Despite not having a winning regular season record since 2017, the Carolina Panthers
and the City of Charlotte have just been named National Champions, but not in football.
The Center for Economic Accountability named the City of Charlotte winner of their
“Worst Economic Development Deal of the Year” award for 2024. The award is given
annually to the state or local government that gives the worst subsidy to a private
company claiming to promote job creation and economic growth. Charlotte “won” this
year’s award for their $650 million subsidy to renovate Bank of America Stadium, which
is home to the Carolina Panthers NFL team.
Such stadium subsidies are not unusual. Nearly all professional sports teams receive
government subsidies to build or renovate their stadiums. Over the past 34 years,
taxpayers have spent nearly $30 billion on stadium subsidies. In 2023, the Tennessee
Titans set the all-time record for a stadium subsidy at $1.26 billion to build a new
stadium in Nashville, TN. The Buffalo Bills secured approximately $850 million in state
and local funding for their new stadium in 2022, and the Tampa Bay Rays are
renegotiating their deal to build a new stadium after Tropicana Field sustained millions
of dollars in damage during Hurricane Milton.
Proponents of stadium subsidies argue that the sports venues, which often host
concerts and other events, create economic growth by bringing fans to the stadium who
then spend money in the surrounding area on restaurants, bars, hotels, etc., which in
turn creates jobs for the local community. However, economists who study the topic
almost unanimously disagree. They argue that the stadiums displace businesses that
would otherwise be in that location, and that if consumers were not spending money in
and around the stadium during events, they would simply spend it elsewhere. Thus, the
net effect is generally zero or negative given that stadiums take up a lot of land that is
unused most of the year. So, while teams like the Carolina Panthers may want to chalk
up a “win” for their stadium deal, the loss comes at the expense of taxpayers.
Discussion Questions:
1) Discuss the ways in which a sports stadium is, and is not, a public good for its
local community.
2) When cities and states are considering stadium subsidies, economists are often
brought in to city councils, county commissions, and state legislatures to discuss
academic research regarding the economic benefits of stadiums. Given that
research resoundingly finds they are a bad investment, why do local politicians
consistently vote in favor of them? Frame your answer in the context of Public
Choice Theory.
Sources| Economic Accountability: https://economicaccountability.org/2024/12/30/charlottes-football-stadium-renovations-named-2024s-worst-economic-development-deal-of-the-year-by-the-center-for-economic-accountability/; Axios: https://www.axios.com/local/charlotte/2025/01/03/wins-worst-economic-development-deal-award-650m-panthers-stadium-renovations-boondoggle; https://en.wikipedia.org/wiki/Stadium_subsidy; The Atlantic: https://www.theatlantic.com/ideas/archive/2024/05/sports-stadium-subsidies-taxpayer-funding/678319/; Reason: https://reason.com/2023/04/26/stadium-subsidy-stupidity-hits-new-record/; NY Post: https://nypost.com/2024/12/16/business/gov-hochul-slammed-over-tax-funded-buffalo-stadium-after-bills-owner-pockets-billions/; MLB: https://www.mlb.com/news/rays-pinellas-county-negotiations-new-stadium-deal; Cato: https://www.cato.org/commentary/sports-are-great-stadium-subsidies-stink; Unsplash: Photo by Zac Gudakov on Unsplash