Publicly funded stadia and their associated costs and benefits are making headlines in St. Louis, as they should. The ongoing debate about diverting taxpayer money from essential municipal services to wealthy developers and team owners is a critical one.
Both St. Louis and Kansas City are revisiting these discussions with increasing frequency. It appears the issue will be taken up in Jefferson City, too.
Recently, Jackson County voters rejected new sales taxes for the Kansas City Chiefs and Royals. Yet, various media outlets have reported that the owners of the St. Louis Cardinals might seek taxpayer funding for stadium renovations. Cardinals President Bill DeWitt has seemed hesitant to specify an amount, likely gauging the current public sentiment and recognizing this might not be the best time to make such a request.
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In contrast, CITY SC, St. Louis’s professional men’s soccer team, confidently issued an “economic impact study” asserting that their downtown stadium has created thousands of jobs and added billions to the local economy.
However, there are significant issues with this report. CITY SC in its public promotion of the information didn’t release the actual study, produced by the St. Louis planning firm PGAV. The graphics presented in a recent KMOV segment on the report claimed the stadium generated 5,300 jobs, $1.4 billion in development, and $122 million in tax revenue.
In that interview, CITY SC CEO Carolyn Kindle said, “We were all very, very, very surprised” by the results.
Such surprise is justified, given that substantial research indicates professional sports teams do not generate significant economic impacts.
A 2022 Journal of Economic Surveys study found “nearly all empirical studies find little to no tangible impacts of sports teams and facilities on local economic activity, and the level of venue subsidies typically provided far exceeds any observed economic benefits.”
An earlier study, published in The Berkeley Economic Review, was even more harsh: “The inescapable truth is that the economic impact of these projects on their communities is minimal, while they can be an obstacle to real development in local neighborhoods.”
They are an obstacle because too often — especially in Missouri — not only do the projects not deliver any benefits, they divert taxpayer funds that might otherwise be used for schools, infrastructure, and public safety.
Kindle promised to share the full study “when the time is right.” CITY SC has not yet done so. Our email requests for the report have gone unfulfilled. Responses indicate releasing the report “is something we will likely do in the future but timing is TBD.”
This lack of transparency makes it fair to wonder if the report contains the same flaws as other, similar analyses that count only spending at the venue and discount losses in spending elsewhere.
A recent effort in the Kansas legislature to lure the Chiefs and Royals to Kansas, and the reactions from Missouri, indicate that the whole state may be dragged into discussions about the economic value of professional sports franchises. There will be a lot more claims like the ones made by CITY SC that the economic impact of sports teams is significant.
Taxpayers should be skeptical of bold economic claims made by well-funded corporations like CITY SC, the Cardinals, the Chiefs, and the Royals, especially when these claims are not substantiated by transparent and truly independent analysis.
Journalists and elected leaders must serve the public interest by investigating these claims, questioning the authors and the assumptions made, and seeking out economists who have conducted their own research. Unfortunately, many of the individuals and businesses supporting public subsidies for sports teams may have direct financial or political interests in the outcome.
If the past is any indication, the public will be presented pretty architectural renderings accompanied by poorly constructed economic impact claims drafted by third-party organizations (and paid for by project supporters). There will be discussion of city or state pride, and threats that teams may leave if taxpayers don’t cave to their demands.
Often in discussions like this, political parties can serve as checks on one another. But Republicans and Democrats are equally bad on the issue of subsidies for wealthy team owners. Journalists aren’t always great, either. The result is that voters are not fully informed of the risks and rewards ahead of them.
Let’s all resolve to ask more questions and demand more answers. We are the Show-Me State, after all — it should be in our nature.