no tangible impacts of sports teams and facilities on local economic activity, and the level of venue subsidies typically provided far exceeds any observed economic benefits. In total, the deep agreement in research findings demonstrates that sports venues are not an appropriate channel for local economic development policy.

This finding may seem odd, because the spending in and around stadiums is easily observable. However, it fails to increase overall economic output because much of it is redirected from other local entertainment and consumption. Money spent at a game is often money that area residents would have spent somewhere else in the community. When researchers account for the reallocation of existing local economic activity, the estimated economic effects are usually small.

The key takeaway: Stadiums may create visible activity near a venue, but decades of research find that their economic and social benefits are generally too small to justify the public subsidies they receive.

FAQ: The Economics of Stadiums

Is there an economic consensus about public policy regarding stadium subsidies?

Yes. The prevailing conclusion among economists who study stadiums is that professional sports facilities are generally inadvisable public investments. For example, a 2017 University of Chicago panel of economic experts overwhelmingly agreed with the statement “Providing state and local subsidies to build stadiums for professional sports teams is likely to cost the relevant taxpayers more than any local economic benefits that are generated.”

That conclusion does not mean that every stadium has identical effects or that sports teams have no social value. It reflects the consistent finding that measurable economic and fiscal benefits, combined with estimated intangible benefits, are normally smaller than the public costs of subsidized stadium projects.

Related research:

Do stadiums generate economic benefits for host communities?

The general finding from peer-reviewed economic research is that professional sports facilities have little measurable effect on metropolitan income, employment, or overall economic activity.

A stadium may increase spending at nearby bars, restaurants, hotels, and entertainment businesses. A team or developer may also profit from the venue and surrounding real estate, but localized gains do not necessarily represent growth for the broader community. Activity simply moves from one neighborhood, business, or entertainment option to another.

The most important distinction is between:

  • Gross spending: all spending associated with the stadium or development.
  • Net new spending: spending and income that would not have occurred in the local economy without the project.

Economic benefit claims often emphasize the first measure. Public policy should be evaluated using the second.

What is “crowding out”?

Crowding out (sometimes referred to as the substitution effect) occurs when consumers shift spending from one local activity to another.

For example, a resident who spends $150 attending a game may reduce spending at restaurants, movies, concerts, retail stores, or other entertainment options. The stadium records $150 in activity, but the metropolitan economy has not necessarily gained $150. Much of the spending has changed location rather than increased total local spending.

Crowding out is one reason why stadiums can appear economically important at the project site while producing little measurable growth across the larger region.

Related research:

Do stadiums create jobs?

Building and operating a venue requires workers; however, the relevant question is whether the project produces a lasting net increase in local employment. Several factors limit the effect:

  • The jobs created to serve stadium patrons reflect the reallocation of spending from other local businesses; thus, they represent shifted employment, not net new jobs.
  • Most stadium jobs are part-time, seasonal, or tied to a limited number of event days.
  • Stadium construction requires many skilled and highly paid workers, but this does not necessarily represent a net employment gain; it may instead shift workers from other construction projects.
  • Commissioned economic impact reports often count all jobs connected to a project without subtracting jobs displaced elsewhere.

A useful evaluation should separate temporary and permanent employment, report full-time-equivalent positions, and explain how many jobs are genuinely new to the region.

Related research:

Do stadiums pay for themselves through tax revenue?

They generally do not.

A stadium can generate sales, hotel, property, income, admissions, and other tax revenue. But taxes collected at or near a project are not necessarily taxes created by the project. Some of the underlying activity would have occurred elsewhere in the jurisdiction without the stadium.

A proper fiscal analysis should compare:

Incremental public revenue caused by the project minus the full incremental public cost of the project

Full public costs include:

  • Direct construction subsidies
  • Land acquisition and site preparation (including roads, utilities, parking, and transit)
  • Tax exemptions and tax abatements
  • Ongoing operations (including public safety and traffic management)
  • Maintaining the facility, which often stipulates future renovations and capital improvements to meet “first-class” and “state-of-the-art” condition requirements
  • Opportunity costs from committing public resources elsewhere

Related research:

How do commissioned economic impact studies differ from academic research?

