For decades, public subsidies for palatial new stadiums have been the backbone of professional sports, driven by the perception that fans spending money on the home team creates a positive economic impact.
That concept might be meeting its most stressful test in Las Vegas.
The Oakland Athletics, who failed in their bid to elicit sufficient public funding from their home city, are banking on nearly $400 million in subsidies from the state of Nevada and Clark County to construct a $1.5 billion, 30,000-seat stadium for a franchise currently on pace to set a major league record for most losses in a season.
The fuzzy math that comprises this tenuous public-private partnership also counts on the team selling out virtually every one of its 81 home games to generate sufficient tax revenue to cover the stadium financing. Nevada, not the team known for its penny-pinching ways that cried poverty while playing in one of the country’s richest markets, would be left holding the bag on any shortfall.
Usually, that doesn’t matter. Sports-hungry markets – be it a particularly lewd deal struck for a new football stadium in Nashville, or an entertainment-driven outpost like Vegas – usually plow these deals through with little public input and futile legislative resistance.
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That may very well happen. The A’s, their cadre of lobbyists in Nevada and friendly politicians and tourist officials are doing their best to hide the sausage, introducing, finally, legislation for state funding of myriad projects on the Friday night of a holiday weekend, and then offering public discussion on the evening of Memorial Day.
Pretty slick! And it sounds like Gov. Joe Lombardo’s signature would be waiting.
But legislators are increasingly asking two questions long posed by economists and concerned taxpayers:
Is a sports stadium better for jobs and the community than literally anything else that might be constructed in its place?
And can Nevada afford to lavish the A’s with cash after the Raiders, and movie studios, and Tesla have already bellied up to the trough to gorge on public funds?
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Easy money
Elon Musk’s electric car company received $330 million in tax breaks. The state is also pondering $190 million in annual tax credit to lure Sony to the desert, a deal that could result in nearly $5 billion in tax credits over the next 25 years.
And of course, the Raiders received $750 million to high-tail it out of Oakland and into Allegiant Stadium, which will host the next Super Bowl and recently sold out a pair of nights for Taylor Swift’s Eras tour. The $2 billion stadium played host to 15 concerts in 2022 and purportedly drew a fair amount of out-of-town visitors for late-season games against Kansas City and New England – though area promoters are about as good as the A’s at showing the math.
And then there is baseball.
It’s 81 games of a sport highly regional in nature. In a market that would be surrounded by a half-dozen teams within a drive or an hour’s plane flight. For a franchise that would start out a distant third in the local pantheon behind those Raiders and the Stanley Cup finalist Golden Knights.
Thirty thousand fans, for 81 dates?
“Baseball is different than the NFL,” Roger Noll, professor of economics emeritus at Stanford University, tells USA TODAY Sports. “This notion that of those 162 baseball games, I’ve got to see those three that are between the A’s and the Royals in Las Vegas – it’s just nonsense, right? It’s not true, it’s not going to happen.
“That’s the fundamental reason why economists, when they do research on the impact of sports teams, typically find that the effect on local incomes and employment is slightly negative.”
Particularly in Las Vegas, where almost any other tourist lure – another casino, a performance space, a youth travel sports facility mecca, TopGolf – would be more consistently active than a stadium. While ballpark proponents say it would provide “opportunity for new events,” it cites “concerts” and “MLB All-Star Games” among the potentials.
Yet an All-Star Game would occur, oh, once every 25 years. And Allegiant would have dibs on the megastar tours – the Swifts, the Beyonces and Jay-Zs and Springsteens, leaving the occasional Billy Joel or perhaps Bad Bunny for the ballpark. (In the winter, preferably).
Seasonal work
As for jobs? Well, the A’s would have a traveling party of 50 to 75 players, coaches and executives docked in Las Vegas for the year. Another 100 to 200 might occupy full- or part-time jobs with the franchise. But game day?
Noll says the hours that stadium workers put in – for 81 games a year – computes to roughly 15% of a full-time job.
“So the 500 people who work at the stadium on game day, you got to multiply that by .15 to get the number of full-time equivalent jobs, which means it’s less than 100. Wow,” says Noll. “You know, $1.5 billion to create less than 100 jobs, right? Wow.”
While the remainder of the resort business isn’t famously lucrative – a blackjack dealer’s hourly pay is around $14 an hour – at least the casino is open 24-7, 365 days a year. Meanwhile, even special events like the Super Bowl end up a net loser.
How? Well, consider that Super Bowl Sunday is already one of the town’s biggest weekends of the year. Bringing the big game there in February will only stress public services like police, fire and sanitation workers – while displacing the regulars to some other weekend.
“People who would travel there for other reasons just don’t go during that period, because the prices are too high,” says Noll. “You don’t pick up any positive effect on total employment, or even total income in the area.”
And so it goes, 12 months a year. You won’t hear much about CES, the Consumer Technology Association’s annual trade show, but it drew 115,000 to town in January, on the road back to a record 171,000 attendees from 2020, just before the COVID-19 pandemic. Did you know the World of Concrete convention in early February draws close to 60,000 out-of-towners?
Simply luring one more trade show to town will probably create more action than a lifetime of Las Vegas-Houston AL West battles. And tracing economic activity to a sports game is an increasingly complex task in a town like Vegas, where if visitors are robbed of the chance to see a pitching staff perform to a 6.63 ERA, they’ll simply catch one more night of Adele’s residency.
Bottom of the ninth
The locals know this. An unlikely solidarity has emerged among disgruntled A’s fans in the Bay Area and concerned Las Vegas residents, most notably members of the National Education Association’s Southern Nevada chapter. They’ve taken to social media to note Nevada has received F grades in funding level and distribution from the Education Law Center in 2022.
It is not hard to draw the connection between billionaire handouts for out-of-towners and insufficient funding for an area that’s grown so much it resembles a Southern California suburb.
Perhaps that’s why, way back in 2017, Golden Knights owner Bill Foley – who paid his own $500 million expansion fee and $375 million to finance T-Mobile Arena – said, “I felt like there were a lot better ways to spend $750 million than bringing the Raiders to Las Vegas. We could spend it on police, firefighters and teachers and have them all be the best in the country. But I guess we’re going to spend it on the Raiders.”
Increasingly, lawmakers and residents alike are asking similar questions. With just one week remaining in Nevada’s legislative session, the lobbying power of the A’s might ultimately prevail.
