Should Government Provide Funding for Professional Sports Venues?

Whether government should provide funding for professional sports venues or not is an

issue that transcends the pragmatics of financial feasibility standards and complex economic

studies. At the heart of the matter is a more fundamental and perhaps even more important

question: what role should government play in a market economy? By answering this question,

the answer to whether government should provide funding for professional sports venues

becomes clear.

Perhaps an analogy will help. Much like an umpire in baseball does not field the ball if it

is hit towards him, rather he gets out of the way so as not to interfere with the game being

played, so government should avoid actively intervening in the marketplace. Doing so makes

both the game and the economy respectively better—after all, who would want to watch a

baseball game knowing that the umpires could actively participate in the game? Moreover, just

as it is strictly the role of the umpire to enforce the rules governing the ball players, so the role of

government should be to strictly enforce the laws governing market players. A government

policy of economic non-interventionism promotes a healthier economic environment whereby

that which is economically beneficial flourishes and that which is economically destructive

succumbs. The net effect is an increase in the living standards of all.

More to the point, government financing of professional sports stadiums is well outside

the scope of government’s role. Using tax dollars to finance the construction of a new stadium is

simply the concentrated redistribution of resources. While it is easy to see the jobs created during

the construction phase and the permanent jobs created afterwards, what is not easy to see, and

what often times goes ignored, are the jobs lost as a result of this capital redistribution and the

permanent jobs that would have been created had those tax dollars been allowed to flow freely

through the economy.

Assume, for example, that government does not finance the construction of a new

professional sports stadium and that the taxes that would have been levied to finance it are

currently in the pockets of taxpayers. Furthermore, assume that a portion of the taxes that would

have been levied are instead spent by taxpayers on dining out. As a result, assume that 100 new

jobs are created in the restaurant industry as a result of this influx of spending. Now, imagine

that government does finance the construction of a new professional sports stadium. Taxes are

levied, and the money that would have been spent on dining out is now reallocated to the

construction of the new stadium. The 100 new jobs that would have been created in the

restaurant industry are now reallocated. However, since they are never created in the first place,

the economic argument that the restaurant industry is suffering at the expense of the stadium’s

construction is lost on most people. This begs the question, who should decide how capital is

allocated? Should the economic process govern our economic decisions or should the political

process? To me, the answer is simple—let economic decisions be made through the economic

process, not the political process.