market forces has largely been one of complaisant governments permitting
restrictive practices.
11.3 Government Subsidies for Professional Team Sports
Apart from wages, the other major expense for a professional team sports club
is the stadium. In Australia, the four football codes and cricket have all
benefited from state-subsidized construction, renovation, and expansion of
their stadia. The new stadia in Brisbane, Adelaide, and Perth are the major
projects since the turn of the century, when the Sydney Olympics included a
new stadium, but there have also been many smaller publicly-funded projects,
often benefiting individual clubs (Table 11.2).
It is not inevitable that sports stadia are state-funded. In the EU such
subsidies are treated as industrial assistance to individual producers, and are
illegal. This has not stopped clubs from building new stadia if they believe the
benefits from the new facility will exceed the costs. In the USA, stadia were
mostly privately built until the Second World War. In the 1950s, professional
sports leagues used their ability to offer and transfer franchises to convince
cities or states to subsidize state-of-the-art stadia in order to attract teams and
to become or remain a‘major league city’(Siegfried and Zimbalist 2006;
Coates 2007), but since 2000 public funding of stadia has been waning as
taxpayers (e.g. in New York and in Los Angeles) voted down proposals for
stadia funding. In Australia, although codes cannot easily threaten to move
teams from a city if a stadium is not built, they have still been successful in
pressuring states and cities to subsidize stadia. For the largest projects, inter-
state competition has had an‘arms race’effect, for example, stadium con-
struction in Brisbane and Adelaide put pressure on Western Australia to build a
bigger and better stadium in Perth.
The list in Table 11.2 is incomplete because funding for stadia, surprisingly
in view of the state’s involvement, is not transparent. The133rd Report of the
Public Works Committee to the South Australian Parliamentin September 2000
opened with the amazing statement:‘The Public Works Committee is unable
to determine the extent and nature of any governmentfinancial support for
the new grandstand at Football Park due to conflicting content of available
information’, and concluded with a comment on the concerns of this official
watchdog on public spending:
The Public Works Committee is concerned that government support for the grand-
stand has been provided through some mechanism deliberately devised to avoid
scrutiny and accountability in relation to the expenditure of a significant sum of
public monies.Australia’s Economic Mores