Don’t Subsidise Rich Owners – Fund Critical Public Priorities

In a follow up to her earlier article “No New Stadium in Tasmania,” Suzanne Curry argues that building a new stadium is a misplaced priority that will not drive employment growth or improve public services, citing extensive economic research showing that stadium subsidies fail to deliver sufficient economic benefits and divert taxpayer funds from higher-priority issues like housing, healthcare and education.

STATE OF PLAY

If Tasmanian’s want employment growth and improvements in public services across all sectors of society, it will not be achieved by building a new stadium in Hobart, or indeed Tasmania.

It has been proven that the flow-on effect on employment and economic benefits does not come close to covering the investment and ongoing maintenance required for stadiums.  Use the analogy of why the Victorian government cancelled hosting the Commonwealth Games due to cost blow-outs.  They now have money to invest $1.85 billion in 100 new G Class Trams, the largest investment in locally made trams in Australia’s history.

Here are several articles, written by respected science and research organisations that will tell you stadiums don’t pay and taxpayers shouldn’t be paying for them.

Surprise! Stadiums Don’t Pay, After All, Cato Institute.

The Tax Foundation of America, in 2024 published this article –  Taxpayers Shoulder a Heavy Burden for Sport Stadium Subsidies.

This article clearly articulates why stadium subsidies fail cost benefit analysis.

And they beg the question –  Why do state and local policymakers persist in offering substantial tax-financed subsidies to professional sports teams?  “The answer lies in the basic political motivation to prioritise re-election above other interest’s, even when those interests are aligned with good governance and sound tax policy.” (e.g. Tasmanian Planning Commission report).  “Policymakers should let the principles of sound tax policy guide them as they seek to grow their state and local economies than succumb to the temptation of subsidising stadiums as an easy economic and political fix.”

The “no build” policy for the 2028 Los Angeles Olympics (LA28) means the games will rely on existing venues instead of constructing new permanent structures, the first time in 80 years for this approach – to save costs and avoid financial and logistical problems associated with new construction.

LA28 has kept that promise but ironically the City of Los of Angeles has not.  It has decided to spend a project cost of $2.62 billion on the Los Angeles Convention Centre.  Refer to the Sports Examiner article –  LANE ONE; LA28 suffers the ultimate irony as it’s “no-build” Games now subject to LA City’s risky, $2.62 billion Convention Centre Expansion.

So here is the analogy –  The Los Angeles City Council Budget and Finance Committee voted, 3 to 2 to scrap the proposed expansion:  Chief Legislative Analyst Sharon Tso states:

“We have real fiscal problems right now… if you want to devote pretty much all of your economic activity in the next few years, this is your project… that’s what you’re going to get with this project… because you will be very, very limited in terms of being able to add any additional firefighters in the next decade, any additional police officers, improving your Rec & Park Services, paving another street…  that is all going to be at risk.”

Or, most damning, have a look at one of the most exhaustive contemporary studies, published in 2022 –  The Impact of Professional Sports Franchises and Venues on Local Economics – A Comprehensive Survey.  This study spans over 30 years and more than 130 studies on the topic.  Here is part of their conclusion:

“First, and perhaps the most important, nearly all empirical studies find little to no tangible impacts of sports teams and facilities on local economic activity, and the level of venue subsidies typically provided far exceeds any observed economic benefit.  In total, the deep agreement in research findings demonstrates that sport venues are not an appropriate channel for local economic development policy… Despite the consensus findings of economic studies that the benefits of professional sports franchises are not sufficient to justify large public subsidies, taxpayer funding for these subsidies continues to grow. This paradox reveals a disconnect between findings in economic research and policy applications that requires correcting.”

And finally, here are the 4 reasons taxpayers should never subsidise stadiums.

I refer to the article – Stop padding billionaires’ profits for sports stadiums.

Competition – Sports and live music are incredibly successful and profitable businesses overall. These venues should be able to compete on their own for consume dollars. If a venue can’t generate the needed revenue, that tells you that it is either poorly managed or not needed by the marketplace.  In either case, the local tax base should not subsidise it.

Riches for the rich –  Sports teams are extremely valuable properties.  Why should non owners subsidise businesses that can easily afford their facilities.  The taxpayer subsidies also distort the market calculus, destroying the signals that supply and demand are supposed to send.  So not only do rich owners avoid the full cost of paying for their venues, but they also get all the appreciation in the value of their teams.  And by lowering the actual cost of operation, the subsidies make it much easier for rich owners to earn a profit.

Economic Impact –  The academics have looked at the data and there is little doubt –  Stadiums add little or nothing to the local economy.  It certainly isn’t worth giving away billions of dollars to these businesses.  The return on investment for the public is nil.  These wasteful subsidies have demonstrated little if any positive economic impact on the municipalities and states.

Priorities –  Given the state of Tasmania, one might imagine there are projects with higher priority for taxpayers money. Anyone who thinks the taxpayer should be paying for a new stadium should spend a little time studying what Tasmanian’s main concerns are –  high cost of living, housing affordability and homelessness, access to healthcare, financial hardship, alcohol and drug misuse, gambling debts, shortage of healthcare professionals and workers, lack of public transport, public hospital overcrowding, the diabolical failure and current debt of the Spirit of Tasmania project and education improvement (Tasmanian is lagging behind).

And here’s the thing.  Leonardo da Vinci said “realise everything connects to everything else”.

Perhaps you don’t give a rat’s arse – you may be thinking this doesn’t interest or effect you – perhaps you are not a concerned ratepayer.

Be assured that if ratepayers are levied, rentals they own will increase.  Be assured that a stadium debt may take decades to clear and compromise our government’s ability to meet and improve your public services and infrastructure.  And I imagine our gross mismanagement of our taxpayers dollars will be looked at very closely by states like WA who are fed up with giving part of their GST to Tasmania. I wouldn’t blame them.

And there is a guaranteed monstrous Grim Reaper lurking, as we speak.  His name is AI.  Jobs impacted include those in administration and support roles (information processing, customer service, data entry, translation, administrative assistants) and technical and analytical roles (software developers and programmers, accounting and finance).  Why mention any of this?  I believe there are challenging times ahead and our government dollars will be in short supply.

In 2024, the AFL generated $1.04 billion in revenue.

The total executive payroll in 2023 was $13.6 million and predicted to grow annually. Healthy figures.

Conversely, in 2025 the AFL Fans Association survey showed that footy fans satisfaction fell to a record 2.7 out of 5.

Fans top concerns – Revenue before fans, umpiring and rule changes, affordability of memberships, floating fixtures and scheduling, the plethora of gambling advertising at venues, TV and streaming.

So, it is fantastic to have a football team for Tasmania but use an existing stadium and after it proves itself viable, get the damn AFL to build a new stadium somewhere outside of the priceless heritage city of Hobart which has just been voted by Expedia 2026 as one of the 10 top ‘small’ cities of the world.   I would ask we legislate to protect Hobart as an ‘old town’.

If the AFL cares about the Tasmanian Devils and its fans, and the fans are genuine about wanting their team and membership to games (no, a $10 founding membership does not include access to games) it would be great idea for every founding member to write to the AFL asking them to finance a new stadium.

Quote the great Mike Malthouse who strongly opposes a new stadium in Hobart as it is misplaced priority for a state with limited resources, quote any of the rhetoric above.

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