For a discipline known for its disagreement, the strong consensus among economists on the economic impotence of sports stadiums and events is striking.
The findings may seem puzzling: How can the dollars spent on tickets, concessions, and patronizing nearby restaurants and stores not benefit the local economy? The answer is quite simple: most people who attend sporting events live and work near the stadium. Rather than inducing new spending, patrons are reallocating their spending from other local consumption options (movies, restaurants, shopping, etc.) to attend games. And while there may be some influx of new spending, other locals choose to avoid the crowds and spend their money elsewhere. The studies show that net impact is a reshuffling of local dollars, not increased economic activity.
Truist Park boosters have argued that the stadium’s mixed-use development (The Battery) makes it different from standalone stadiums that have failed to live up to their economic promises. However, gains have not been evident in property values for businesses near the stadium or throughout Cobb, which have progressed similarly to the rest of metro Atlanta. Sales tax revenue has increased slightly since the stadium opened, but the gains have been small, with approximately one-third of spending at the Battery coming at the expense of other Cobb businesses.
In total, any added economic activity has fallen well short of covering the costs to taxpayers.
I do not intend to dampen the World Series celebration, but erroneous claims of economic windfalls have policy consequences that should be checked. Local governments often cover significant stadium construction costs based on false promises of economic benefits; therefore, it’s important to acknowledge that hosting sports events does not confer significant economic benefits to host communities.
Like most of my Cobb neighbors, I’ll be rooting hard for the Braves to bring home another World Series title, but we can do so without the pretense that hosting the team or the extra games are making us any richer.
J.C. Bradbury is professor of economics at Kennesaw State University and is an affiliate of the Bagwell Center for the Study of Markets and Economic Opportunity.