Stadium Subsidies Assignment

FMiller

Economics pt A

5/3/18

Stadium Subsidies Assignment

Introduction

Everywhere you go there are new stadiums are being built. The number one question is who is paying for these upgrades and why are these stadiums necessary? There was a new sports stadium development that happened in the 1990s. These stadiums were built mostly from government funds as stadium subsidies. Economists feel most of the stadiums generate costs other entertainment venues within the town. In this paper we address this issue.

What are the benefits to a town of building a new stadium? Building a new sports stadium will increase aggregate demand for our economy, creating available jobs, and increasing employment. This could lead to economic growth. Meanwhile,

More than $7 billion were spent on facilities for professional sports teams. Most of the $7 billion would come from public sources. Subsidy starts with our federal government that allows local and state governments to give tax-exempt bonds and help finance sports facilities. Tax exemption will lower interest on our debt and reduce the total amount that cities and teams have to pay for stadiums. The rate of interest reduction has been between 2.4 and 4.5 percentages. The loss in federal taxes for a $225 million stadium is about $70 million. Local and state governments paid way more subsidies than Washington. Sports facilities now cost the average city over$10 million every year. The most successful new baseball stadiums, costs residents Maryland $14 million each year. Renovations are expensive. Net gains to Baltimore’s economy for new jobs and tax revenues are about $3 million a year .this is not much of a return for a $200 million investment. Sports teams accumulate substantial revenues from the national licensing and broadcasting. These have to be balanced towards funds leaving the area. The main professional athletes do not stay where they play, so their pay is not locally spent. The annual economic improvement of the Denver Broncos was nearly $120