Tonight's major league all star game may be the last major contest held at Yankee Stadium, a great sports icon that will be replaced by a newly constructed stadium of the same name beginning next season. Unfortunately, the new Yankee stadium was partly financed with at least $200 million in state and city government subsidies, and possibly as much as $450 million. In addition, the city has also provided the Yankees with $941 million in tax-exempt bonds, and the team is lobbying for an additional $350 million. Although the Yankees will have to pay the bond money back, it still constitutes an additional public subsidy because the money is tax-exempt and presumably comes at a lower interest rate than the Yankees would have to pay if they borrowed the same amount from private lenders.
In this 2006 post, I criticized these public subsidies for the new Yankee Stadium, as well as sports stadium subsidies in general. Studies by economists almost uniformly show that stadium subsidies create no net economic benefit for cities, but are instead a pure transfer of wealth from taxpayers to owners and players. The latter, to put it mildly, are not exactly needy. Public subsidies for stadium construction might even leave cities worse off by diverting valuable land and public funds from more productive uses.
In fairness to the Yankees, they are far from the only sports team to get government subsidies for a new stadium. However, the subsidies in this case are far greater than in any other. At a total price tag of $1.3 billion, the new Yankee Stadium will be the most expensive sports facility ever built in the United States, and the third most expensive anywhere in the world. As far as I know, no other stadium in American history has ever gotten as much public funding as this one. Moreover, the Yankees and New York City officials are lobbying to get the IRS to change its regulations to make it easier for them to get the additional $350 million in bonds they are seeking. If the IRS agrees to the change, it would facilitate further subsidization of sports stadiums across the country, not just in New York City.
In the article linked in the last paragraph, Democratic New York state legislator Richard Brodsky is quoted denouncing the Yankee Stadium bond deal as "government by Soviet-style bureaucracy." That's somewhat of an exaggeration. Nevertheless, there is every reason to oppose this kind of sports stadium socialism.
As regular VC readers know, I'm a big baseball fan. However, I also believe that baseball teams (and other professional sports teams) should pay their own way with funds earned from willing fans. Taxpayers who aren't baseball fans shouldn't be forced to subsidize the entertainment of those of us who are.
The original Yankee Stadium was built with private funds, as were virtually all the great sports stadiums of the first half of the twentieth century. Today's sports team owners are far richer than their early twentieth century counterparts. If they want to build new stadiums, they should pay for it themselves.