Stadium Project Funding Fails to Hit a Home Run | Citizens Against Government Waste

Stadium Project Funding Fails to Hit a Home Run

The WasteWatcher

Around the country, cities and states continue to fund athletic stadiums to generate revenue through tourism and the teams’ fan base.  But these efforts rarely bring the projected level of income needed to offset their costs, and Citizens Against Government Waste (CAGW) has previously argued that the local community would be better off if the money was used for other purposes.

These plans usually began to percolate when the team’s facilities become outdated, the lease is about to expire, or a better offer is made in another city and a buyout of the lease is negotiated.  The latest action surrounds the Oakland Athletics (the A’s).  The team has been exploring a new stadium in Oakland for many years, but in May, 2021, Major League Baseball (MLB) became so exasperated with the delays that officials told the team to start exploring the option of leaving the city for another location.  As one example of the money that has been floating around for a new stadium, the California legislature approved an investment of $280 million for infrastructure around a new stadium in August 2019 to help keep the A’s in Oakland. 

Since 2018, the A’s are the only American League team make the playoffs each year, along with the New York Yankees and Houston Astros.  But annual revenue was the second lowest in MLB in 2020, and in 2019, the last year of full attendance, only six teams had lower average attendance.    

The A’s have proposed spending around $12 billion in private investment to build the new stadium and surrounding infrastructure.  But on July 20, 2021, the Oakland City Council voted for a financial plan for a new ballpark and infrastructure.  The A’s proposal was not even considered for a vote before the councilmembers.  Mayor Libby Schaaf (D) approved the city’s plan, even though the A’s said they do not know what the council approved since “it was something we had never seen.”  A’s President David Kaval has said that the plan will not work for his team. 

The most prominent place A’s are considering for relocation is Las Vegas, Nevada.  If they move, the A’s would follow Oakland’s two other former professional sports teams, the National Basketball Association’s Golden State Warriors, who moved to San Francisco in 1971, and the National Football League’s Raiders, who moved to Las Vegas in time for the 2020 season.  

Despite the promises of economic growth and community benefits, along with the feeling of loyalty that fans hold for their team (even one with low attendance) Oakland may end up being better off if the A’s move out of town.  An October 15, 2015, Mercatus Center at George Mason University report, “Growth Effects of Sports Franchises, Stadiums, and Arenas: 15 Years Later” analyzed the long-term impact of building stadiums and arenas.  The Mercatus Center found that, “The presence of a professional sports team may affect the economy, but often in the opposite way from what proponents anticipate: sports teams may actually hurt economic growth.  Despite the many millions of dollars spent on professional sports, little or none of that money makes its way back to the taxpayers who subsidize professional sports teams by building new stadiums that cost hundreds of millions of dollars.”

In a top 10 list of poorest neighborhoods in the Bay Area released by Mercury News on December 8, 2019, six of those neighborhoods are located in Oakland.  The city has an unemployment rate of 6.7 percent, which is higher than San Francisco, where unemployment is at 6.0 percent, and San Jose, where unemployment is at 5.2 percent.  If the average Oakland resident cannot afford to attend enough games to pay for the new stadium, the city council should reconsider whether the new facility and surrounding infrastructure is a worthwhile effort to try and build up the local economy. 

The California Legislature should also consider using the already allocated $280 million for other purposes besides building up the stadium and infrastructure around it, especially since the A’s may potentially leave Oakland and the state. With low attendance and revenue, using taxpayer resources for a new stadium and infrastructure could bring more harm to the economy of Oakland. 

As CAGW noted in regard to the two sports stadiums for the Cincinnati Bengals and Reds in Hamilton County, Ohio, “states and cities have to raise taxes or cut budgets and programs to fund these new stadiums, siphoning precious and often scarce public resources away from more pressing needs.”  In Hamilton County, “one in seven people lives beneath the poverty line.  The city also had to cut budgets for schools and sheriff departments.” 

According to the American Legislative Exchange Council’s 2021 Rich States, Poor States report, California ranks 45th for economic outlook.  Instead of squandering more money for a new stadium in Oakland that will fail to hit a home run for local residents, the city and state should focus on protecting the taxpayers.