The Era of Billion Dollar Sports Boondoggles Is Here
The Era of Billion Dollar Sports Boondoggles Is Here
Virginia is for lovers of very large sports subsidies.
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Back when my book came out, in the far-off days of 2019, Nevada held the record for the largest public sports stadium subsidy in history, having approved $750 million in taxpayer funding for the Las Vegas Raiders’ Allegiant Stadium.
Fast-forward to the end of 2023, and Nevada doesn’t hold the record anymore. Not even close, in fact. Last year, the Buffalo Bills received more than $1 billion for a new stadium, a record which the Tennessee Titans quickly eclipsed with a $1.2 billion deal this year.
And the ante keeps being upped. Last week, Ted Leonsis, the owner of the NHL’s Washington Capitals and NBA’s Washington Wizards, announced a tentative agreement to move those two franchises out of downtown Washington, D.C., and into a new entertainment complex in Alexandria, Virginia. The price tag on that move, if it is approved by both the Virginia legislature and the Alexandria city council, would come in at a cool $1.35 billion.
If two is a coincidence but three a trend, as the saying goes, then the trend is here: We’ve reached the era of billion dollar sports boondoggles.
Now, this an imperfect way of framing it, to be sure, since inflation counts for something. The 1976 Olympic Stadium in Montreal, for instance, cost more than $1 billion in 2023 dollars.
But still, the psychology of consistently crossing the billion-dollar bound will certainly be real and have an impact: If $1 billion is the new normal, it’s what the owners of professional sports teams are going to expect whenever a new stadium is in the offing. Just as franchise values keep climbing, with billions being the new price tag to buy into that exclusive club, so too it seems, will public arena subsidies.
As a reminder, the consensus among everyone who has studied publicly funded sports facilities is that they provide none of the promised economic benefits. Those illusory positive effects for the local population are merely the grease used to justify deals by politicians who don’t want to be the ones to see treasured franchises leave town on their watch, or who are simply to in thrall to the billionaire class.
The interesting and infuriating thing about the Caps/Wizards deal — aside from the fact that the Washington, D.C., mayor and city council managed to dig up a $500 million counteroffer to Leonsis overnight, when days earlier the mayor had been arguing the city doesn’t have $40 million available to pay legally required food assistance benefits — is that it’s barely about an arena at all.
What Leonsis is drawn to is the ability to create an entire entertainment district around the arena from which he will be able to profit; it’s a real estate deal that happens to involve two pro sports teams. Leonsis’ corporation, Monumental Sports, reportedly intends to build a broadcasting studio, pro video gaming facility, and performing arts venue in the district, as well as controlling the ancillary retailing and restaurant scenes on the 70 acre site.
No matter what D.C. offered, it couldn’t offer that. Capital One Arena, where the Capitals and Wizards currently play (and which Leonsis says he intends to still own and run after those teams leave) is downtown, surrounded by the actual city. Leonsis can’t own an entire sports empire there without knocking down the National Portrait Gallery.
The blame game in D.C., where I live, has been pretty hot and heavy since Leonsis made his announcement alongside Virginia Gov. Glenn Youngkin (and without, apparently, the input of the head of D.C.’s metro system, hilariously). But while many are pointing the finger at the mayor or the city council for not paying enough attention to the threat that the team would leave, or for not doing enough to address crime in the neighborhood around the arena, the simple fact, for me, is this: Leonsis is a billionaire with two profitable sports franchises, but he wanted more. And more wasn’t possible within the confines of a downtown arena, so he’s moving his teams. Full stop.
This is where many pro sports owners clearly want to go: Not just having a team and an arena, but an entire domain to call their own. Which is fine, so long as they pay for them themselves, as the owner of the Los Angeles Rams did in California. A massive profit-generating center should be paid for by those set to profit from it. But owners have made subsidies for arenas and stadiums the cost of doing business, and now they’re set to add a full entertainment district on top.
Now, as I said, the Caps/Wizards deal isn’t a done one. One Virginia state senator said yesterday, “Anyone who thinks I am going to approve an arena in Northern Virginia using state tax dollars before we deliver on toll relief and for public schools in Hampton Roads must think I have dumbass written on my forehead.” There’s also a burgeoning movement amongst the folks who live around the proposed arena district to block it, fearing the traffic and hoopla will negatively affect their quality of life.
In the grander sense, though, opponents of public stadium subsidies are still facing a nexus of pliant politicians, billionaire greed, media malpractice, sophisticated PR machines, and the simple fact that sports teams never feel like the corporations they are to the communities in which they play. Even putting subsidies up for a public vote, which tends to work out for taxpayers, isn’t a guarantee of victory, as Oklahoma City just showed.
But if billion is the new normal, that means a lot of public money is potentially headed out the door, if we don’t keep up the fight.
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— Pat Garofalo
What you wrote is very true - but how is this any different than the cable schemes underwriting massive sports spending like the Yankees and Dodgers? Or many other sports?
I've been reading Field of Schemes blog for years and this grift never ends. So tired of politicians giving away out tax money to billionaires (usually with no public vote) when they can build their own stuff.
It works in California! Say no and they'll "find" the money.....