.The short version
There has been a rash of stadium building in America since the mid-90s; in almost every case they have involved huge sums of public money, and they all cost significantly more than they were budgeted at. At the start of the boom, the reason given was economic, but that reasoning came under attack. Stadiums didn't give people more money to spend, it only caused them to move their spending from one location to another, with no net gain. The only real gains could come from tourism, but the sports tourism case was bad too.
As time went on, the argument changed to image and morale - the new stadiums would keep the teams in the city and would let them feel better about themselves. These "soft" arguments proved much more effective, especially with cities whose economies were in a downturn. The cities where this worked may just be setting themselves up for further cycles of this attack in future years.
There are interesting lessons for Adelaide. First, the economics are likely to be even worse, because travel in Australia is more expensive than it is in the US, which limits further the opportunities for tourism. Second, Adelaide is probably vulnerable to this new argument of image and morale. We already feel like we're the brunt of many jokes from other parts of Australia; often they say "without <whatever>, we're at risk of becoming Adelaide" as their scare tactic of choice. But we really should ask ourselves: once we've built a stadium, will they stop picking on us? How much better will we feel because of a new stadium? Stadium building is an expensive game, and there may be other ways to improve how people feel about a city that can't be funded as a result.
** Long Post Alert **
Public Dollars, Private Stadiums (The battle over building sports stadiums) (2003)
Kevin Delaney - associate professor of sociology at Temple University, author of Strategic Bankruptcy.
Rick Eckstein - associate professor of sociology and assistant director of the Center for Peace and Justice Education at Villanova University, author of Nuclear Power and Social Power.
The book describes nine cities that built (or tried to build) stadiums either largely or entirely with public money. All of the case studies are from the period 1995-2003, and in most of the cities there was more than one stadium built (generally baseball and football). The authors are sociologists and their objective was to explore the reasons that in some cities the stadium building met with much more significant problems than in others (in two cases, it didn't happen at all). They examine the processes that lead to the construction and identify the actors involved and the methods they employ.
The first two chapters layout the framework that they use for the case studies, and the next five chapters are the case studies themselves. Anyone interested in the book but not in the sociology could skip straight to chapter three without giving up too much; the case studies are interesting enough by themselves. The cities were:
* Cincinatti - football and baseball, built with little opposition. The total cost ballooned to almost double the original estimate.
* Cleveland - football, baseball, and basketball. Started with little opposition, but the construction itself was fraught with scandal and almost went bankrupt (the county bailed them out).
* Minneapolis - proposal to build new stadiums got shot down by popular vote.
* Hartford - attempt to lure the New England Patriots goes wrong, the entire downtown renewal goes off the rails.
* Phoenix - voters resoundingly reject new taxes, but the county finds a way to introduce one without a vote for a ballpark.
* Denver - new football and baseball stadiums, ostensibly a renewal program for the Lower Downtown area
* San Diego - new ballpark as part of a larger renewal program; a ballpark alone would require voter approval, the "renewal" did not.
* Pittsburgh - voters reject the initial tax proposal for the stadiums, but a month later the city have found a way that did not require a vote.
* Philadelphia - significant opposition to building new stadiums in the downtown area, they end up building new ones near where the old ones had been in; although their projects started at the same time as Pittsburgh, they finished 2-3 years later.
Key points:
The key actors in these studies turn out to be what the authors call "local growth coalitions". Typically they were a combination of a high-level business group (The Cincinatti Business Committee, Cleveland Tomorrow, or the Allegheny Conference [Pittsburgh] - each a CEO-only organisation of companies in or near the Fortune 500) with the local governments. The reason that the business leaders were eager for stadiums was, surprisingly, recruitment. They felt that being able to take potential candidates to a luxury box at a football game could give them an advantage when trying to convince an "A-team player" choose Cleveland over New York. Of course, they didn't want to pay too much for that advantage, so they use their influence to encourage the city/county/state to pay for it instead. And, in any case, it won't hurt them to reinforce the message that giving public money to a private concern is normal.
They are effective in getting stadiums built, where frequently the teams themselves are not, because they have the appearance of not having a vested interest. They publicly distance themselves from the work of developing the plans and the campaign (although in many cases they initiated each of them), but may casually mention on the radio how building a new stadium would be good for the city they love.
The arguments for building stadiums have changed over time too. At the beginning of the stadium-building boom, the justification was economic; as time went on it would be for the city's image or morale. The reason for the change was that the economic argument was no longer effective; when that argument was used, the project tended to meet more opposition. On the one hand, there is a growing body of academic research that has shown insignificant or no economic benefits, and on the other as more stadiums got built people could actually see for themselves what has or hasn't happened around them. This was especially true for the cities that built two stadiums.
The reason that the economics typically don't work out is quite simple - it's called the Substitution Effect. Suppose I eat at a restaurant after a game and spend $20, what would I have done with that money otherwise? If I would have spent it somewhere else within the state, then the net gain for the state is zero. More than that, people typically have fixed budgets for themselves within each spending category; that $20 would probably have been spent at some other entertanment option, so the total value of the entertainment economy doesn't change, just where within the city it happens.
So any increase in the economy will have to be due to money arriving from outside the state, but the tourism benefits of a new stadium are very small. First, sports tourists are typically travelling to support a team rather than to see a stadium; building the new ground doesn't attract many more than were travelling already. Second, tourism is very sensitive to the rest of the economy; as the economy slows and travel becomes more expensive, tourism drops.
The image and morale arguments had a couple of advantages for the pro-stadium advocates. First, many of these cities are very sensitive on the question of their image; second, there are fewer facts to get in the way. Many of the cities they studied are in the "Rust Belt" - Cincinatti, Cleveland, and Pittsburgh each had been manufacturing centres that have seen large scale job losses and factory closures; the Fortune-500 companies that are there are now represented by a headquarters. The cities are sensitive to the idea that if they lose their teams they will no longer be a "major league city"; the idea was that without the teams Cincinatti would be another Louisville, Cleveland would be Akron, Denver would be "Omaha in the mountains".
That idea was much less effective in Philadelphia. Philadephia had other reasons to feel good about itself, and in particular had a thriving downtown. Instead their advocates had to stress economics, which was part of the reason that it was much harder for them to get their stadiums than it was in Pittsburgh.
The teams themselves were strongly in favour of have individual stadiums rather than sharing (which had been the case in most of the stadiums before the building boom). It wasn't so much the stadium that they didn't want to share as the revenues: luxury box sales, naming rights for seats and the stadium, and parking revenues all generally went to the team itself. Immediately after building the new stadiums there was a honeymoon period where ticket sales improved, but that didn't last and in some cases the turnaround was dramatic: in Phoenix, season ticket sales fell 30% between the first and second seasons, and a similar story happened in Pittsburgh and Milwaukee.
