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Out of Control Policy Blog

The Sports Stadium and Arena Debacle

Samuel Staley
July 1, 2009, 8:20am

Anyone following the plight of America's sports stadia and arenas should take a look through this article in the New York Times chronicling the debacle we've created with public subsidies. We have more arenas then ever, and often pit private venues against public ones. They all lose.

"In Glendale, Ariz., the city-owned Jobing.com Arena — which is losing money and events to US Airways Center in nearby Phoenix and a third arena at Arizona State — may lose its National Hockey League franchise, the Phoenix Coyotes, which filed for bankruptcy last month.

"In the Minneapolis-St. Paul region, the Target Center, which is owned by the city of Minneapolis, vies with the publicly subsidized Xcel Energy Center in St. Paul. The Minnesota Timberwolves basketball team plays at the Target Center; the Minnesota Wild hockey team plays at Xcel Energy Center. Both sites are losing money, and they must also compete with the University of Minnesota, which has two arenas.

"In Columbus, Ohio, the Blue Jackets hockey team recently opened negotiations to sell its money-losing Nationwide Arena to the county, but the recession has made the sale somewhat unlikely. Nationwide Arena competes for concerts and other nonsporting events with Ohio State University’s Jerome Schottenstein Center, which barely breaks even, according to a report by The Columbus Dispatch."

Perhaps the only thing more stunning is the degree to which owners of these venues continue lobbying for public subsidies and favors to protect their own franchises.

"In New Jersey, the owner of the Devils hockey team, which abandoned the Izod Center in the Meadowlands to play at Prudential Center, wants Gov. Jon S. Corzine to tear down the Izod Center, in the hopes of eliminating a competing venue."

 For those interested in knowing whether these projects make economic sense even in good times, I recommend reading Holycross College economist Victor Matheson's working paper on the subject.


Samuel Staley is Research Fellow


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