Question

Case 1 – Stadiums, Taxpayers, and Sports Millionaires
In Calgary, Alberta, the Mayor, Naheed Nemshi, and City Council were considering a proposal by the
owner of the Calgary Flames to build a new arena and recreation complex. Calgary Sports and
Recreation Corporation, which includes the NHL’s Calgary Flames and the Canadian Football League’s
Calgary Stampeders, proposed a $890 million arena plus a combination stadium/field hourse for the
downtown area. The complex would be financed with the corporation putting in $200 million, the City of
Calgary $200 million, $250 million raised by a ticket tax, and $240 million by a community development
levy where the taxpayers would be repaid by increased economic activity. In effect, Calgary taxpayers
would be providing $440 million plus the land.
Similar schemes have been proposed by the owners of professional sports teams in other Canadian and
American cities. Most involve wealthy franchise owners expecting taxpayers to subsidize the
construction of new facilities. Sometimes pressure is applied by suggesting that the team will relocate to
another city unless the new subsidized venue is not forthcoming. Often the new facilities are promoted
as a stimulant to renewal of downtown areas and creating economic spinoffs thus having a multiplier
effect.
Critics argue that the cities are victims and saying that taxpayers are giving money to the owners and
well-paid players. Numerous studies, including those by academics, have found that subsidizing new
stadiums does not generate new jobs, growth, or tax revenue. The wealthy owners of the sports
franchises get a new facility and new revenue streams thereby increasing their profits. The subsidization
is referred to as another form of corporate welfare. These critics state that if the new facility is not
economically viable, then it should not be built.
Yet many cities do get involved in the schemes. Some believe that economic benefits are generated.
Others simply get involved for emotional reasons: civic pride, the thrill of the game, and cheering for the
“home” team.
The mayor and councilors are still considering the proposal.
Questions
1. Who are the stakeholders involved in the construction of the new sports facilities?
2. Can the building of these sports facilities be justified, and if so, on what rationale?
3. Should cities become involved in this type of private-public partnership?

Answer 1

Answer1= The different stakeholders who are involved in the given case are the taxpayers, sports business and the local government. The taxpayers are interested as their tax money has to be used, while the sports businessman are involved to develop the sports facility to get the subsidy while the local government is involved as it has to take the decision on the basis of the common public's will whether to grant the subsidy or not.

Answer 2= In my opinion, there are many positives if the port facility is created. Some of which is there is the likelihood that the development of these sports facilities my bring some business activities in the cities and it can help in improving the infrastructure and employment opportunity in the area. Secondly, the development of these facilities will also provide an opportunity for the local players to play and practice in these facilities and thus they can also be part of the sports league in the future. Thirdly, these facilities can become the source of pride, amusement, and joy for the residents.

Answer 3= Looking at the benefits that a city can have those are explained in the above answer, In my opinion, having this sort of public-private association will be quite useful. Therefore there is no harm of having this type of public-private relationship.