The Economics of Professional Sports: If You Build It, Will They Come?
This lesson printed from:
Posted February 20, 2000
Author: David C. Huseman
Posted: February 20, 2000
Updated: May 5, 2008
Special interest groups are able to have a substantial impact on the political system. Such groups can provide valuable services to individuals and to elected officials. They also can generate substantial benefits to a small minority.
In many communities a major public policy issue has developed out of the desire of professional sports teams to play in new facilities: To what extent should the public sector subsidize new (or rehabilitated) stadiums and arenas for professional sport franchises? Teams want new buildings because of their revenue potential and would rather someone else paid for their construction. Teams argue public subsidies for playing facility construction are appropriate because of the positive impact professional sports teams provide for a community. Opponents to public subsidies argue professional sport franchises provide little positive impact.
Economists have generally sided with the opponents of subsidies. A good example of the view of economists is found at http://heartland.org/policy-documents/no-85-sports-stadium-madness-why-it-started-how-stop-it-summary . The activities in this lesson are designed to help students understand why economists generally oppose subsidies for sport franchises and why subsidies may make political sense even if they do not make economic sense.
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