Budget Crunch Sidelines New Super Stadium Construction

Some 80,000 people are expected to watch Super Bowl XLV inside Cowboys Stadium in Arlington, Texas. Finished in 2009 at a cost of $1.15 billion, it's one of the most expensive sport 'palaces' ever built.

Photo by: Steve Carlton Dallas Cowboys Stadium, home of the 2010 Super Bowl, cost some $1.5 billion to construct

To help finance the stadium's dozens of luxury suites, upper end eateries—and the world's largest high-definition video screen—local officials increased the sales tax, as well as those on hotel rooms and car rentals while floating some $325 million in bonds.

But as states face budget busting deficits—an estimated total of $140 billion for all 50 next year —the game clock may have expired on subsidized stadiums.

"With the Recovery Act funding nearly exhausted, states and cities are being forced to downsize and prioritize their spending," says Alan Wohlstetter, who chairs the infrastructure practice at the law firm Fox Rothschild. "Will cities replace a 100 year old school, a 50 year old bridge or 18 year old sports stadium? My bet is not on the sports stadium."

"For cities in states that are struggling financially, sport project spending makes a bad situation worse," says Emily Sparvero, assistant professor at Temple University's Sport Industry Research Center.

Philadelphia is a good example, says Sparvero. "The city has a high debt burden, which is due in part to the funding it provided for the new stadiums for the NFL's Eagles and Phillies (baseball team). The city is now perceived as a very high credit risk, which makes it more difficult and costly to issue additional bonds for money it needs now."

While public funding may be in short supply, there's no shortage of teams looking for new or re-furbished stadiums.

The NFL's Minnesota Vikings want a new stadium, especially after part of the roof of the team's current home field collapsed under the weight of a heavy snow storm in December.

The Atlanta Falcons have been trying to move from the Georgia Dome they share with Georgia State University's college football team, to a place of their own for the past three years.

There are even plans in Los Angeles to build a stadium to attract an NFL franchise. The city hasn't had a pro football team since 1995— after the Raiders and Rams moved to Oakland and St. Louis, respectively. Several pro baseball teams, like the Chicago Cubs, want their stadiums updated.

Turning any one of those field of dreams into reality won't be easy, say experts.

"It's difficult even in the best of times to fund a sports stadium," says Ross Taylor, a lawyer  who specializes in corporate and lease financing at the firm, Kelley Drye & Warren. "And these days it may be near impossible."

Public assistance hasn't always been a building block for sport facilities. It wasn't until after World War II that subsidized stadiums became a game plan.

Decades before the phrase became a cliche, Milwaukee, Wisconsin took an 'if you build it, he will come' approach in 1950 to get a major league baseball team by building a stadium with public money to woo the then Boston Braves—who wanted a new stadium.

The Braves did go to Milwaukee—the first time a MLB team moved—only later to leave Milwaukee for Atlanta, Ga.

As loyal fans know, other sport franchises did the same. Baseball's Brooklyn Dodgers and New York Giants, the NFL's Rams, Raiders, Colts and Cardinals and the NBA's Seattle Supersonics—recently reborn as the Oklahoma City Thunder—are all examples of teams moving to cities that used public funds to help build new or better facilities.

Source: Milwaukeebraves.info Milwaukee built a stadium with public funds in 1950 to get a major league baseball team

To many, team migrations confirm the overwhelming power of pro athletics. Others say it's just the business of sports.

"Moving a club is never easy or simple," says Irwin Raij, a partner and vice chair of the sports industry team at Foley & Lardner law firm and has handled recent stadium financing. " I think teams would prefer not to move but they are under pressure to improve in order to keep fans coming and sign free agent players. You need good stadiums for that."