Chicago Should Not Pay for New White Sox Stadium

March 29, 2024

White Sox ownership should pay for new stadium or leave

It was in the early 1990s when a boom in the construction of athletic facilities swept across America. An explosion which began in Chicago with the replacement of the original Comiskey Park with what is now known as Guaranteed Rate Field, by 2006, over a dozen cities from Baltimore to San Francisco had built ballparks at the bidding of sports franchise owners.

When the bill came due, taxpayers in Chicago shelled out nearly $140 million for Guaranteed Rate Field. Nationwide, the public subsidized over $7 billion in new stadiums.

Thirty years later, White Sox owner Jerry Reinsdorf is again asking for a new stadium and is ogling a 62-acre tract of land scheduled for development in the South Loop, The 78. Upon completion, the sprawling development will feature residential homes, commercial space, 12 acres of open space, a Red Line subway station at 15th Street, and an academic campus operated by the University of Illinois.

While few details have seeped out over how the construction costs of a new stadium at The 78 will be financed, it is plausible to assume Mr. Reinsdorf will expect both the State of Illinois and the City of Chicago to cover a majority if not the entire cost to complete the project.

Though there are several examples of stadiums built with private funds, over the last thirty years nearly all the arenas which host professional franchises have been funded in part with public money. A common feature of each stadium built with public financing is those who benefit most from the new construction are independently wealthy franchise owners, who are hardly lacking their own sources of riches.

For example: When Lucas Oil Stadium in Indianapolis was completed in 2008, the construction cost exceeded $720 million ($1.05 billion in 2024 dollars). Home to the Indianapolis Colts, the Irsay family, owners of the Colts and worth $4.4 billion, were required to pay approximately $100 million. The remaining estimated $620 million in costs to finance Lucas Oil stadium were paid by the public through a raft of taxes, including fees on local sales, income, food, beverage, car rental taxes, and game ticket fees.

In another egregious example of the public compelled to pay for a sport venue, Washington, D.C.’s Nationals Park, home to the Washington Nationals, was constructed in 2008 at a cost of $7.01 million, with every penny extracted from the public. Though the Nationals are owned by the Lerner family, whose net worth is estimated at $5 billion, in addition to rent paid, gross receipts tax on businesses earning more than $5 million annually, utility taxes paid by non-residential taxpayer, and a 4.25 percent special sales tax on stadium sales paid stadium costs. 

Despite a net worth of $9 billion, Dallas Cowboys’ owner Jerry Jones persuaded voters in Arlington, Texas, to pay for nearly one-third the cost for a new stadium two decades ago. While the city of Arlington and Jones came to agree on the Cowboys paying $2 million a year in rent, Arlington taxpayers wound up paying increases on sales tax and hikes to taxes for car rentals and hotels to fund construction costs.

At the very least, Chicago can expect Reinsdorf to covet a deal similar to fellow franchise owners negotiated elsewhere to keep the White Sox in the Windy City, but Chicago residents should oppose tax dollars from being funneled to any new stadium. Mayor Brandon Johnson has signaled a willingness to entertain coughing up tax dollars to fund a new home for the White Sox at The 78. Johnson, too, should retreat from offering public funds to coax Reindorf’s team to remain in Chicago.

While a franchise owner applying pressure or resorting to the threat of relocating to wring public funds for a new complex is a gambit in use since time immemorial, the rationale behind subsidies to fund public sport venues largely rests with four tenets. All four are rooted in economics. First, supporters of publicly funded stadiums assert a new sports complex creates construction jobs. Second, the new facility will be followed by a boost in both employment and economic growth. Third, the new structure will attract tourists. Last, the combination of all these factors — investment and spending — will produce more new spending and job creation.

Supporters of stadiums paid for with public funds further add economic output resulting from the new construction is a form of self-financing. Taxes, they insist, on tickets, concessions, and sales provide a counterbalance to public funding for the project.

While the projections of impressive economic growth consistently accompany efforts to lobby for public dollars funding lavish new stadiums, the problem with campaigns pushing for sports complexes built at public expense is reliable studies examining the fiscal impact of public funding to support sport arenas do not yield lasting benefits the public.