Proposed stadium projects are frequently accompanied by commissioned economic/fiscal impact reports. Though they are often referred to as “studies,” the estimates they present are not comparable to objective peer-reviewed studies conducted by academic researchers, which consistently find limited economic impacts. These forecasts are created by consultants hired by project advocates seeking to bolster their case for public subsidies; thus, the seemingly independent assessments present motivated analysis with the goal of promoting the desired stadium project.

Commissioned reports are typically forward-looking, based on a host of assumptions about what might happen in the future. This isn’t how economic researchers study economic effects. The strongest evidence on stadium effects is retrospective, examining actual outcomes from completed projects, and retrospective studies consistently find no positive economic effects. Private consulting reports almost always forecast large economic benefits, even though positive outcomes are rarely observed in historical experiences.

The reality is that there is no reliable method for projecting the future economic outcomes of stadium projects—it simply does not exist. Any consultant who claims to project positive economic returns should be asked to provide examples of past analyses of stadium projects that produced reliable forecasts. Until such a tool is developed, policymakers should rely on the results of academic economic studies that consistently demonstrate that sports venues do not generate significant economic benefits.

Related research:

What errors commonly appear in stadium impact reports?

Public policy researchers have reviewed commissioned economic impact reports to identify their failure to accurately forecast economic outcomes, finding that they often commit the following errors:

  • Treating gross consumer spending as new spending.
    • This ignores displaced local activity.
  • Using multipliers that increase projected output through so-called “induced spending.”
    • For stadium spending, which largely reallocates existing local spending rather than creating new spending, credible local multipliers should not exceed 1. A multiplier of 1.3 may appear modest, but it increases the forecasted economic impact by 30%.
  • Focusing on benefits without including all public costs.
  • Assuming that a stadium will stimulate surrounding economic development, which will generate enough tax revenue to cover the cost of the public contribution.
    • Stadiums are generally poor development anchors. I am not aware of a credible retrospective study finding that a publicly subsidized professional sports venue generated enough incremental tax revenue to cover its full public cost. If you know of one, please share it with me.
  • Assuming that all out-of-town spectators travel to the city for the events they attend.
    • A large share of visiting attendees did not come to town for the event, because attending the event was only one of several activities they chose while already visiting the area.

Related research:

Do mixed-use stadium developments change the economic case for public funding?

Mixed-use developments combine a stadium with apartments, offices, hotels, restaurants, retail, and entertainment. These projects can create successful and attractive districts. But adding mixed-use development does not materially improve the economic case for public funding.

The Atlanta Braves’ Truist Park in Cobb County, Georgia is often cited as a successful public investment because it was constructed with The Battery Atlanta mixed-use development. Though it is touted as unique, it’s an old idea. For example, in 1890 St. Louis Browns owner Chris Von der Ahe added a honky-tonk, wine room, and amusement park outside his stadium, marketing it as “the Coney Island of the West.” When the Houston Astrodome opened in 1965 it was part of the larger Astrodomain development, which included shopping, hotels, and an amusement park.

Mixed-use developments connected to sports venues have not always proved to be successes, either. Glendale, Arizona’s Westgate City Center entertainment district outside Gila River Arena and State Farm Stadium was foreclosed upon in 2011. Kansas City’s Power & Light District situated next to the T-Mobile Center basketball arena has been such a consistent money loser, that its city manager stated, “I don’t think there will be a point at any time in the foreseeable future, probably the next 20 years, where it actually pays for itself.”

Related research:

Has Truist Park generated a positive return on Cobb’s public investment?

Though The Battery development has been lucrative for the Atlanta Braves, Truist Park has been unsuccessful at generating a positive return to cover Cobb County’s construction and operating costs. My review of Cobb financial data shows that the stadium operates with an annual deficit of approximately $15 million per year.

