$3.2 billion in tax breaks ... for pro sports stadiums

This company is turning football helmet design on its head
This company is turning football helmet design on its head

The NFL season kicked off Thursday at Sports Authority Field, home of the Denver Broncos. The stadium is just one of 36 that have received a total of $3.2 billion in tax breaks since 2000.

That's according to a new study from the Brookings Institution, which looked at 45 stadiums in the four major sports leagues that have been built or renovated in that time.

The stadiums were financed in part with municipal bonds, which are issued by local governments. Interest on those bonds is exempt from federal taxes.

Brookings calculates that the federal government lost $3.2 billion in tax revenue -- and $3.7 billion if you count the windfall that high-income bondholders get.

The most expensive across all leagues was baseball's Yankee Stadium, which opened in 2009 and cost $2.5 billion to build. It received a federal subsidy of $431 million, and the federal government lost a total of $492 million in potential revenue.

The NFL has built or renovated 13 stadiums using tax-exempt bonds since 2000. Major League Baseball has used bonds for 12 stadiums. The NBA has built seven stadiums with them, and the NHL has built four.

Related: Levi's Stadium, home of the 49ers, unveils rooftop farm

Ultimately, the study asserted, stadiums provide few economic benefits -- undercutting a main argument that teams use to persuade cities to finance stadiums.

Because the tax breaks are federal, taxpayers in Montana helped fund construction of the Cardinals stadium in Arizona. And people who live near teams are paying for stadium construction whether they're fans or not.

In order to qualify for federal tax exemption, cities and states can pay back only 10% of the bonds with money that comes from the stadium, such as ticket sales or the rent that the team pays to use the stadium.

Stadiums were largely built without federal funding until 1953. That's when baseball's Boston Braves moved to Milwaukee and got a new publicly funded stadium. Using federal money for construction became a trend, despite attempts by Congress to curb it.

Personal Finance

CNNMoney Sponsors