Across the World, Sports Stadiums and Arenas Are a Gigantic Swindle

From Calgary to Los Angeles, everyone knows that sports arenas are a bad deal for cities. But the problem isn’t just the use of public subsidies for private profit: the whole multibillion-dollar sports venue industry is built on the backs of poorly treated, underpaid workers.

Scotiabank Saddledome, the home arena of the NHL team the Calgary Flames, located in Calgary, Alberta, Canada. (Wikimedia Commons)

The North American sports market, worth $71 billion, is limping forward in spite of COVID-19 being transmitted among rosters and fans. Teams and leagues have made token gestures to assuage fears, from keeping players in isolated, lonely bubbles, to high-tech, low-impact, and extremely invasive forms of hygiene theater. However, there’s one spectator sports mainstay that can’t return to normal: the idea of fans enjoying games in stadiums and arenas.

While full attendance is on indefinite hiatus at all major sports arenas, and the nature of mass gatherings is fundamentally changing, new venue construction projects are still being built across North America. It clearly makes little sense, in the era of COVID-19, to go on funding new arenas and stadiums. But the lack of economic benefit these projects actually offer to the communities in which they’re built reveals something deeper than the waste of capital. The modus operandi of sports venue development hinges on the disposability of service labor.

You Can Keep Your Trojan Horse, Thanks

There’s a near-universal playbook when it comes to venue construction. When a lease on a current venue expires, or the building ages to a point that repairs become costly, owners ask the city to foot the bill for a new one, or else threaten to move. Owners cite the economic impact of capital flight on municipalities, speaking of job losses and spillover effects on business. And they claim that economic growth results from the construction of new venues through multiplier effects on local spending and investment.

This is all categorically untrue. Venue construction simply diverts public money upward to society’s wealthiest layers. Study after study has demonstrated a net negative effect on economic development. To maintain the illusion of economic benefit to cities, pro-venue studies will often duplicitously factor in the extraordinary and ever-increasing salaries of athletes themselves.

In fact, new venues often deflate wages, taken as a whole, in a city’s service sector. The advantages new construction provides are found in the concentrated economic benefits accruing to the venue and a small uptick in wages for arena workers. The alleged value new venues offer a city often results in net negative spending in other sectors.

Arena booms mean less spending on things like restaurants and movie theaters, and eventually have a negative impact on overall employment for service workers. And the tiny increase in pay that sports venue workers may enjoy doesn’t mean that things are particularly great for them, either.

Recognizing the Bluff

Many studies have demonstrated the negative impact of sports teams arriving in a new city or obtaining a new venue. But what happens when teams make good on a threat to move?

Very little, it seems. While not much has been written on the impact of team relocation on the losing city, one study found no observable impact on unemployment. While this may point to a neutral impact of stadiums and arenas, it’s easy to develop a more thorough explanation from this that underscores the precarity sports venues exploit.

Sports arenas encompass a broad range of service and hospitality work — food service and prep, cashier, cleaning, and so on. These jobs are largely low-paid and part-time. Along with work in the agricultural sector, such jobs account for society’s most precarious occupations. While new arenas contain more and more accommodation for wealthy ticketholders, jobs at venues, old and new, remain perilous.

Demand for an easily exploitable and replaceable workforce is largely unaffected by the presence of sports venues. Workers in cities that lose sports teams will easily find equally awful, precarious work elsewhere. Taxpayers often end up footing the bill for shitty jobs to be offered to their desperate neighbors. And, of course, the people who take the jobs at sports venues are perpetually left out of discussions concerning venues, relocation, and “job creation.”

In December 2019, Calgary City Council voted eleven to four to approve a new arena for the Calgary Flames, with the city footing 51 percent of the $565 million bill. A report from RP Erickson & Associates touted the development’s creation of 6,450 new jobs, of which only 2,920 are going to be full-time, with an average salary of $39,482.

