Guest Opinion: Don’t subsidize new baseball team

Published 12:42 pm Wednesday, February 7, 2024

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By John Hood

RALEIGH — Will North Carolina snag one of two new Major League Baseball franchises? That’s what Gov. Roy Cooper, Carolina Hurricanes owner Tom Dundon, and other civic and business leaders are hoping. They’re prepping a bid for a team to be based either in Raleigh or Charlotte. As soon as MLB announces its process and timeline, they’ll try to make their Carolina baseball dream a reality.

I couldn’t care less, frankly. I don’t follow professional sports closely — and even if I did, my interest would be in football, not baseball. Still, it’s a free country. If MLB does decide to expand to 32 teams and a North Carolina ownership group uses its own resources to go after a franchise, fine by me.

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That’s not what will happen, however. The prospective owners will demand that taxpayers subsidize their team by building a ballpark for it. They’ll argue that such a project will expand our economy and create new jobs. This is, in a word, false.

“Sports stadiums are provably ineffective economic development tools,” writes John Mozena, a fellow with the Better Cities Project. “Once you look past rosy economic impact predictions and the glittering stadium renderings, the evidence of decades’ worth of real-world results from across the country is crystal clear: Stadiums strike out when it comes to economic development.”

Last September, the Journal of Economic Surveys published a comprehensive review by three university professors of more than 130 academic studies of the issue. The results “confirm the decades-old consensus of very limited economic impacts of professional sports teams and stadiums,” the authors wrote. “Even with added nonpecuniary social benefits from quality-of-life externalities and civic pride, welfare improvements from hosting teams tend to fall well short of covering public outlays.”

In other words, it costs taxpayers more to subsidize a sports enterprise than they get back in benefits.

Some taxpayers don’t mind, of course. They are superfans who regularly attend games and derive personal enjoyment from following the team. But most residents compelled to subsidize the stadium don’t fit this description. The only way the math works for them is to benefit indirectly — by attracting legions of free-spending fans from elsewhere, or to raise the national profile of their community in ways that promote growth and development.

That’s always the promise. It’s rarely the result. “Nearly all empirical studies find little to no tangible impacts of sports teams and facilities on local economic activity,” the professors concluded, “and the level of venue subsidies typically provided far exceeds any observed economic benefits.”

On other issues, competing philosophical camps may hurl competing studies at each other. That’s not the case here. In 2016, three scholars affiliated with the left-of-center Brookings Institution wrote that “decades of academic studies consistently find no discernible positive relationship between sports facilities and local economic development, income growth, or job creation.”

Tim Carney, a senior fellow at the right-of-center American Enterprise Institute, made a similar point in a 2022 column. “A city or county does not see net economic growth from subsidizing stadiums,” he wrote. “This is one of the most consistent findings in economics.”

Now, I wasn’t born yesterday. And I’m hardly new to the stadium beat. Although the case against sports subsidies is solid, I knew full well that advocates of a Carolina team will lobby aggressively to grab our money to fund their pet project. Some politicians will fold quickly (as Governor Cooper already has). But others will understand that a tax dollar spent on a baseball park represents a tax dollar not spent on a core public service, or not available to taxpayers to spend on a good or service of their choice.

Fiscal conservatives should be ready for a long fight. We should block any attempt to use state revenues or regional authorities to subsidize a ballpark. And we should urge our city and county officials not to get distracted by shiny objects like sports franchises. They have far more important issues to work on.

John Hood is a John Locke Foundation board member.