This Week in Sports Stadium Malfeasance

A round-up of news and research on stadium spending gone wrong.
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From top left, clockwise: The Air Force Honor Guard Drill Team performs at halftime of a New York Jets home game (Photo: MarineCorps NewYork/Flickr); Lebron James (Photo: Keith Allison/Flickr); and the Maracana stadium (Photo: sama093/Flickr)

From top left, clockwise: The Air Force Honor Guard Drill Team performs at halftime of a New York Jets home game (Photo: MarineCorps NewYork/Flickr); Lebron James (Photo: Keith Allison/Flickr); and the Maracana stadium (Photo: sama093/Flickr)

We all know that the professional sports world is full of corruption. Between the steroids, the deflated footballs, and the abuse cover-ups, it seems like the big leagues are just as likely to leave you feeling nauseous as they are elated.

But the corruption doesn’t stop at the physical bodies involved in athletics. Even the very arenas these athletes play in are ensconced in foul play:

1. A VERY EXPENSIVE PARKING LOT

Brazil spent some $3.6 billion on 12 stadiums for last year’s World Cup. A steep price tag, no doubt, but one that officials assured the public was well worth the price. These stadiums, the argument went, would later host major concerts and sporting events, the Associated Press reported in 2014.

That hasn’t been the case, though. As NPR’s Lourdes Garcia-Navarro reports, “[t]he most expensive World Cup stadium—located in the capital, Brasilia, and with a price tag of $550 million—is being used as a parking lot for buses.” The primary culprits? High costs of running the stadium operations, and the fact that many of the stadiums were built in locations lacking strong local soccer ties, according to NPR. There simply aren’t prominent enough local teams to make use of the respective stadiums.

For other stadiums, instead of those big concerts and sporting events, they’ve instead resorted to hosting weddings and children’s parties in an attempt to generate any revenue at all, according to the Associated Press.

That’s a big planning oversight, yes—and a gross misuse of public dollars—but its failures are certainly precedented: At best, the evidence is mixed over whether a World Cup can actually improve tourism for a host country long-term to justify the spending on infrastructure and stadium construction, according to Allison Stewart of the Harvard Business Review.

2. PATRIOTISM COMES WITH A COST

Many NFL games feature some sort of “Hometown Heroes” tribute, where a few local soldiers are thanked, in front of thousands of screaming fans, for their patriotism and service. Oftentimes, the soldiers also receive box seats. The tradition alone has yet to fuel much controversy; it’s where the money’s coming from.

As New Jersey Advance Media’s Christopher Baxter and Jonathan D. Salant report:

The Department of Defense and the Jersey Guard paid the Jets a total of $377,000 from 2011 to 2014 for the salutes and other advertising, according to federal contracts. Overall, the Defense Department has paid 14 NFL teams $5.4 million during that time, of which $5.3 million was paid by the National Guard to 11 teams under similar contracts.

The big issue: that’s taxpayer money. And it’s not just the Jets; the Department of Defense has had similar deals in place with 13 other NFL teams, with $1 million going just to the Atlanta Falcons in that time-frame.

It’s also not just football; similar contracts exist in professional basketball, soccer, golf, and even cycling.

Among criticisms, Arizona Senator Jeff Flake called the deal “unseemly,” as these salutes are manufactured to look like goodwill on the NFL team’s part, when, really, it’s the fans who are ultimately paying.

3. THE POWER OF LEBRON ... AND THE INABILITY OF ARENAS

Lebron James is quite valuable to the Cleveland Cavaliers, as both an athlete and an economic asset. Last summer, when James decided to re-sign with the Cavaliers, analysts wrote about his financial value to the city—estimated at around $500 million. The man behind that big number, finance professor LeRoy Brooks, basically said that Lebron increased Cleveland ticket prices and the local leisure economy. While that prediction has yet to be confirmed, there are some promising numbers: The Cavaliers have seen a 204-percent increase in their average resale ticket price compared to last season, according to a 2014 analysis by Nerdwallet. (Note: That figure may have changed as the season wore on.) So, whether or not James hoists another Larry O’Brien Trophy, his acquisition certainly paid off.

Unfortunately, the same can’t be said for the Cavaliers organization. For a city that, according to USA Today, ranked in the bottom fifth in job growth nationwide between 2012 and 2014, the question remains: Are the Cavaliers, owner of the league’s most expensive tickets, really worth the price tag?

Some economists would say no. As reported on the Freakonomics blog, a survey by Harvard professor Gregory Mankiw found that 85 percent of economists agreed that local and state governments would be better off not subsidizing professional sports arenas.

Of course, the Quicken Loans Arena—where the Cavaliers call home—has already been built. So arguing against the construction of an arena is largely pointless. But rumor has it the Cavaliers want to refurbish their arena, and there could be public money involved.

Here it is helpful to turn to a 2011 analysis by economists Rob Baade and Victor Matheson, which finds that, while sports spectacles do indeed draw crowds, they also repel non-sports-goers from the general stadium area. (Think: lots of drunk fans.) In addition, all those expensive athletes that teams pay often don’t live in the city limits, and therefore do far less for the local economies, according to Baade and Matheson.

This Week In explores ongoing revelations and research on trending news topics.

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