Sports Finance: The Professional Sports Essay

Total Length: 1260 words ( 4 double-spaced pages)

Total Sources: 3

Page 1 of 4

Imposing a Tax or Levy to Build a Sport Facility:

As previously mentioned, one of the major concerns that have emerged in the recent past is whether or not a community should impose a levy or tax to pay for bonds for a sport facility that would house a major league professional sport team. Historically, many taxation avenues have been used to pay for the development of a new sport facility. Since these avenues have included the federal, state, and local governments, they have effectively subsidized the professional sport franchises. Nonetheless, the arguments that have been raised in support of the existing tax policies have lost real credibility because actual studies have discredited exacerbated economic claims (Jensen, 2000, p.460).

In determining the most appropriate answer to this concern, several factors should be considered including the socio-political, economic, and finance dimensions as well as the current trends in financing the construction of a sport facility that would house a major league professional team. One of the recent cases that have raised huge concerns among the general public is the current situation in Miami where a major league baseball team, Miami Marlins, had a stadium built with taxpayers' money. This facility was developed on the promise that the team owner would take every measure to put a championship team in the new stadium within one year of the completion of construction. According to claims by ESPN radio, tax payers were hood winked by the owner to pay for the stadium since he is having a firesale of sorts that has forced him to unload all the high-salaried players in attempts to put out a competitive team.

From an economic perspective, the existing economic literature has indicated that public funding of sport facilities does not create positive net economic benefits for the community. These economists have argued that what really happens is that sport facility projects simply divert economic resources from other geographical regions or parts of the city instead of generating economic growth to the community.
Therefore, the construction of a new sport facility does not increase the local revenue pie, but simply changes the division and allocation of the pie. From this perspective or dimension, a tax or levy should not be instituted by the community to the general public to pay for the construction of a sport facility that would house a major league professional team.

While there is a possibility of the sport facility to enhance the quality of life of community members and contribute to some socio-economic benefits to the society as a whole, a tax or levy should not be imposed on the general public for the development of the sport facility. The evidence of economic literature and theories as well as recent trends and events in similar efforts has indicated that the process does not provide economic benefits to the community as a whole. The involvement of the general public in such efforts is an injustice to the federal taxpayers who will subsidize the multi-million dollar business with little or no actual benefits in return. Therefore, the tax or levy places unfair burden on the taxpayers since it does not result in significant economic benefits.


Hodgson, G. & Lefebvre, M. (2011, August). Who Should Pay for New Pro-Sports Facilities?

Retrieved from the Conference Board of Canada website:

Jensen, S.A. (2000). Financing Professional Sports Facilities with Federal Tax Subsidies: Is it

Sound Tax Policy? Marquette Sports Law Review, 10(2), 425-60. Retrieved from

United States Sports Academy. (2001). Financing Options and Facility Development. The Sport

Journal, 4(2). Retrieved from

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