County leaders claim that the stadium-development generates enough revenue to cover the taxpayers’ investment in Truist Park; however, the accounting comparison that the Cobb officials use to show the stadium is a net fiscal positive only looks at the public contribution through property taxes. This is inappropriate, because a majority of the government funding comes from non-property tax sources. When the additional public contributions from special district, hotel, and car rental taxes are included, the net return is negative. It’s unsurprising that the individuals who advocated on behalf of the Braves stadium project maintain that it has paid off, but the government’s own numbers show that this is not the case.

The Cobb Chamber of Commerce and the Atlanta Braves have also commissioned studies that purport to show that the stadium has been an economic success. These analyses contain serious methodological errors and were commissioned by organizations that supported the project. I have reviewed and responded to all such claims, demonstrating why they are not credible. My studies of the Cobb stadium project have been peer reviewed by other scholars and none of them have received a rebuttal.

Related research:

Do stadiums increase nearby property values?

Studies of the effects of stadiums on property values are somewhat mixed, with the direction and size of the effect being ambiguous.

Potential positive effects:

  • Development of underused land, which may include bars, restaurants, and other sports-complementary establishments.
  • Increased business activity in the area.

Potential negative effects:

  • Congestion, noise, and crime on event days.
  • Deterring businesses like grocery stores, retail shops, and offices from locating in the area due to game-day disruptions.
  • Increased tax burdens.

Even when property values rise near a venue, three additional questions matter:

  1. Did the stadium cause the increase? Stadiums tend to be located in growing cities and areas that are primed for redevelopment. Thus, even when property values increase, it is not clear that stadiums caused the growth. Econometric methods designed for identifying causal effects often find that property value growth around stadiums is not attributable to the stadium itself.

  2. Did gains near the venue come partly at the expense of other locations? If a stadium is responsible for some new commercial activity in the neighborhood, it may come at the expense of businesses elsewhere in the jurisdiction. Research suggests that development effects are limited to approximately 1 mile from the venue, and often draw customers away from competing establishments located in the same community.

  3. Did additional tax revenue approach the size of the public subsidy? Even when a stadium project has net positive commercial effects on the jurisdiction, it is normally not sufficient to cover the public cost.

Though stadiums may foster some development of complementary enterprises, the negative effects may be greater. Thus, there is no general expectation that a proposed stadium project will increase nearby property values.

Related research:

Do stadiums help nearby businesses?

Some nearby businesses may benefit substantially, especially restaurants, bars, hotels, parking operators, and entertainment establishments that serve stadium visitors.

But business-level gains should not automatically be interpreted as community-wide economic growth. Other local businesses may lose spending, and some existing businesses near the venue may be displaced by redevelopment, rising rents, congestion, or changes in the customer base.

A complete analysis should distinguish between:

  • Benefits to nearby businesses versus losses to competing local establishments.
  • Improvements within the immediate area versus net changes across the entire jurisdiction.
  • Gains captured by private team owners versus returns that flow to taxpayers.

Related research:

Are minor-league stadiums different?

The economics of minor-league stadiums is the same as it is for major-league venues. Stadium-related spending is mostly reallocated from other local spending, and thus does not reflect increased economic activity.

Minor-league stadiums are smaller and usually cost less than major-league venues, but they also generate less revenue and attract fewer visitors. Their lower cost does not necessarily make them good public investments. This is especially true in smaller communities that do not have a large tax base that can absorb the losses.

Public contributions should be evaluated relative to realistic benefits rather than compared only with the much larger subsidies provided to major-league teams. Academic studies of minor-league venues generally do not identify net positive returns.

Related research:

What about tourism and visitors from outside the area?

Sports events do attract some visitors from out of the area, which may represent new spending imported into the local economy; however, the tourism effects from sports have been estimated to be small. Most of the attendees of professional sports games are local residents.

Not all out-of-town spectators represent net new spending:

  • Casual visitors: Visitors who chose to attend a sports event among many potential leisure options (e.g., dining out at a local restaurant or visiting a local attraction) represent a reallocation of tourist spending.
  • Time-switchers: Attendees who adjust their visits to coincide with games also would have otherwise spent their money in the area. For example, grandparents may choose to visit their grandchildren during the baseball season in order to catch a game, rather than visiting during Thanksgiving.

