Authors

Irene Pijuan

Publication Date

10-24-2008

Category

Housing/Neighborhoods, Environment

Abstract

The subsidies to franchise owners take two forms—tax breaks and the availability of arenas at a very low cost. Public subsidies take the form of new stadiums and arenas provided by local authorities and financed by taxpayers or by issuing state bonds. The subsidy starts with the federal government, which allows state and local governments to issue tax-exempt bonds to help finance sports facilities. Tax exemption lowers the interest on debt and so reduces the amount that cities and teams must pay for the stadium. Some host cities subsidize the streets near stadium, water and sewer services, match-day safety and crowd control services. Moreover, the stadium and its operations are often tax exempt from property taxes. Stadium leases grant generous revenues and low rent to the team owners as a subsidy.

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