Posted by 14 August 2016
The Washington Redskins may be coming to Virginia. Would the state benefit if taxpayers shelled out for a new stadium?
Virginia Governor Terry McCauliffe is having what he calls “very serious negotiations” to persuade the Washington Redskins to move to Northern Virginia. While the Redskins’ current lease in Maryland is not up for another decade, the team is already looking at its options for future stadiums.
Governor McCauliffe would like the state to use its resources to persuade the team to move across the Potomac River. However, he also says, “It’s got to make sense for the taxpayers of Virginia.”
Will such a deal make sense for taxpayers? It may be possible, but it will be difficult. The academic literature on the economic impact of stadiums and the return to taxpayers is summed up by researchers from the Brookings Institution:
A new sports facility has an extremely small (perhaps even negative) effect on overall economic activity and employment. No recent facility appears to have earned anything approaching a reasonable return on investment. No recent facility has been self-financing in terms of its impact on net tax revenues. Regardless of whether the unit of analysis is a local neighborhood, a city, or an entire metropolitan area, the economic benefits of sports facilities are de minimus.
Virginians may gain some pride from having the Washington Redskins located within their commonwealth. However, as Governor McCauliffe works to lure the team, he should be aware of the ways that stadium subsidies can go wrong.
Do you support using taxpayer dollars to subsidize sports stadiums?