The benefits of attracting visitors are also not evenly distributed across the hospitality industry. For example, hotel taxes that are often used to fund sports projects are typically paid by all hotels in the jurisdiction. However, the benefits tend to accrue to lodging establishments close to event venues at the expense of hotels further away. Even if some positive tourism effects exist, a recent economic study concluded:

“The evidence suggests that increased tourism, and associated increased tourism-related tax revenue, is a rather tenuous reason to justify public subsidies of venues and events.”

Special mega-events like the Super Bowl, Olympics, or World Cup do attract many visitors to cities; however, not all visitors represent a net increase in tourist activity. Mega-event hosts are chosen because of their capacity to serve visitors, and thus most events displaced tourist activity that otherwise would be happening. For example, a Super Bowl hosted in Florida will displace visitors seeking a sunny refuge during winter. And while tourism generally increases at the time of the event, there is normally a hangover effect after the event that results in decreased visitors. In general, the net tourism effect of hosting premier mega-events is positive, but the gains are typically less than the subsidies provided to host the event. For example, a survey of studies of the economic effects of mega-events concluded:

“mega-events can have a positive influence on visitor growth and on the image of the host as a tourist destination. However, this positive impact tends to be short-lived, conditional and well below ex-ante expectations…. Overall, the supposed economic benefits of hosting an event are vastly overstated in ex-ante studies. In practice, the real benefits are outweighed by the costs associated with event preparation.”

Related research:

What about civic pride and quality-of-life benefits?

Sports teams can generate real benefits that do not appear in conventional measures of income or tax revenue. Residents may value civic identity, community pride, media visibility, and the option to attend games even when they rarely visit the stadium. Economic research does not require these benefits to be ignored. The question is how large they are relative to the subsidy.

Although it is not as widely known, because the fiscal case is most often used to bolster the policy case for stadium subsidies, economists have studied the intangible benefits of hosting sports teams and events extensively. Because citizen values are not priced by market transactions, economists have used three approaches to measure these social benefits.

  1. Consumer surveys. Economists have borrowed a tool that environmental economists use for valuing non-consumption benefits of natural assets, such as wildlife preserves and national parks. The contingent valuation method (CVM) estimates the willingness to pay for non-consumption benefits of hosting a sports team (like the pride that comes from living in a “big-league city”) by administering a series of survey questions. Existing studies generally find that intangible benefits are positive in some communities but far below the hundreds of millions—or billions—of dollars now commonly committed to stadium projects. These benefits may support some public contribution, perhaps tens of millions of dollars. A review of CVM estimates of intangible benefits from hosting teams indicates that the social value amounts to less than 20% of the subsidies provided.

  2. Property values. If citizens value living in communities with sports teams, then they should be willing to pay higher prices for homes in cities with sports teams. As noted above, the effects of teams and venues on property values are ambiguous, which is consistent with CVM estimates that indicate the social benefits are relatively small.

  3. Voting. A common method for valuing unpriced community assets is to vote on them. Votes on stadium projects do not produce consistent results, which may depend on the size of the subsidy requested, location, and type of venue. However, voters are much more likely to oppose public stadium projects than representative bodies.

It is my view that voter referendums offer the best mechanism for assessing how much community members are willing to pay to subsidize sports venues.

Related research:

If sports venues are such bad public investments, then why do governments continue to subsidize them?

The long-dominant theory among economists for why stadium subsidies persist is the monopoly power of sports leagues. By restricting the number of teams, owners can extract subsidies by threatening to move to new markets. Though this is an elegant theory that might seem to explain the prevalence of subsidies; in practice, it does not fit with the stylized facts.

  1. Subsidy allocations have been increasing at an increasing rate at the same time that US major sports leagues have been expanding. If relocation threats were driving subsidies, then subsidies should be decreasing as the number of available relocation cities diminished.

