New Los Angeles Stadium to Attract Big Events and Bigger Cronyism

After more than two decades without a professional football team, the city of Los Angeles is about to land their second NFL franchise in as many seasons. After the Rams relocated from St Louis before this past NFL season (they had played in LA previously from 1946-1994), the San Diego Chargers have followed suit and made the same move for 2017. The big draw for these teams, other than Los Angeles being the second largest city in the nation, is that there is a new stadium being built that both teams will share as their own. That stadium will be located in Inglewood, CA (an LA suburb) and is set to open in 2019. The NFL has also selected the stadium to host the 2021 Super Bowl.

Although developers and city officials claim that the stadium will not rely on public funding (an extreme rarity in the world of sports), it turns out that’s not 100% accurate. The plan would eventually recoup tens of millions from Inglewood taxpayers through reimbursements once it opens. The tax breaks obtained by the developers could also total as much as $100 million after the plan is put into place. So it’s not quite the exclusively private endeavor that the state officials would have the taxpaying public believe.

The claim that sporting events cause a significant increase in economic success to a certain area has been met with high levels of skepticism for quite some time. This is partly because of would-be patrons of local businesses avoiding the large crowds that these types of events bring. But even if the boost in local economic activity is true, the NFL has fewer games to host than any other professional sport. Despite two different teams playing in the new Inglewood stadium, that’s only 16 home games every calendar year (perhaps 1-4 more including playoffs). So how does the stadium generate revenue for the other three hundred forty plus days of the year?

The NFL isn’t the only sport eyeing the brand new LA stadium for future plans. The International Olympic Committee (IOC) will announce in September of this year which city will host the 2024 Summer Games. Los Angeles is one of the five cities currently in the running. The new stadium looks to play a key role with the opening and closing ceremonies, as well as other events that may end up being held there. If LA is selected, the Inglewood stadium may end up being the deciding factor.

The economic increases surrounding a city landing the Olympic Games are arguably even less of a cause for excitement than the NFL. The combination of the IOC taking half of the income generated, the infrastructure spending seemingly always going over budget and the lack of the ability to find a use for the newly built facilities after the Olympics end results in mostly lousy financial returns. Cities often end up buried under a mountain of debt with little to show for it. There is not much reason to believe that Los Angeles would be any different in this regard.

All of this reinforces the San Diego voter’s decision during this past election to reject tax increases in a ballot measure directed at raising funds for a new stadium. While knowing it could spell the end for professional football in their city, the voters still refused to go along with the plan. Considering the lack of evidence for a significant economic benefit from the would-be stadium, it appears as if the San Diego electorate did indeed make a wise decision. Keep all of these things in mind in 2019 when people start praising the wonders of LA’s new stadium complex.