How football stadiums can turn into financial disasters

They're getting more expensive to build and operate - and increasingly, local and state governments around the country are being asked to pony up. It's often not in the form of a direct taxpayer subsidy (you can't get away with that in these fiscally challenging times), but rather hotel taxes and other incentives that eventually funnel back to the developer or team owner. Let's also not forget sky-high ticket prices. All of which is another reason why the proposed downtown stadium needs a close and unhurried look. The Atlanta Journal-Constitution has a good explainer on what's going on. Some snippets:

Experts say unrealistic revenue projections and the skyrocketing construction cost of sports stadiums, especially football behemoths, is making it increasingly hard for the facilities to generate enough cash to keep pace with expenses, namely debt service. That has spelled trouble for some cities where the new facilities have been paid for with a blend of public and private dollars. Indianapolis has hiked tourism-related taxes and Cincinnati is selling a public hospital to pay for flashy new arenas years after they were built.

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Even the Super Bowl, which the NFL has used recently as a carrot to convince cities to build new stadiums, has come with a price tag rather than a profit. Indianapolis, which hosted the nation's most-watched sporting event in February at Lucas Oil Stadium, had expected to spend $450,000 more on the game than it made in revenue, mostly because of public safety expenses. The city revealed earlier this month that figure was closer to $1.3 million. "The cost of big stadiums have gone up exponentially in the last two decades," said Robert Boland, a professor of sports management at New York University's Tisch Center for Hospitality, Tourism and Sports Management. "That has created a challenge for officials to make revenue projections, which are getting harder and harder to meet."

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Despite the economic realities, cities continue to pursue new stadiums because of an industry "arms race," the experts said. Owners don't want to be last on the Forbes list of "most valuable teams" and elected leaders don't want to be the one who loses a team to another city while in office. They will work to convince the public that the benefits outweigh the risks and that they have the formula for success. "In part, it reflects the import some people put on having a major league sports team," said Heywood Sanders, a professor of public administration at the University of Texas at San Antonio. "Los Angeles has not died because it does not have the Rams."