The Sports Economy Is More Than Stadiums

How do we translate enthusiasm for physical activity into more than sports entertainment?

Renderings of the new Oakland A’s stadium in Las Vegas, a new stadium receiving public subsidy.

Name a major American city and I’ll tell you about a sports stadium controversy. In Philadelphia, the 76ers are trying to build a stadium downtown, but facing intense local opposition over traffic and the potential for heightened gentrification. In Washington, D.C., the Washington Capitals and Washington Wizards wanted to build a new stadium in Alexandria, Va., but the deal got nixed from the state budget. You may have heard how Travis Kelce and Patrick Mahomes urged the public to vote in favor of a tax to build a new downtown stadium in Kansas City, only to be denied last week. 

After decades of building stadiums with the support of public subsidies, is the tide finally turning against this trend? It may be that citizens, and local and state governments are getting smarter about the shady math equating stadiums with economic development.

The Brookings Institution has long questioned the evidence that stadiums are smart economic development, going back to the 1990s when the Andrew Zimbalist published a book on the subject, Sports, Jobs and Taxes: The Economic Impact of Sports Teams and Stadiums. Sports stadiums have a pathetically short lifespan — many last only 30 years before they are seen as too outdated. So it’s no surprise we’re in the second cycle of stadium deals 30 years after the rush to build stadiums in downtowns in the ‘90s. This time around people are much more wary that these stadium deals pay off.

Recently on LinkedIn, Alan Berube, Interim Vice President and Director of Brookings Metro succinctly explained why stadiums in general (and the Alexandria stadium in particular) are not the economic drivers they seem to be:

Yet, for cities that aren’t generating tons of money through other forms of economic development, stadiums are especially enticing. And so many cities are trying to have their cake and eat it too: they’re trying to convert the “aggregate output” into “high-road” industry by combining stadiums with other kinds of economic activity, namely housing and mixed-use commercial retail.

For example, in Philadelphia, while there’s great opposition to the downtown 76ers stadium, an alternate stadium development plan in South Philadelphia aims to augment the stadium with a hotel, concert venue and retail district, and then later to convert a sea of parking lots nearby into more than 2,000 units of housing. By contrast, this $2.5 billion plan has been roundly applauded.

A rendering of the proposed new stadium district development in South Philadelphia

This kind of “stadium neighborhood” approach is a step above the drive-in-and-out for a game kind of economic development. It’s been put to use in Los Angeles at the SoFi Stadium district, which includes 1.5 million square feet of retail, restaurants, and 2,500 units of housing, and The Hub on the Causeway, a development that combines office, residential, and retail adjacent to the TD Garden in Boston.

But I bet stadium neighborhoods will soon also seem passé. These stadium neighborhoods aren’t really producing the kind of amenities that residents need — they’re just diluting the impact of an entertainment zone with urban density, hoping people won’t notice the stadium, the tourists, the sports bars if they’re masked by luxury condos and restaurants.

There are some interesting examples of how a third wave of stadium projects are moving beyond these old iterations of stadium development. Below I’ll explore projects in New York, Boston and Paris where the stadium gives back more than entertainment, and propose that stadiums need to be better connected to a urban recreation through a “sports mayor” role in cities.