On Sep. 18, the mayor of Philadelphia, Cherelle Parker, announced that the city had reached a deal to construct the Philadelphia 76ers’ new $1.3 billion arena downtown. This follows a string of new stadium announcements from major league sports teams in recent years. The Tenessee Titans, Buffalo Bills, Kansas City Royals, and Chicago Bears have all put forth plans for new stadiums in the next few years.
Although Mayor Parker described the deal as the “best agreement, best deal for our city right now,” the decision to build a new sports center is not a simple choice. Sports teams occupy a unique position in their home city: While they are influential, globally recognized brands, they are also heavily involved in their home city’s economic growth. A team’s decision to build a new stadium automatically precipitates ripple effects within their local community.
But why do teams decide to build a new stadium in the first place? They are clearly expensive — the Buffalo Bills’ stadium will total to $1.7 billion and the Tenessee Titans will spend about $2.2 billion on theirs.
The approaching expiration dates on old stadiums is one factor leading teams to seriously consider the costs. The typical 30 to 50 year lifespan of a stadium means that the wave of stadiums built in the ‘90s is due for an upgrade in the next decade. These new stadiums are far more expensive due to inflation but also the expectations of newer facilities by the patrons. Teams are forced to update their facilities to increase capacity, keep up with modern technology, and supply amenities to keep fans comfortable. They also want to rent these facilities out throughout the week and generate extra revenue, instead of leaving them empty outside of game-day. While this may help pay for the cost of the stadium in the long-run, it will raise the building cost of the stadium in order to accommodate other events.
The lavishness of new stadiums is reflected in their cost. Owners of sports teams hope it is an investment that attracts more people to the stadium and ultimately, more profit. Unfortunately, the responsibility to actually pay the cost typically falls in part on the shoulders of the public.
In order to meet the high price tag of these new stadiums, teams often turn to the city, and subsequently, taxes to fund their builds. It is estimated that between 1973 and 2020, taxpayers have covered 73% of all venue construction costs. This often comes in the form of subsidies given out by states and local governments to entice teams to build in their city.
The logic of stadium subsidies lies in the economic growth teams promise for a city. Stadium construction is touted as a job creator and a tourist and business attractor. Those in support of stadium subsidies believe stadiums are self-financing due to the economic activity generated through ticket sales, concessions, venue rentals, and other uses.
Yet, studies have found that the actual benefits fall short of the ones teams promise. While some economic benefit may be generated for areas surrounding the stadium in certain cases, this increase in wealth only benefits one neighborhood — most of the residents footing the bill aren’t experiencing any tangible positive economic effects.
When the overflowing pockets of sports teams’ owners are considered, the use of stadium subsidies becomes a moot point. Given this, you would think stadium subsidies would be nonexistent in the funding formulas for recently proposed projects. However, economic questions quickly turn into political ones when politicians use subsidies to entice a team into building in a certain area.
While sports owners could shell out the money themselves, they can also simply leave the city and go somewhere that’s willing to subsidize their projects. This was seen back in 2017 when Columbus Crew Soccer Club’s then-owner, Anthony Precourt, threatened to move the team to Austin, Texas if a new stadium wasn’t built downtown.
With sports so ingrained in a city’s identity and the country’s culture, threats to leave are often met with a small but dedicated group of betrayed fans. Knowing this, local politicians continue to propose subsidies and work with teams, so they stay while simultaneously benefiting the incumbent’s re-election chances.
Although politicians sometimes work behind closed doors with teams to reach a deal, other times, fans and residents get a direct say in the matter of subsidies through their vote. For example, voters decided whether to implement a three-eighths cent sales tax for the next 40 years to fund a new Kansas City Royals ballpark and a new Kansas City Chiefs stadium. With over 58% against the referendum, taxpayers resoundingly rejected the publicly-funded proposal.
Plans for the Kansas City venues are on pause as the teams go back to the drawing board to either pitch a deal where private money takes on a larger monetary burden, or consider hearing pitches for subsidized stadiums from other cities.
But money alone won’t keep a team in or away from a city — community is arguably an equally important factor.
In the case of the 76ers, their proposed new stadium would be privately funded in full. But prior to Mayor Parker’s decision, thousands of protestors took to the streets and to town hall meetings to bring up another concern — the disruption it would cause to Philadelphia’s Chinatown.
Located in a historic district of downtown Philadelphia, Chinatown residents were wary of being pushed out of the area, having the surrounding region gentrified, and the increased traffic congestion in the middle of the city. When it becomes a battle of culture, one between a historically rich cultural area and an engrained social identity, the decision to construct becomes a lot more difficult.
But still, the supporters of stadiums highlighted the positive social impacts of keeping a team around. Local union chapters came out in strong support for the 76ers proposal, pointing to the numerous construction jobs created during the building process and the thousands of permanent and maintenance jobs that remained for the long-run.
And when a team is committed to staying in a city, they are also committed to interacting and investing in their surrounding communities. This can be seen in the Buffalo Bills’ new stadium deal, where the team will dedicate $3 million each year for the next 30 years towards “the social, educational, and economic health of Buffalo and Western New York.” The 76ers deal includes a $50 million Community Benefits Agreement, focused on developing and supporting impacted communities like Chinatown. Additionally, many stadiums look to utilize the spaces for community engagement events like concerts, college football games, and election-day polling locations.
At the end of the day, stadiums are the physical space that a team can call home, wherever that home may be. Although used as an economic, political, and social bargaining chip between competing values in cities, the construction of stadiums will ultimately depend on what identity a city wishes to embrace. It’s up to city residents to determine if the value in being called the “home of” a team is worth the sacrifice.
