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MSU sports stadium expert Phillip Miller discusses private benefits of public stadium financing

MSU economics professor and sports stadium expert Dr. Phillip Miller stated yesterday at the 26 annual Frontier Forum, that there is virtually no tangible public benefit to building a stadium for professional sports teams using taxpayers' money.

2006-04-09
By Tim Krohn, Free Press Staff Writer [published in The Free Press, Mankato, MN 3/25/2005]

Photo by Pat ChristmanPhillip Miller says there is virtually no tangible public benefit to building a stadium for professional sports teams using taxpayers' money. Miller spoke at Minnesota State University Thursday night.

MANKATO — Public subsidies of professional sports stadiums provide no tangible public good, a fact being recognized by more cities around the country, says an economist who's studied the issue.

"You see a lot more resistance (to taxpayer-funded stadiums) than you did in the past. I think people are seeing the evidence that the benefit isn't there," said Phillip Miller, an economist at Minnesota State University.

Miller said team owners will not invest in privately funded stadiums because the added value it brings to their franchise is negated by the debt. Owners who get stadiums built by taxpayers see their franchise's value jump about $100 million immediately. That, said Miller, easily explains why owners fight so hard for public subsidies. And they are able to apply great pressure to state and local officials because professional teams are in demand and can move to other cities and states.

But he said his and others' research shows that the public gets no benefit from spending tax dollars on a sports team. That's because the teams do not pull new money into a state.

"Most of the money spent on sports and sports teams (by fans) would have been spent somewhere else," Miller said during a research lecture on campus Thursday night.

He said some new money may be pulled into a city or state by the presence of pro sports, but there is a much larger amount of money that leaves the state in the form of salaries to players and owners. "Most of the owners and most of the players do not maintain long-term homes in the cities they play in."

Some in the audience questioned whether the idea of being a "major league state" and the sense of pride and enjoyment of having pro teams is a pubic benefit worthy of taxpayer funding of stadiums. Miller said that for sports fans like himself, there is some joy in having hometown pro teams, but he sees little true public good. He argued that many other things - such as museums, quality housing and a good economy - are are more important in creating a "major league" city or state.

He noted that even when fans are the happiest over their team winning, they show their happiness by buying more team merchandise - something that further enriches the owners who often are taking their profits out of state.

Miller received his Ph.D. in Economics from the University of Missouri - Columbia where he taught and began researching the economics of sports. He came to MSU in 2002 and has done more in-depth study on sports and public subsidies. He was chosen to give this year's Economics Department research lecture.

There is little optimism that this year's legislative session will produce any significant stadium legislation for either the Vikings football team or Twins baseball team, both of whom play in the Metrodome.

There is momentum for a new on-campus stadium for the Minnesota Gophers football stadium. On Thursday, the University of Minnesota announced it had reached a deal with TCF Bank to name a new stadium after the financial institution. TCF would pay $35 million over 25 years for the naming rights.

The university is seeking $94 million in state aid and hopes to raise $141 million privately for a new stadium. Gov. Tim Pawlenty has been generally supportive of the idea. The Gophers currently play in the Metrodome.

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