Economic Analysis of Tennessee's New Football Stadium

For years, Americans have debated whether or not tax payers money should be used to fund stadiums. Do the hundreds of millions that taxpayers pay ever see a return? On November 17, 2023, the state of Tennessee announced a plan to build a 2.1 billion dollar Nissan stadium that would replace its old stadium. It will be completed in 2027, with a lease running for 30 years. As part of the plan, the Titans, Nashville’s football team, will pay 840 million dollars, while the other 1.26 billion will be publicly funded (Forbes, 2023). 

Surveys indicate that 61% of Tennessee residents disapprove of this decision, indicating widespread distaste. Within regions, disapproval rates vary, with 57% of Middle Tennesseans, 69% of Eastern Tennesseans, and 55% of West Tennesseans expressing dissatisfaction. In terms of income distribution, the middle and western regions have higher levels of income compared to the more rural eastern region (Statistical Atlas, 2018). This disparity could be attributed to a variety of factors, such as lower-income individuals being unable to afford higher taxes or stadium tickets. 

The state of Tennessee defended the stadium, citing a number of economic benefits. Under their current agreement, the state is legally bound to provide a football team until 2039. According to state estimates, repairing and renovating the existing stadium would cost between $1.75 billion and $1.95 billion, nearly as much as constructing a new one. Additionally, the state stated it would support local business, goods, and laborers. It also projected that the stadium would have a 3 billion dollar impact on the local economy (Titans, 2023). 

While these economic claims seem promising, it is unlikely that the stadium will realize all these benefits. For example, the Atlanta Braves stadium, built in 2017 in Cobb County, was projected to generate 20,000 jobs and over 29 billion dollars of revenue. However, the county is now losing $15 million annually due to the taxes required to maintain the stadium (Klawans, 2022). 

However, there have been recently-built stadiums that provided positive economic impacts in their communities such as the Allegiant stadium in Las Vegas (2023) and Sofi Stadium in Los Angeles (2020). In 2022, these two stadiums were the most profitable stadium venues for music concerts (Phenix, 2022). 

One key factor is that both states hosted a Super Bowl within three years of opening their stadiums, which led to an additional $30 to $130 million in economic activity (Styf, 2022). 

It is not a surprise that new stadiums can bring positive returns. As state-of-the-art venues, they attract major events like the Super Bowl or performances by popular artists. Additionally, these stadiums are often built at prime locations, which are frequent vacation destinations. However, long-term outcomes can be more volatile. For example, the Los Angeles Rams initially left the state in 1994, showing that the benefits of a team presence may not last forever. Before their departure, the Rams faced challenges with an outdated stadium, poor attendance, and difficulties generating revenue and stimulating the economy.

Positive early returns are also expected for the Titans stadium. Despite still being under construction, there are already talks of Nashville hosting a future Super Bowl (Breech, 2024). Also, as a new and modern venue, it will likely be a popular venue for shows and concerts. However, given that Nashville is not as popular of a destination as Los Angeles or Las Vegas, the city may not be able to attract as many tourists. In 2018, before either new stadium had been built, Los Angeles hosted 50 million visitors, Las Vegas welcomed 42.1 million, while Nashville saw just 15.2 million (Los Angeles Tourism, 2018; Applied Analysis, 2019; Visit Nashville, 2019). Fewer visitors could lead to less revenue, limiting the economic returns caused by the stadium. 

One major concern is whether the money used to fund the stadium should be spent on more critical matters. Tennessee ranks in the bottom ten states in U.S. public school funding per pupil (World Population Review, 2024). Additionally, Tennessee is among the top 10 states with the lowest funding towards mental health, despite mental health initiatives being a priority for many residents. The biggest concern across the entire state, regardless of region, is the economy, which the stadium will hopefully improve in the short term. However, as was seen with the Atlanta Braves stadium, there is no guarantee that these economic benefits will be realized in the long run.

To justify building a stadium, states must evaluate whether the entertainment value and the potential economic prosperity outweigh other public needs and the overall well-being of its individuals. Given the needs of its constituents, the heavy financial burden on its citizens, and the public opinions of its citizens, a new, expensive publicly funded stadium is a poor choice for the state of Tennessee.

Edited by Justin Hahm

References

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