WashU Expert: St. Louis CITY SC shows stadiums do not have to be an economic drain

Sports arenas are notoriously bad deals for taxpayers and local economies.

St. Louis’ new Major League Soccer team, CITY SC, is breaking that mold, though, according to Peter Boumgarden, director of the Koch Family Center for Family Enterprise at WashU Olin Business School.

In a recent Conversation perspective, Boumgarden and co-author Nathan Jensen from the University of Texas at Austin, wrote about important lessons from St. Louis’ foray into MLS.

According to Boumgarden and Jensen, one major advantage for CITY SC is that it had the backing of a local business and philanthropic heavy hitter, the Taylor family of Enterprise Mobility. While the project did receive $34.5 million in tax incentives, the rest was privately financed by the Taylors.

“It’s not surprising that family ownership would be a good fit for a civic project: Research shows that family businesses — especially those that are committed to a community — tend to value nonfinancial objectives as well as pure profit, and are willing to wait longer to see returns on their investment. This kind of 'patient capital' is often a key to long-term civic improvement projects,” Boumgarden and Jensen wrote.

But even without the support of a local family like the Taylors, there are still lessons to be learned from CITY SC. Read more about what Boumgarden and Jensen say the team did right to ensure maximum economic impact, community investment  and profitability.

Bonus Material: In May, Peter Boumgarden hosted Andrew C. Taylor, Carolyn Kindle, Jason Thein, Lee Broughton and Neal Richardson on his “The Owner’s Box” podcast to discuss the Taylor family’s decision to bring soccer back to St. Louis and their plan to make an impact beyond the pitch.