A bill aimed at keeping the Arizona Diamondbacks playing their home games at Chase Field cleared a state House committee last week. In testimony at the state Capitol, a team official told lawmakers the D-backs have identified around $500 million worth of repairs the stadium needs — including to the air conditioning system, roof and plumbing.
These repairs — and who should pay for them — have led to friction between the team and Maricopa County, which owns Chase Field. The measure would redirect sales tax money collected at the ballpark and income tax paid by workers there, including the players, and put it into a fund to cover those repair costs. The team would also contribute. Right now, that tax money goes to fund government programs.
Rep. Jeff Weninger (R-Chandler) is the bill’s main sponsor.
“I think anybody who’s been in the stadium knows the AC’s not necessarily working, and there’s been this tug-of-war, I know, between the parties of how to keep up that maintenance,” Weninger said. “So, this just takes the existing tax revenue from the footprint of the stadium and reinvests it into this public asset that the public owns to make sure it’s kept up.”
Weninger says the measure includes penalties in case the team decides to leave, and that the state would get back any unused money in that case. He also says having the Diamondbacks play home games during the summer helps downtown businesses during what is an otherwise quiet time.
Teddy Myers — founder of Pretty Decent Concepts, which has restaurants downtown — agrees.
“My wife and I chose to launch our business downtown because, as natives, we wanted to take part in building a dense, thriving urban core. And without Chase Field, it just couldn’t be possible. So, we view Chase Field as a pivotal asset for the small business community,” Myers said.
Team officials say this arrangement would help keep the team in Phoenix. Amilyn Pierce says the Diamondbacks want to continue to be a part of downtown and contribute to its economy.
“Just in 2023, in the month of October, when the Diamondbacks were in the postseason, we had over 300,000 ticketed fans, 21% of those came from outside of Arizona — meant they were staying in our hotels, patronizing our restaurants and spending money on goods that were from here in Arizona,” Pierce said.
But many sports economists argue teams and stadiums don’t really contribute that much to an area’s economy. JC Bradbury, an economics professor at Kennesaw State University in Georgia, says when voters are asked to weigh in on deals to use public money to pay for even a part of a new or updated stadium, they tend to say “no thanks” — especially the farther west you go.
He points to Tempe voters rejecting a new arena for the Arizona Coyotes as an example of this. It’s better, he says, for government to contribute to what he calls "complimentary investments" instead — things like roads, sewers and other infrastructure.
Bradbury, who’s also former president of the North American Association of Sports Economists, joined The Show to discuss what he thought about this proposed deal for the D-backs.
Full conversation
JC BRADBURY: Right. So it’s it’s a pretty common thing these days for professional sports teams to seek funding by sort of rather than directly raising taxes using some, financial trickery in which what we do is try and reallocate existing tax revenue devoted to something that benefits that the sports team, for example, remodeling a stadium or building a new stadium.
And then saying, “Oh, we didn’t raise taxes” when the reality is that you’re taking taxes or tax revenue that was going to other priorities. You’re taking that out of the system, and then you’re going to have to raise taxes elsewhere or cut services elsewhere.
MARK BRODIE: Well, this is essentially one of the arguments being made by the city of Phoenix, which would stand to lose a pretty good amount of tax revenue if this bill were to become law. You mentioned this is a fairly common arrangement. What have you seen in other places where this kind of thing has gone into effect?
BRADBURY: Well, economists have been studying the economic ramifications of professional sports stadiums for nearly 50 years. And time and again, they find that they’re typically money losers as public investments. And that is most of the money that spent in and around sports stadiums is simply reallocated from other spending within the community. When the team leaves, people spend their money on other things.
So there’s generally no gain in tax revenue from having a team or loss in tax revenue when you lose a team. And I’ll give you an example of a recent sports district project that opened in Worcester, Massachusetts, at Polar Park. It’s a Triple-A minor league park. But the idea was that, “Oh, we’re going to collect revenue from this entertainment district around the park, and we’re going to pay for it.”
And it has never paid for itself. It runs deficits every year. And this is something that commonly happens.