But averages lie. Some workers will make more, many will make much less. In any case, this average salary — even assuming no dependents are in the picture — still just barely covers the cost of making ends meet in Calgary. And it doesn’t account for the rising cost of living associated with the other side effect of stadium and arena development: gentrification.

Sports megaprojects are an extraordinary gentrifying force, often anchoring a larger project of working-class displacement. In Edmonton, the relatively new Rogers Place arena was the lynchpin of a larger neighborhood development, called the Ice District, that was meant to gentrify the downtown core. It’s already interrupted and created tensions with vital services for the city’s most vulnerable.

The Ice District initiative was partly forced through by a threat to move the team to Seattle. Supporters of the new Calgary arena pitch it as part of a similar district project, which would return less than 1.5 percent a year to the municipality.

Gentrification’s net effect on cities pushes out residents from low-income demographics, increases commute times, and harms the overall health of workers. Sports venue development also exacerbates existing problems of urban accessibility.

In cities like Edmonton and Calgary, public transit has historically been a low priority for city councils. Calgary’s arena deal followed a sharp cut by the provincial government to a vital Green Line Light Rail Transit (LRT) project. While the provincial government renewed its commitment a year later, Calgary City Council approved funding for its new arena in lieu of covering the transit shortfall.

Because of the economic havoc wreaked by the ongoing pandemic, Calgary City Council is now considering large-scale austerity and further cuts to its LRT project. The city’s commitment to the new arena has compounded these economic woes. The proposed cuts will have an inordinate effect on workers who have been laid off because of COVID-19, who were previously employed in badly paid jobs — just like those to be found at Calgary’s impending sports arena.

The Relocation Fallacy

As more than one economist has observed, it would be more efficient for cities to throw money onto the streets than to subsidize a new stadium — to say nothing of using the cash for vital infrastructure. So why do cities still do it?

In theory, municipal pride is supposed to play a major part in creating popular support for arena projects. On closer inspection, the reality is often quite different. While most Calgarians wanted a new arena for their beloved Flames, local opinion was split down the middle over the use of public funds to make it happen.

When the Oakland Raiders moved to Las Vegas, it may have been disappointing for the team’s die-hard fanbase, but polling demonstrated that Oaklanders were overwhelmingly willing to lose the team if it meant they could use public funds to address homelessness and build housing instead. The city of Las Vegas spent $750 million on the Raiders’ new stadium.

In cases like Calgary’s, team owners used the threat of capital flight and the negative political fallout that would ensue as leverage to extract more public subsidies. And Calgary City Council flinched. Now the Stampeders have come knocking on the door of city council, expecting the same treatment.

The widespread notion that city councils capitulate because of civic pride masks the vital role of lobbying and political pressure. This mistaken belief obscures the cozy relationship between municipal governments and corporations that ultimately lines the pockets of the 1 percent. In Canada, nine major stadiums and arenas have been built with taxpayer funds since 2000. Out of six major sports venues opened in the last two years in the United States, four have benefited from public money, either in construction or tax breaks on the property itself.

Workers are caught in the middle of this public-private relationship. Sports teams straddle the worlds of commerce and culture, and athletes are often at the center of society’s most visible labor struggles. While players are workers — make no mistake about that — the resources at their disposal are clearly different in kind from those available to frontline workers. There is no specific data on unionization in sports venues, as they’re included in a variety of sectors. But we know that venue management engages in typical forms of union-busting, from dissuasion to an emphasis on hiring part-time and casual workers.

In the wake of the pandemic, the outright abandonment of arena staff bears witness to their lack of workplace protections. In some cases, players and other workers had to step in to cover pay for frontline workers before owners caved into public opinion.

Like most lucrative industries, professional sports relies heavily on public money and poorly paid staff to sustain private profit margins. In recent years, the trend toward privately funded venues has been increasing in the United States. But if cities really wanted to derive some economic benefits from sports, they could always nationalize the teams. It’s the only way workers who are fans could actually afford tickets.