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Estimating the Fiscal Impact of Stadium Developments: Evaluating a Pro Forma Model

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  • Robert W. Baumann
  • John Charles Bradbury

Abstract

Although researchers have demonstrated conclusively that sports stadiums are not economic development catalysts, stadium projects that include preplanned ancillary developments have been proposed as a salutary strategy to overcome the widely observed dismal economic performance of standalone stadiums. Using an objective rubric for evaluating economic impact studies, we review a commissioned pro forma model that claims to demonstrate net positive fiscal impacts of two prominent publicly-financed stadium-anchored developments. Using assumptions informed by existing research and established discipline standards, the model estimates substantial negative returns for both projects (−$40 to −$60 million in Worcester, Massachusetts and −$100 to −$200 million in Cobb County, Georgia). We find that the reported fiscal surpluses derive from chosen assumptions and not the stadiums’ complementary developments. We conclude that pro forma estimates do not provide credible forecasts of fiscal impacts, and ancillary developments do not improve the fiscal returns of stadium projects.

Suggested Citation

  • Robert W. Baumann & John Charles Bradbury, 2024. "Estimating the Fiscal Impact of Stadium Developments: Evaluating a Pro Forma Model," Public Finance Review, , vol. 52(4), pages 399-438, July.
    • Handle: RePEc:sae:pubfin:v:52:y:2024:i:4:p:399-438
    DOI: 10.1177/10911421231199517
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    References listed on IDEAS

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    1. Victor Matheson, 2019. "Is There A Case For Subsidizing Sports Stadiums?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 38(1), pages 271-277, January.
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    3. repec:ejw:journl:v:5:y:2008:i:3:p:294-315 is not listed on IDEAS
    4. Stefan Szymanski, 2023. "Anticipating the honeymoon: Event study estimation of new stadium effects in Major League Baseball using the imputation method," Economic Inquiry, Western Economic Association International, vol. 61(4), pages 1077-1102, October.
    5. Jennifer M. Connolly & Michael Touchton, 2020. "The Lure of New Jobs: How Framing Impacts Perceptions of Local Subsidies for Sports Teams," Public Budgeting & Finance, Wiley Blackwell, vol. 40(4), pages 86-103, December.
    6. Kaitlyn Harger & Brad R. Humphreys & Amanda Ross, 2016. "Do New Sports Facilities Attract New Businesses?," Journal of Sports Economics, , vol. 17(5), pages 483-500, June.
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