For decades, academic research has been clear: Taxpayers almost never get their money back on subsidized sports stadiums.
And yet, over and over again, U.S. cities and states find themselves locked in lopsided negotiations with beloved football, baseball and basketball teams, hoping to keep them from jumping to a new market.
In the newest bidding war, Kansas aims to spend hundreds of millions of dollars to lure the NFL’s Kansas City Chiefs or MLB’s Royals from their side-by-side stadiums in Missouri just a few miles away. It could be one of the most expensive stadium deals yet, according to Victor Matheson, a researcher who studies stadium subsidies.
“This is wildly destructive,” he said. “This is in some ways significantly worse than intercity competition, because you’re just spending billions of dollars to just move economic activity from one point in the metro area to another.”
Matheson, an economics professor at College of the Holy Cross in Massachusetts, watched closely in June as lawmakers in Topeka, Kansas, approved an expansion of an often-criticized tax incentive program with the aim of subsidizing a new stadium for one or both teams.
The bidding war for the teams is being viewed as particularly irresponsible by those who hailed a 2019 compact between Kansas and Missouri that some had hoped would set a new model for states across the country to curb corporate tax incentives.
Five years ago, the Democratic governor of Kansas and the Republican governor of Missouri celebrated an end to the so-called economic Border War, a long-standing practice in which governments would offer lucrative subsidies to lure companies back and forth across state lines in the Kansas City area. People saw the practice as wasteful, since it paid companies to relocate without spurring new growth for the regional economy.
The truce was momentous for Kansas and Missouri, two states whose rivalry traces back to bloody Civil War days. But it also garnered national acclaim from both liberals and conservatives who saw the move as a blow to corporate welfare and the cynical practice of companies pitting governments against each other.
But more powerful than the bipartisan cross-border cease-fire, apparently, is the allure of a new professional sports venue.
“Literally every piece of public policy that people said was bad before is being seen here,” said Kansas City, Missouri, Democratic Mayor Quinton Lucas.
Across the country, professional sports teams are playing various local and state governments against each other — a trend that will likely accelerate as a wave of existing stadium leases begin to expire across the country.
It’s a page from the pro sports playbook: Teams often threaten to move to other markets — one without an NFL or NBA franchise, for example. But when those efforts don’t work, team owners often seek to spark competition among local jurisdictions, Matheson said.
New Jersey officials are currently in talks with the owner of the Philadelphia 76ers to get that NBA franchise to hop over to Camden, New Jersey. And the NFL’s Washington Commanders, whose current stadium is in Maryland, are in talks with officials in Maryland, Virginia and the District of Columbia as they look to build a new facility.
“If there’s not a credible threat to relocate,” Matheson said, “the only way to really get the money out of people’s hands is to play localities against one another.”
Lucas said the bidding war between Kansas and Missouri — and local governments in each — gives more leverage to the Chiefs and Royals in negotiations. But it’s up to elected officials to keep from being outmatched.