And you want to look at the major-league level: Where I live in Cobb County, Georgia, where the Atlanta Braves have their team, they also have a stadium district. It’s much larger than what is around Chase Field. But that stadium also ended up costing taxpayers money, about $15 million a year.
BRODIE: So would it be your argument that if, for example, the Diamondbacks were to leave Chase Field, that the city of Phoenix would be able to recoup, and the state and the county would be able to make roughly the same amount of money in tax revenue as they do now with the Diamondbacks there?
BRADBURY: Oh, absolutely. I mean, there’s no question about that. And, you know, what we see is that when teams leave communities that there’s actually no fiscal loss. In fact, sometimes there’s a fiscal improvement in the budget because teams often demand a lot of things in public resources that aren’t even on the books — use of police, just special treatment here and there.
So this is an unambiguous research finding, that sports stadiums are not revenue generators. They’re actually quite bad for the fiscal bottom line. Now, in terms of how big the damage is to the bottom line for a city the size of Phoenix or the whole Maricopa County, you’re probably not going to notice it very much.
But it definitely is not a net fiscal benefit. And to suggest otherwise is contrary to other research. That’s like a doctor coming on here and saying that smoking doesn’t cause cancer.
BRODIE: Is there something that’s maybe not measurable by economic data or even other data about a community having a team depart? Like, is there something that maybe is saddening or not economically depressing, but sort of like a kind of a big bummer for the community if the Diamondbacks, for example, were to relocate.
BRADBURY: Absolutely. And it’s sort of a myth that when economists talk about the lack of economic impact, that they only look at the financial bottom line data. When in fact, there have actually been a large number of studies that try and put a value on this intangible value from whether it’s having a big-league city or just that glee of having a team that you can celebrate a World Series parade. That’s a lot of fun. It’s great to live in a town. I love having, major league sports teams near me where I live in Atlanta.
But the question is, what is it worth? And so when economists go in and try and measure what it’s worth, people say, “Sure, I like having a team.” And they ask them a series of questions, say “Would you be willing to pay $20 a year more in taxes for the team?” And it’s surprising how little people are willing to pay for these things.
It’s like someone says, “Would you like to have a Ferrari?” And you said, “Oh, absolutely. I’d love to have a Ferrari.” And says, “Well, your payments are going to be $2,000 a month.” You say, “Well, OK, you know what? I’ll settle for the cheap sedan.”
When economists do go and look at those sort of intangible benefits, we find they exist. And it’s not that they don’t exist, but they tend to be quite small. And so we’re talking in the tens of millions of dollars, while the expenses for building a stadium are in the hundreds of millions of dollars.
BRODIE: From an economics perspective, is there a difference in a deal like what is being proposed here in Phoenix — where yes, there would be tax revenue put into this fund, but the team would also kick in a good amount of money to also go toward renovating the stadium — versus a situation where it would be just tax revenue that is being set aside to pay for these things?
BRADBURY: I mean, the difference is in terms of magnitude in that the lesser amount of public money is always preferred. But just because a team is putting some money in doesn’t necessarily make the deal better. In fact, sometimes people will say, “Oh well, it’s a 50/50 split. This seems fair.” Well, the government doesn’t pay 50% of my mortgage, and so absolutely it’s better, but it doesn’t make it fair or right.
BRODIE: Would it be different if, for example, it was a strict use tax, where the team tacked a $5, for example, surcharge on to ticket sales or the team added somehow was able to add another fee on to concession sales at the park or or parking prices, where this the public entity still got the same amount of tax revenue that they had been getting, but people specifically using the facility were paying more on top of that, and the team was able to use that money to renovate the stadium?
BRADBURY: Right. So my guess is that when the stadium was pitched, that the tax revenue pitched as a benefit. And so now they want to take that back. But let’s go back to a sort of a broader point to your question. And that is, can we use a use tax?
So let’s say we built a brand new stadium in Phoenix. We implemented a new tax. It was just to pay for the stadium, and it was only paid on tickets, concession sales and the like. And said, “That’s going to pay for itself.” Well, that would seem appropriate because it is a use that is being paid exactly by the people who use it. There’s no loss in other revenue.
But the problem with that is, why would you do that? The team could just build its own stadium and charge higher prices.
