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Study: Taxpayer-Backed NBA Arenas Don’t Help Local Economies

9:31 AM PDT on August 10, 2012

Over the last few decades, sports franchise owners have been hugely successful in convincing governments to give them money in the form of taxpayer-funded stadiums and arenas. A favored approach is to threaten to pull up stakes and move a team, and its attendant economic benefits, to another city.

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Though taxpayers are often left holding the bag for these new facilities, the ploy works time and again. It seems not many politicians want to be blamed for sending a beloved (or even not so beloved) team packing.

Erica C. Barnett at Network site PubliCola writes that a new study from George Washington University finds that professional basketball arenas, like one now proposed for Seattle (which recently lost its NBA team to Oklahoma City), are of questionable economic value to the public.

The study -- which looked exclusively at basketball-only and basketball-hockey multipurpose arenas -- found “no statistically significant association between having an NBA arena or an NBA franchise” and city residents’ personal income, a standard indicator of economic growth.

In particular, cities with sports other than basketball (like Seattle, which has soccer, pro football, college football, women’s basketball, and baseball teams, and could get a hockey team under the proposed arena deal) were unlikely to benefit economically from new basketball arenas.

Even in cases where basketball arenas do correspond with higher regional incomes, public tax subsidies for arenas tend to erase those gains. And the more recently an arena was built, the worse its economic impact is on the population.

Also on the Network today: Let's Go Ride A Bike wants to hear about your bike-share experiences; Second Avenue Sagas looks forward to not missing the New York MTA MetroCard; and BikingInLA shares a harrowing story of traffic justice denied.

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