From public goods theory to municipal capitalism: Evaluating investments in sport venues from an urban entrepreneurial perspective

ABSTRACT

Using public goods theory as a guidepost, scholars have correctly observed that subsidies for sport venues are a product of the monopolistic structure of major sport leagues. Without challenging the observation that economic rent is being extracted from cities, we utilize the municipal capitalism framework to explore the ongoing appeal of teams to cities. We note that rising levels of economic segregation required local officials to aggressively pursue partnerships to offer competitive club goods that deflect regional economic activity into their taxing jurisdictions. After reviewing 116 published academic papers to establish the two frameworks (public goods and municipal capitalism), we use three previously studied case studies to assess outcomes in light of a municipal capitalism perspective. This permits us to provide insights into the use of various sources of public capital to deflect economic activity with the potential to enhance economic development and tax revenues. The work also identifies the need for additional research to compare and contrast classical public goods theory, municipal capitalism, and local government initiatives in an era of “fend for yourself federalism.”

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Correction Statement

This article has been corrected with minor changes. These changes do not impact the academic content of the article.

Notes

1. 1981 Regional Center, General Plan, UPP770 (p. 60)

2. He also agreed to ‎furnish the city of San Diego wtih a letter of credit from a local bank that he ‎had placed on ‎deposit sufficient funds to meet his responsibilities for property taxes that were ‎not paid because ‎the development did not occur‎.

Additional information

Notes on contributors

Gidon S. Jakar

Gidon S. Jakar is a postdoctoral student at the Center for Sport and Policy at the University of Michigan School of Kinesiology researching sports and urban economic development and other sport management related fields. Dr. Jakar completed a PhD in Sport Management at the University of Michigan and a separate PhD in Geography and Urban Studies at the Hebrew University of Jerusalem. Dr. Jakar has published papers focused on the development of sports and urban governance in peer-reviewed journals including European Planning Studies, Cities, and Journal of Sport Management.

Mark S. Rosentraub

Mark S. Rosentraub is the Bruce and Joan Bickner Endowed Professor of Sport Management and director of the Center for Sport and Policy (CSP) at the University of Michigan School of Kinesiology. He also serves as the Sport Management program chair. Dr. Rosentraub has published more than 100 articles in peer-reviewed journals, including Journal of Urban Affairs, the Public Administration Review, Public Finance and Budgeting, Tourism Management, and the Journal of Sport Economics, and has published more than ten books on sport business, public administration, and urban policy. He has received more than $26 million in funding from organizations such as the Lilly Endowment, Olympia Development, Bedrock Development, the Green Bay Packers, and many other cities.