The Lies They Tell Us to Sell Pro Sports Stadium Subsidies

An NFL stadium boondoggle right in my own backyard.

Photo credit: All-Pro Reels

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I’ve spent a lot of time following and writing about various professional sports stadium boondoggles. There’s an entire chapter in my book entitled “The Stadium Swindle.”

And now I get to experience one of these debates in real-time, in the city where I live, thanks to Washington, D.C., Mayor Muriel Bowser announcing this week that her administration struck a deal with the owners of the NFL’s Washington Commanders to bring the franchise back into the District from its current home in Landover, Maryland — thanks, in part, to more than $1 billion in public money that will be put toward the infrastructure and construction to support a new stadium and the surrounding entertainment and residential district envisioned under the deal.

Those in favor of the stadium deal have fired up the spin machine, attempting to paint it as a fait accompli, which is straight out of the stadium subsidy booster playbook. But to be clear, it’s nothing of the sort: The D.C. council needs to approve the use of public money, and there are at least several members who are either firmly or somewhat on the “no” side at the moment.

Thus, I think it’s important to cut through the spin and break down the lies we are being told, as residents here in the nation’s capital, about why this deal will pay off for the city. I obviously have a personal interest in this particular stadium subsidy fight, but I hope this will also be useful as a compendium for future pro sports subsidy debates, because they tend to follow a similar arc and rely on similar falsehoods no matter the locale.

1. LIE #1: Pro sports stadiums provide a local economic boost. D.C. faces a shortfall of $1 billion over the next four years, and is staring down a slew of budget cuts thanks to Republicans in Congress failing to fix a bizarro situation they created with the D.C. budget. Yet somehow Bowser managed to find more than $1 billion in the couch cushions to offer Commanders owner Josh Harris to entice him to move the team. In order to justify that expenditure, stadium boosters are making the age-old claim that the stadium will provide an economic boost to the city, both in terms of revenue and attached economic activity. But don’t buy it: An exhaustive amount of economic research shows pro sports stadiums don’t provide a meaningful economic impact to their host cities. Stadiums and arenas mostly just shuffle money around that would have been spent in the local economy anyway. As one analysis of decades of economic studies put it, “The empirical evidence is unambiguous: Stadiums do not confer large positive economic or social benefits on host communities.” Read this, which I wrote with my neighbor Nick Sementelli, for a fuller discussion of the research.

2. LIE #2: Stadium deals are necessary to attract large events such as the Super Bowl or a Taylor Swift concert. Many D.C. residents are still a bit miffed that Taylor Swift passed by the D.C. region on her recent “Eras” tour. A Swift concert, plus winning the right to host the Super Bowl or World Cup games, are some of the headline reasons boosters are tossing around to justify the stadium being in the District and paid for by the public. Leaving aside that a privately-financed stadium could attract those events just as well as a publicly-funded one, there’s no reason D.C. — or really, any other city — needs to be obsessed with mega-events: In the context of the D.C. metro area’s $700 billion GDP, they’re a drop in the economic impact bucket. Many studies have shown those events don’t move the economic needle much, if at all, even for smaller cities with less going for them. Even if they did provide a meaningful impact, there simply aren’t enough of those big events to justify a massive expenditure from the taxpayer. Indeed, it’s worth remembering that an NFL stadium is dark and empty the overwhelming majority of the time: The ones that are used the most often still only attract about 40 events a year, and the rest attract 20 or fewer. So the occasional giant concert tour or championship game can’t justify a large, ongoing cost to the public, as much fun as those events might be. Plus, D.C. is already a city with plenty of world class tourist attractions — hosting a Super Bowl is not necessary to get people to come to the capital of the United States.

3. LIE #3: Stadiums are needed as an “anchor” for neighborhood redevelopment. In 1997, the Commanders (then playing under a different name, of course) left D.C. for the Maryland suburbs. Their former home, RFK Stadium, was used by D.C. United and the Washington Nationals before both of those teams moved into new publicly-funded stadiums, leaving RFK to rot. In the intervening years, D.C. has had quite the economic renaissance, including in the neighborhoods abutting the new stadiums. Thus, the stadium is a necessary “anchor,” as Ward 7 Council Member Wendell Felder, who represents the RFK area, put it. However, Ward 6 Council Member Charles Allen’s rebuttal is the right one: So many neighborhoods without stadiums or other publicly-funded mega-projects have developed just fine that it’s ludicrous to think a stadium (or any public mega-project, to be honest) is necessary. “The stadium is a luxury item,” Allen said. More than that, the stadium will take up loads of valuable space that could be used for the sort of development most public officials claim they actually want: Housing, local businesses, and amenities that members of the community can use on a daily basis. Banking public money off a stadium is not a necessary precursor for building any of those things; in fact, it boxes them out.

4. LIE #4: “It’s just infrastructure.” Bowser and the Commanders’ ownership have been going to great lengths to claim that the stadium’s direct construction costs will be covered by the franchise, with the public only pitching in for site preparation and adjacent infrastructure. Some pundits such as Matt Yglesias are using a version of the same logic to justify backing the deal, arguing that since some infrastructure investments will be necessary regardless, the actual costs to the public aren’t as high as folks like me claim. But while there would indeed be public spending on the site even without a stadium, it would look very different, and likely be far cheaper, than it will be with a stadium. For example, $350 million in taxpayer money will go into parking lots on the site alone! And $500 in site prep is prep for a stadium, specifically, not for general use, including items such as the foundation and stairs. Something close to zero percent of that money would be spent in those specific ways without the stadium. Ultimately, boosters act like the stadium is necessary to shake loose the rest of the infrastructure spending or housing development that genuinely does benefit more residents of the city, but the city can do the latter without the former.

5. LIE #5: The percentage of the deal that’s public matters. Deal boosters are also claiming that because the D.C. public is covering a lower percentage of the overall stadium costs than the public paid in other recent stadium deals, D.C. is not getting fleeced. But that’s only because the particular stadium Harris has envisioned is really expensive! In pure dollar terms, the headline number puts D.C.’s deal as the second-most expensive in history, and if it does hit $1.5-$3 billion — which it could! — it would climb into the top spot. The percentage is simply irrelevant as an indicator As Nick Sementelli put it, “This is like the mob coming to your store and telling you all the other stores on the block got fleeced, but we've got a special shakedown price just for you.”

As the Sports Fans Coalition put it, “This isn't an ‘investment’ — it's a robbery. It’s a transfer of wealth from DC's working families to a Wall Street billionaire. It’s the rich getting richer while our schools, safety, and transit systems fall apart.”

There is a coalition (which, full disclosure, I have worked with) opposing the deal, as well as an attempt to organize a ballot initiative putting public funding for the stadium up for a vote. But step one is cutting through the nonsense we’re being served, which I hope I achieved just a little bit here.

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SIMPLY STATED: Here are links to a few stories that caught my eye this week.

• North Dakota is the first state to enact a law protecting pesticide manufacturers from lawsuits over allegations that they provided insufficient warning regarding cancer risks.

• The Arizona legislature approved a fist-in-the-nation bill allowing the state treasurer and retirement system to invest public money in cryptocurrency, sending it to the governor.

• Other states are fed up with Montana for allowing out-of-state drivers to dodge taxes and fees by purchasing and registering their vehicles there.

• Michigan Attorney General Dana Nessel is suing two pharmacy benefit managers (PBMs) for allegedly colluding to drive down reimbursements to pharmacies.

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— Pat Garofalo