November 14, 2016

A Win for San Diego

Michael D. Farren

Senior Research Fellow

Thomas Savidge

Summary

Having a major sports team in your city is a great source of entertainment and community pride, but at the end of the day, sports teams are a business, and make decisions just like a business. San Diegans may love their hometown team, but their vote says that they don't believe they should have to subsidize someone else's profits.

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Regardless of your political leanings, this year's election saw a lot of wins and losses. But here's a big win for Californians: Voters rejected raising hotel taxes to pay for a new stadium for the NFL's San Diego Chargers.

Ballot Measure C received only 43 percent support from San Diego County voters. (It needed at least 66.7 percent to pass.) The Chargers' loyal fan base is justifiably worried about the team's future in San Diego, but from a pure policy standpoint, they dodged a financial bullet.

Why? In order to attract professional sports teams, or prevent them from moving elsewhere, cities often sweeten the pot through tax breaks, subsidies or both. Taxpayers foot the bill for these special favors.

Advocates argue that building taxpayer-funded stadiums is a boon for the local economy, but we need to look at the bigger picture. Impartial economists who have done the math generally agree that subsidizing stadiums brings more costs into a community than revenue.

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