For the first time since 1999, the Atlanta Braves are in the World Series. It’s a good feeling for lifelong Braves fans like me, who have been waiting patiently for the postseason success that has eluded the team for so long. But it’s important limit our joy to the team’s on-field performance, because despite community leaders’ claims, hosting the World Series will have almost no impact on the local economy.
The Liberty Media-owned franchise is 5 years removed from opening its new stadium in Cobb County with the help of $300 million in public funding, which local leaders pitched as an economic “home run” for Cobb taxpayers.
Over the summer, MLB moved its All-Star Game from Truist Park in response to Georgia enacting controversial voting legislation, which caused disgruntled pundits to complain that the change of venue exacted large economic losses on surrounding businesses. However, these claims of substantial economic benefits from hosting MLB games are not supported by studies conducted by economists.
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Robert Baade and Victor Matheson found that MLB All-Star games have not been associated with increased local spending or employment in host cities. Dennis Coates and Brad Humphreys found no impact on local income from hosting postseason games. Overall, they note the consensus findings from economic studies are clear: “The large and growing peer-reviewed economics literature on the economic impacts of stadiums, arenas, sports franchises, and sport megaevents has consistently found no substantial evidence of increased jobs, incomes, or tax revenues for a community associated with any of these things.” In a survey of University of Chicago experts, 80 percent of economists polled agreed that public subsidies of sports stadiums likely cost taxpayers more than the economic benefits generated.
For a discipline known for its disagreement, the strong consensus among economists on the economic impotence of sports stadiums and events is striking.
The findings may seem puzzling: How can the dollars spent on tickets, concessions, and patronizing nearby restaurants and stores not benefit the local economy? The answer is quite simple: most people who attend sporting events live and work near the stadium. Rather than inducing new spending, patrons are reallocating their spending from other local consumption options (movies, restaurants, shopping, etc.) to attend games. And while there may be some influx of new spending, other locals choose to avoid the crowds and spend their money elsewhere. The studies show that net impact is a reshuffling of local dollars, not increased economic activity.
Truist Park boosters have argued that the stadium’s mixed-use development (The Battery) makes it different from standalone stadiums that have failed to live up to their economic promises. However, gains have not been evident in property values for businesses near the stadium or throughout Cobb, which have progressed similarly to the rest of metro Atlanta. Sales tax revenue has increased slightly since the stadium opened, but the gains have been small, with approximately one-third of spending at the Battery coming at the expense of other Cobb businesses.
In total, any added economic activity has fallen well short of covering the costs to taxpayers.
I do not intend to dampen the World Series celebration, but erroneous claims of economic windfalls have policy consequences that should be checked. Local governments often cover significant stadium construction costs based on false promises of economic benefits; therefore, it’s important to acknowledge that hosting sports events does not confer significant economic benefits to host communities.
Like most of my Cobb neighbors, I’ll be rooting hard for the Braves to bring home another World Series title, but we can do so without the pretense that hosting the team or the extra games are making us any richer.
J.C. Bradbury is professor of economics at Kennesaw State University and is an affiliate of the Bagwell Center for the Study of Markets and Economic Opportunity.
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