Academic studies generally indicate the ends don’t justify the means when it comes to publicly financed stadiums and arenas. As sports economists Brad Humphreys and Dennis Coates conclude in a 2004 report issued by the Cato Institute: “Professional sports generally have little, if any, positive effect on a city’s economy.”

Despite that, cities such as Baltimore (the Ravens), St. Louis (the Rams) and Memphis (the Grizzlies) have built new facilities to lure teams from Cleveland, Los Angeles and Vancouver, respectively. Others have built stadiums and arenas to retain franchises that otherwise threatened to relocate to cities offering better facilities.

The economic outcome isn’t much different for college athletics. In a 34-year analysis of 63 metropolitan areas that host big-time college football programs, economics professors Baade, Baumann and Matheson found “neither the number of home games played, the winning percentage of the local team nor winning a national championship has a discernable impact on either employment or personal income in the cities where the teams play. While successful college football teams may bring fame to their alma mater, fortune appears to be a bit more elusive.”

While a sense of community spirit is enough to compel cities and universities to continue investing in new athletic facilities, construction starts in the sports facility segment tend to be erratic. Only so many professional and minor league franchises consider new or upgraded facilities each year.

According to the October 2013 issue of Architectural Record, the top stadium/arena project under construction is Levi’s Stadium, the new home of the San Francisco 49ers, valued at $1 billion. Other large projects include the $130 million HARBORCenter in Buffalo, N.Y., the new home of the Buffalo Jr. Sabres; the $100 million PPL Center in Allentown, Pa., the new home of the Lehigh Valley Phantoms; the $100 million Denny Sanford Premier Center in Sioux Falls, S.D., which holds large-scale concerts and sporting events; and a $100 million renovation of Dodger Stadium in Los Angeles.

Significant college sports-related projects include the $250 million Baylor Stadium project in Waco, Texas; a $250 million renovation of Husky Stadium in Seattle; a $168.8 million upgrade to the Rose Bowl in Pasadena, Calif.; a $63.5 million investment in Memorial Stadium for the University of Nebraska; and a $26 million stadium renovation at Illinois State University.

Other venues are in various stages of planning. Replacing the aging Baltimore Arena is part of a proposed project that ultimately will translate into a $1.2 billion investment. According to Reed Construction Data, architect selection is under way. Additionally, conceptual drawings are being produced for a new football stadium for the Atlanta Falcons, judged to be a $948 million project. A new stadium for the San Diego Chargers also has been proposed at a cost of $800 million. In basketball, master planning is being conducted for a new arena for the Golden State Warriors, a franchise that may shift from Oakland, Calif., to San Francisco. And in baseball, a $500 million renovation has been proposed for Wrigley Field, one of the holiest shrines of U.S. professional sports.

Despite academic studies, taxpayer opposition directed at many franchises seeking public financing for a new sports facility, as well as constrained state, local and university budgets, sports facility construction is likely to remain strong going forward. Not only is the development rich with potential projects for the AEC industry, but facilities serve as an integral part of the business of sports. For example, revenues from luxury corporate boxes and other amenities often translate into higher attendance and ticket prices, as well as more merchandising.  


Anirban Basu is chief economist of Associated Builders and Contractors. For more information, visit
 www.abc.org.