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Brewers AAA Team Jumps on Insidious Corporate Welfare Bandwagon for New Stadium

(Image: The Tennessean)

I have never attended a Nashville Sounds game, but from what I’ve read by Brewers beat writer Tom Haudricourt over the years, I assume it would not be an ideal ballpark experience.  Haudricourt’s articles about Milwaukee’s AAA affiliate have often included some reference to the Brewers’ dissatisfaction with the team’s Nashville facilities.  For example, in this 2010 blog post on the Brewers extending their affiliation with the Sounds, Haudricourt writes, “The Sounds have fixed up ancient Greer Stadium as much as possible but they really need a new facility and the Brewers hope that happens.

The Brewers seem to have finally gotten their way.  Last week, Nashville mayor Karl Dean announced there would be a public-private partnership that would enable the Sounds to have a new stadium for the 2015 season.  That’s good news for the Sounds and Brewers.  But it’s another unfortunate example of a sinister public policy that has become commonplace – corporate welfare for professional sports teams.

Earlier today, the financing plan for the new stadium was presented to the Nashville Sports Authority and the Metro Council.  Under Mayor Dean’s proposal, the city will pay $65 million for the new Sounds stadium – more than half of the anticipated private investment:

The proposal, which includes deals between Metro and the Triple-A baseball franchise, the state and a private developer, envisions a $50 million private investment by the Sounds organization for a new mixed-use and retail development to anchor the facility. Though the Sounds aren’t contractually obligated to build it, the team has already purchased the private land where it would go.

I’m sure all business owners would love to have the pubic subsidize their expansion plans to such a degree – but there is no reason private corporations should not responsible for their own financing.  Should every restaurant owner who wants to open a new location get public financing?  Should every new store that opens in the mall get a handout for their mayor?  Should every company that wants to lease more space in an office building have their growth underwritten by local taxpayers?

At some point it became ordinary for professional sports teams – i.e., private business that compete with restaurants, movie theaters, casinos, concert venues, bars/clubs, etc., for people’s entertainment dollars – to demand government subsidies for their new facilities.  Why shouldn’t they be expected to go to the bank and get private financing like other (less politically connected) business owners?

Mayor Dean said a new ballpark for the Sounds deserves public financing because, “It’s going to engender a lot of economic activity and it’s going to bring a lot of people over there.”  Sure, every business expansion has the potential to engender economic activity, but that doesn’t mean the mayor should be picking some businesses over others.  It’s not uncommon for public officials to claim that professional sports teams in particular generate boffo economic activity, but there is no conclusive research to prove that assertion.  In fact, there is a lot of evidence that suggests new stadiums or major sporting events, like a World Series or Super Bowl, have only modest economic impact.  Money spent on a sporting event is money that would have been spent on some other entertainment activity, so it’s not at all clear that new stadiums generate significant economic activity.  (For some examples, see the work of economist Victor Matheson, who has studied the economics of sports for over a decade.)

Even if they did, it would not explain why these team owners can’t get their own financing.  Miller Park is obviously another example of a stadium built with government subsidies.  I love going to Miller Park, and I have probably spent more time there than I have at any other individual entertainment destination.  I still don’t understand why my entertainment preferences should have been subsidized by the taxpayers of Milwaukee and four surrounding counties – the vast majority of whom presumably don’t give a hoot about baseball or team sports in general.

As writer Rick Henderson wrote in this 1997 magazine article on the folly of public financing for sports teams, “Any team that stands to make tons of money in a new sports arena is financially sound enough to build its own stadium.”  The Sounds and the Brewers are as guilty as anybody of benefiting from this kind of corporate welfare, and it’s a damn shame.