If someone told you the state of Nevada has, in effect, given a billion dollars of taxpayer money to billionaires, would you believe them? Well, this has happened.
In October 2016, the Nevada legislature approved $750 million in public funds for the Raiders’, owned by billionaire Mark Davis, new home field. At the time, this was the largest public contribution to a sports stadium in American history! In June 2023, the Nevada legislature approved, and Governor Joe Lombardo signed, a more “modest” $380 million in public financing to relocate the Oakland A’s, currently owned by billionaire John Fisher, to a new home on the Las Vegas Strip.
Roger Noll is a Stanford economist who has spent his life studying the impact of public funding of sports stadiums across the United States. What he has found is distributing. Noll observed that American cities had spent billions of dollars in taxpayer-funded subsidies to build sports facilities where the net result was “an extremely small (perhaps even negative) effect on overall economic activity and employment” and that no project has ever come close to a return on investment for the taxpayer.
Noll notes that consistently proponents of subsidies make basic economic mistakes, assuming that all gross economic impact from sports complexes is new. They do not account for the fact the net economic impact is minimal, as sports facilities simply subtract from other consumer spending on entertainment such as movies, restaurants or concerts.
Supporters of the proposal for the Oaklands A’s noted that Las Vegas already has an economy heavily based on tourism. One economic consultant noted that although he generally supports the consensus of economists that spending taxpayer money on stadiums is wasteful, he thinks Las Vegas is different as it already has forty million visitors a year.
However, the vast majority of sports economists have unilaterally rejected the arguments in favor of a billion dollars of subsidies to Las Vegas sports. Economists have noted that projections made by proponents of the deal are completely illogical, with one proposed study estimating the A’s would bring in 2.4 million visitors a year. That is what would be required to even begin to return the taxpayer’s money.
However, the logic is tenuous here as the A’s brought well under 800,000 attendees in the 2022 season. Indeed, they currently have the worst attendance of any MLB team in the country! Other experts on the Vegas economy as also alarmed, with some estimating that the stadium project could cost Vegas tax revenue, as a baseball game is cheaper than “spending $200 going to Britney Spears or spending way more than $200 losing the money in the casino”.
As previously mentioned, both John Fisher and Mark Davis have a net worth in the billions. Roger Noll once noted that most professional sports team owners could afford to pay for stadiums, but without massive taxpayer subsidization, it does not make sense as a business move. Noll suspects without taxpayer funding, stadiums could still be funded with advertising and naming rights among other ideas.
Many sports economists do note that a more modest public investment in infrastructure around stadiums is usually economically reasonable as well. Philosophically, why is it the job of ordinary Nevadans to make the businesses profitable for some of the wealthiest folks in the country?
Additionally, Nevadans recognize that each dollar of taxpayer money is a tradeoff. Money spent on the Oaklands A’s or the Raiders is money not spent on education, healthcare, public safety, roads, or tax breaks for working families.
Nevadans like you must reflect on your priorities. If you do not believe that taxpayer funding for stadiums is the best use of your tax money, we urge you to write a digital letter asking their state legislators to protect their hard-earned income from going to subsidizing private business.
