Stadiums vanish, but their debt lives on
Politicians may promise the moon to get new stadiums built, but the reality can be a heavy legacy of debt.
Ken Belson digs into the financial legacy of the Meadowlands Sports Complex in today’s New York Times. In short, it’s a money loser, with $266 million in debt for which the citizens of New Jersey are liable. At the current rate, they’ll be paying off $35.8 million per year until 2025.
The story is accompanied by a graphic with informative tables on stadium costs, public subsidies, and public debt. As Belson notes, “The finances of public authorities are often murky. To determine that the RCA Dome in Indianapolis, which was demolished in 2008, has $61 million in debt remaining and will not be paid off until 2021, one must sift through 700 pages of bond documents.”
A well known proposition in the field of public choice is that politicians deliver current benefits with hidden future costs. The story of stadium finance fits this model quite well.
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