According to the 2015 research paper “Growth Effects of Sports Franchises, Stadiums, and Arenas: 15 Years Later,” authors Dennis Coates and Brad Humphreys found sports franchises did little to “increase the growth rate of per capita personal income” in cities in which public funds were used to finance sports arenas.

Separate studies concentrating on the public funding of stadiums and arenas came to similar conclusions. For example: In the 1997 study “Sports, Jobs, & Taxes: Are New Stadiums Worth the Cost?” authors Roger Noll and Anthony Zimbalist determined stadiums relying on subsidies stripped a considerable amount of tax revenue from infrastructure or other alluring projects, the rewards of which would have gone to the public.

Despite the promise of additional tax revenue and permanent jobs created by new stadiums, studies researching publicly funded sports complexes have shown tax revenue generated ultimately went to cover costs related to hosting events, mainly police protection, traffic control, and public transportation. An increase in jobs was also found to a be an illusion: Though jobs were one of the many incentives of a new sports complex, the largest share of jobs were limited to part-time and low-wage opportunities. Also hidden amid the optimistic projections for an economic windfall from the construction of arenas at public expense is the fact many of these construction projects suffer from terrible cost overruns.

With careful research dismantling all the reassuring talk over the advantages afforded by publicly funded stadiums, it is helpful to expose the main beneficiary of new stadiums built on the public’s dime: Franchise owners themselves.

Though professional sports franchise owners often propose publicly funded stadiums as a civic good and the foundation of urban revitalization, sports complexes and stadiums funded by the public are the embodiment of corporate welfare.

With study after study revealing the economic impact of government investment in sporting facilities delivering inconsequential returns to the public, it should come as no surprise it is franchise owners who realize the greatest dividends. The winners of a golden ticket in a taxpayer funded lottery, franchise owners are handed new facilities which significantly increase their personal wealth and reduce their tax bills. Worse, while the new construction at taxpayer expense is advertised as offering better facilities for spectators, the design of new stadiums is almost entirely formulated on indulging the wealthiest patrons — corporate sponsors and season-ticket holders — with VIP treatment in club seats and luxury boxes, where they immerse themselves with prime views, upscale amenities, and a grand atmosphere. All of this is beyond the means of the average citizen, who is priced out of a stadium for which they helped pay.

While corporate sponsors and the elite enjoy the most sought-after seats, most fans pay higher admission prices, sit in subpar seats, and pay exorbitant prices for concessions and parking. As sponsors and the privileged savor plush surroundings, and the majority of fans are relegated to nosebleed seats, millionaire owners see their personal assets increase.

The Chicago White Sox have two options: Stay put at 35th and Shields or leave the Windy City. A facility like few others, Guaranteed Rate Field is a physically sound structure which affords spectators a wonderful experience.

Neither former Mayor Lori Lightfoot nor Mayor Johnson should be blamed for making every effort to persuade professional sports franchises to remain in Chicago. However saddening it would be to wave goodbye to the White Sox, Mayor Johnson should not loot the city treasury in an attempt to keep the city's second most popular baseball team.

In the last three decades, the business of building sports arenas has proved to be a lucrative enterprise for sports franchises. While there have been some fleeting benefits for residents or a neighborhood, the maximum, long-term advantages directly benefit franchise owners. Though the lesson of who benefits the most from new stadiums should have been learned long ago, it appears Mayor Johnson is prepared to enter into negotiations with White Sox ownership to extend their stay in Chicago. This is, of course, a terrible mistake, as public money spent to persuade the White Sox to stick around in Chicago is the worst form of corporate welfare. Worse, Johnson would be agreeing to a transfer of wealth from the average taxpayer to the wealthy, thereby enabling a billionaire to pay virtually nothing for a stadium he is capable of paying for himself.

While many Chicago residents remain hopeful the White Sox remain in Chicago, a new stadium to indulge Jerry Reinsdorf should not be accomplished by burdening taxpayers.

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