Community Benefit Or Corporate Boondoggle?

The Buffalo Bills recently announced an agreement with state and county officials on funding for a new stadium that would keep the NFL franchise in upstate New York for the next few decades. Plans for the new venue, to be built across the street from the team’s current home field, come with a $1.4-billion price tag. State and local governments would pitch in $850-million of that amount. The deal is stirring up the debate over whether committing public money to professional sports stadiums is more of a community benefit or a corporate boondoggle.

According to the agreement, the costs of the 62,000-seat, open air facility would be covered by $600-million from New York state, $250-million from Erie County, $350-million from the Bills’ billionaire owners Terry and Kim Pegula, and $200-million from the NFL through its stadium loan program. The public-private partnership is being cheered by many people who live and work in the region. But they are being met by a loud chorus of boos from lawmakers and economic experts in other parts of the state who see a raw deal in so much public money being used to support a such a wealthy privately-owned business.

A majority of residents in the Buffalo area, almost all of whom are Bills fans, support the plan. It would tie the Bills to a 30-year lease. That, the locals figure, goes a long way in guaranteeing the team continues committing to economic and social prospects across the community. New York’s governor, Kathy Hochul, who hails from the region, points to the Bills generating $27-million in direct annual revenue and $385-million in local spending each year by fans who travel to the area to attend games. Hochul also says that the team’s presence “goes to our identity … it’s part of our local psyche, and it makes us so proud … that’s not quantifiable.”

The 9 or 10 regular season games that the Bills would play in the new stadium aren’t enough to justify the $850-million taxpayer-funded investment. Many additional events and gatherings will need to be attracted to fill remaining dates on the calendar each year. Development of restaurants, bars, retail and entertainment outlets, and possibly some residential complexes—none of which were mentioned in the initial plan—will be of benefit, as well. Even so, why hand over hundreds-of-millions of dollar in public money to an infrastructure development project centering on a private business already worth billions of dollars?

That question is on the minds and mouths of a majority of people residing elsewhere in the state and who aren’t buying the deal. They are opposed to it because of the amount of public money being offered. Sets of politicians, activists, and economists figure that the public subsidy, which would be the largest-ever for an NFL stadium, is not worth the cost to public coffers. Their main point: reams of research show that no amount of ticket and parking fees, concession sales, player salaries, or anything else that generates tax revenue through a stadium makes a real difference in boosting a local economy.

A recent review of 130 studies published over the past 30 years on the impact of teams and stadiums concluded that the “large subsidies commonly devoted to constructing professional sports venues are not justified as worthwhile public investments.” And social benefits, such as quality of life and civic pride, “tend to fall well short of covering public outlays.” Findings of that sort are not a good line for the proposed stadium in western New York, its key stakeholders, and its supporters.

The new stadium would be the 19^th built for an NFL team since 2000 and one of 16 in that lot to receive significant, direct public funding. It is another point that opponents of the deal are pointing to in saying enough is enough. Plus, they add, the New England Patriots’s Gillette Stadium, New York Giants and New York Jets’s MetLife Stadium, and Los Angeles Rams’s SoFi Stadium (where the Los Angeles Chargers also play) have been developed without direct public funding. If those franchises could do it, why not the Bills?

Given the magnitude of money in today’s pro sports industry, it is understandable that policy makers and interest groups increasingly argue against governments committing large sums of public money to major league stadium and arena development projects. And the assumptions on which the arguments are based have held up well because economic indicators have been the yardstick. But the assumptions have by now become obsolete.

Priorities have shifted from economics to society. This means the concepts and tools from classical economics that have been applied to stadium funding considerations are no longer sufficient enough to get a more complete picture. Treating important social factors—community pride, civic engagement, “basking in reflected glory,” happiness—as intangibles and placing them at the bottom of the ledger skews the equation in a way that could only show stadiums as having little or no positive impact in the city or metropolitan area.

Leaders in sports-led development now start out with the belief that improving quality of life is a means to improving economic opportunities. It used to be viewed the other way around. At the same time, the many good examples of pro sports serving as a source of growth for cities are in places where franchise ownerships and government officials agreed to contribute funds to the projects because they recognized that partnership organized for economic performance feeds social pursuits.

Another factor deserving of greater attention is that each market is different. To dismiss factors of time and place is easy and convenient. But consider how stadiums that have been privately-financed by franchise owners were accomplished because that is what the project and its objectives demanded. The same goes for projects that grow out of public-private partnerships.

But it isn’t only about team owners and city officials. The community of residents, visitors, business owners, and fans matter in great measure.

Research conducted over the past decade as part of an NYU-U.S. Conference of Mayors initiative on sports in cities shows that the approach to partnership provides meaningful economic, infrastructure, social, and identity benefits to the people living, working, and visiting the area. Nowadays, the business and civic activities taking place in and around stadiums and arenas make them a gathering spot for community life year-round, from the most ordinary of days to those of crisis and disaster.

A stadium is an economic and social center of gravity for community partnerships. When developed with that social fabric—as is taking shape in plans being proposed for western New York and which the Buffalo Bills would call home—a stadium stands as much more than a community asset. It serves a deeper part of community benefit and engagement.