Public funding for sports stadiums just doesn't pay off for taxpayers

While Chicago White Sox players are focused on preparing for next season, the team's management and Chicago’s government are focused on an even bigger issue: the future of Guaranteed Rate Field. The White Sox are considering asking for taxpayer money to either renovate or build a new stadium.

Mayor Brandon Johnson, who has expressed interest in keeping the team in the city, suggested any stadium deal would be a public benefit, stating that stadium projects serve as economic drivers for local communities. This is a common refrain whenever sports teams push for public subsidies. Johnson is also supporting the Bears’ proposal for a new lakefront stadium with public subsidies.

However, the long-term value of these projects to the broader public remains highly debatable.

The White Sox’s potential subsidy request could top $1 billion, a hefty sum for a city and state grappling with economic challenges. Illinois’ tax environment is one of the least competitive in the country, and state and local officials have often sought to paper over the deficiencies by providing subsidies to select businesses — or, in this case, sports franchises — rather than embracing a more competitive environment for all comers.

Beyond the taxpayer burden, there is the question of whether a new or renovated stadium would deliver the economic benefits proponents claim. Johnson and others argue that a new stadium could stimulate job creation, boost tourism and generate revenue for the city. Proponents and the site developer, Related Midwest, claimed that the White Sox could anchor development in the South Loop and help revitalize the area. They anticipate that the project could generate billions in long-term annual economic impact, hundreds of millions in annual tax revenue and tens of thousands of new jobs.

However, the track record of publicly funded stadiums tells a different story. A growing body of research shows these projects rarely deliver on their economic promises. While stadiums might generate activity in the immediate area around them, the benefits rarely extend citywide. A 2015 study by a Stanford University economist found little to no lasting economic impact on cities that fund major NFL sports stadiums. Instead, the wealth generated by these developments often stays concentrated among team owners and nearby businesses.

Taxpayers left to pick up the tab

Illinois is not alone in this. Across the country, team owners — often billionaires — successfully lobby for tax breaks, public funding, and other incentives to minimize their own costs. Jerry Reinsdorf and his partners are no exception. In fact, the team's current home, Guaranteed Rate Field, was itself a product of public financing, built largely with taxpayer dollars back in 1991.

The financial structure of these deals heavily favors owners, while ordinary taxpayers are left to pick up the tab through increased taxes or cuts to essential public services. The only guaranteed rate of return at Guaranteed Rate Field accrued to the owners who benefited from the city’s largess.

This raises a broader issue: whether public funds should be used for projects that largely benefit private interests. Stadium subsidies are particularly questionable because their economic returns are so difficult to quantify. Their benefits often are short-lived, failing to justify the long-term financial burden placed on taxpayers. Instead of investing in stadiums, policymakers could direct those funds toward more proven, impactful projects, like public infrastructure or education. These areas deliver a far higher return on investment and benefit the entire community, not just a subset of sports fans.

In light of the possible trade-offs, lawmakers and other elected officials should carefully consider whether subsidizing a new White Sox or Bears stadium is a good use of public money. With Illinois’ fiscal challenges, the state can hardly afford to take on another massive financial commitment with questionable returns. Broader-based economic reforms, such as lowering taxes for all residents or investing in essential public services, would do far more to improve Chicago’s economy than building or renovating a stadium that sees only 81 home games a year and the occasional concert.

At its core, this debate comes down to a simple but important question: Should taxpayer dollars be used to subsidize a privately owned sports team, or should they be directed toward addressing more pressing public needs? Chicago’s residents and local and state leaders should reflect on the lessons from past stadium deals. All too often, taxpayers are left footing the bill while the promised benefits fail to materialize.
 
Joseph Johns is a state policy analyst at the Tax Foundation, a Washington, D.C.-based nonpartisan, nonprofit tax policy group.

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