Shame on Miami

Almost a year ago, the U.S. Securities & Exchange Committee began investigated the public financing deal to build the Miami Marlins new ballpark http://online.wsj.com/article/SB10001424052970204826704577077230342369436.html#articleTabs%3Darticle.  This investigation continues, which makes Tuesday’s move by the Marlins http://www.nytimes.com/2012/11/14/sports/baseball/in-multiplayer-trade-with-blue-jays-marlins-pull-the-plug-again.html even more amazing.

For those of you are unfamiliar with the details, several years ago the Miami Marlins ownership was able to convince the people of Miami and Miami-Dade County that a new ballpark would be necessary to be financially viable in the future (essentially arguing that playing in a football stadium was keeping fans away).  They also convinced elected officials that the team could not afford to build the ballpark (usually sports teams will use creative accounting to show a poor financial position, apparently in this case, the team was not asked for much evidence) so they would need public financing.  Sports teams have a history of crying poverty and threatening to leave if they do not get public funding.  So, as the nation suffered through the worst recession since the Great Depression and tax revenues dried up, the City of Miami and Miami-Dade County paid 80% of the $634 million stadium construction costs.

marlins1203

Many of my students ask me if public financing is appropriate given that it creates jobs at the stadium and helps develop the surrounding area.  However, most of the credible economic estimates suggest that the revenues from the sporting events are simply transfered from one part of the community to the arena area (Andrew Zimbalist has done great work on this topic http://www.freakonomics.com/2009/01/09/questions-for-sports-economist-andrew-zimbalist/).  Without creating new revenues, the economic case for public financing is incredibly weak.  In a time when local school districts were laying off teachers, the people of Miami and Miami-Dade County were supporting a beautiful stadium for grown men to hit a ball around.  Don’t get me wrong, I am a huge sports fan.  However, when it comes to having taxpayer dollars support wealthy owners in building new stadiums, I am offended and opposed.  Instead of Miami dumping salaries this week, they should have dumped everyone involved in this decision making process.

This entry was posted in Economics In The World, Sports News and tagged , , , . Bookmark the permalink.