  2. It’s common for subsidies to be granted without any relocation threat. For example, the Atlanta Falcons received a $700 million subsidy to construct Mercedes-Benz Stadium, without threatening to move out of the city. Furthermore, many stadium deals are negotiated in secret, rather than determined through an open auction among cities to boost subsidy offers from competing locations. Instead, alternate cities are floated as possible new locations that a team might consider, and are often promoted by local leaders as a pretext for supporting subsidies. Explicit threats to move a team can harm the relationship with fans. Furthermore, most teams are located in the largest markets; therefore, relocation means moving to a smaller and less-lucrative market. Most relocation discussions are cheap talk, not realistic or credible threats.

For these reasons, monopoly power does not appear to be the primary driver of venue subsidies.

I make the case in This One Will Be Different that the chief culprit is politicians, who value the perks associated with supporting the local sports teams. Access to exclusive events and spaces, while hobnobbing with local insiders and celebrities, provides substantial benefits to elected officials, who can pass much of the costs onto taxpayers. The fondness for sports among civic boosters (aka, the local growth coalition), who have considerable sway in local policy debates, reinforces the favorable disposition of government leaders.

Related research:

What steps can individuals take to stop stadium subsidies?

In This One Will Be Different I offer advice to four key constituencies for combatting public stadium proposals.

  • Economists: Continue to research and speak out to inform the public about the economics of stadiums.
  • Policymakers: All stadium proposals should be put to a public vote.
    • This lessens the influence of politicians’ generally favorable view of sports.
    • Allows citizens to express how much intangible value they place on hosting teams.
  • Media Members: Provide appropriate critical coverage of public stadium proposals.
    • Avoid “bothsides” reporting that pits non-credible commissioned reports against credible economics research.
  • Citizens: Grassroots coalitions often play a key role in stopping public stadium proposals.

Related research:

  • This One Will Be Different, Chapter 28 by J.C. Bradbury

How should journalists approach public stadium proposals?

  • Be skeptical. 50 years of economics research consistently finds stadiums do not generate large economic benefits. You should immediately question the claim that “this one will be different.”
  • Bring in credible outside experts. Stadium financing is complex and not easy to understand. Reach out to a local university economics professor , preferably one with a record of publishing research on public finance.
  • Do not take commissioned economic impact studies at face value. Commissioned studies are advocacy documents, not independent research. Their estimates should not be presented as equivalent to peer-reviewed economic evidence or as offering an equally credible perspective.
  • Avoid false balance. Reporting on stadium projects often results in bothsidesism, in which the non-credible commissioned reports are balanced against credible economics research. Your coverage should give accurate weight to the evidence, not equal weight.

Related research:

Questions journalists should ask about a stadium proposal

Before reporting claims about a stadium’s economic benefits, journalists should ask:

  • What is the full public cost? Don’t report the announced construction subsidy only. Include land, infrastructure, tax exemptions, financing, maintenance, and future renovations.

  • Are the claimed benefits gross or net? Does the forecasted increase in economic activity at the stadium account for spending reallocated from other local businesses?

  • Who paid for the economic impact report? A forecast commissioned by the team, developer, or project advocates should not be treated as equivalent to peer-reviewed academic research. Ask whether the same method has accurately predicted outcomes at previous stadium projects. If no examples are provided, this should be noted in your reporting.

  • What assumptions drive the estimate? Examine attendance, visitor spending, job creation, surrounding development, and economic multipliers. All assumptions should be clearly explained and supported with evidence.

  • Who receives the revenue and who bears the risk? Identify who controls tickets, naming rights, parking, concessions, and surrounding real estate. Who pays if costs rise or revenues fall short of projections?

  • Are mixed-use development gains being attributed to the stadium? Apartments, hotels, offices, and restaurants may be viable without the venue or public subsidy.

  • What happened at comparable projects? Compare the forecast with independent retrospective studies that measure actual changes in employment, income, tax revenue, property values, and tourism.

Related research:

Last reviewed: July 2026

About the author

J.C. Bradbury is a professor of economics at Kennesaw State University. His research focuses on sports economics, public finance, and local economic-development policy. He is the author of This One Will Be Different: False Promises and Fiscal Realities of Publicly Funded Stadiums, published by Oxford University Press.