Mar 17, 2022 08:00:00

'The economic effect of the stadium is low and local governments should not build it.'

The stadium where competitions such as baseball and soccer can be held is a large building that attracts not only local residents but also competition fans, and according to the Ministry of Education, Culture, Sports, Science and Technology,

52 new constructions and reconstructions were carried out as of 2020 (PDF file) . It can be seen that this is a business that the national and local governments are focusing on. However, Rob Lucas, an economist at the University of Michigan, has developed a theory that 'new stadiums do not create valuable economic opportunities.'

Cities Should Not Pay For New Stadiums – Michigan Journal of Economics
https://sites.lsa.umich.edu/mje/2022/01/15/cities-should-not-pay-for-new-stadiums/

According to Lucas, a common tendency in the sports industry is the demand for new facilities using public funds. ' For example, in the United States, Buffalo Bills, a professional American football team founded in Buffalo, New York, threatened to 'relocate its headquarters to Austin, Texas,' and gave New York a $ 1.4 billion stadium. It seems that he had requested a new installation. However, it is generally thought that 'new stadiums will create employment opportunities and develop the tourism industry', so new stadiums are often built.

However, according to a study investigating the economic effects of new stadiums, even if a new stadium is built and sporting events are held, the tourism industry will not develop, and in many cases money will only be paid within the municipality where the stadium exists. Will turn around and will not bring substantial net profits to the local government. In addition to this, Lucas said, 'Most of the budget for the stadium goes to the salaries of athletes and coaches,' he said, pointing out that part-time employees who work to maintain the facility tend to have low wages and it is difficult to attract employees. doing.

For these reasons, Lucas said, 'It's better to spend money on public works, such as improving infrastructure, than spending money on stadiums for the benefit of the city and its inhabitants.'

Of course, it doesn't mean that there is no public funding for the stadium, Lucas said, 'Sports are a form of entertainment and bring fun beyond economic gain to local dwellings. Ignore this. It's not a factor that should be done. ' However, Lucas points out that some politicians are obedient to the demands of sports teams, fearing they will lose their city's sports teams and lose their popularity with the population.

Lucas suggests 'adding more sports teams' as one way to improve this. Adding more teams in the sports industry, where it's good to decide on a champion, can be fiercely competitive, but having multiple sports teams in a single municipality is at least a 'threat of team relocation.' Can be alleviated.

Lucas concludes by saying, 'It's a misleading claim that new stadiums and funding create jobs and economic benefits, and it's not a wise investment for municipalities to spend public money on it. A better way to use is to fund education and infrastructure that also improves the outlook for citizens' lives and employment. '