if sports are so popular, then why does it have to be subsidized?
In public policy, we often make the argument that a service should be subsidized if it is important but somehow doesn’t generate enough money to be produced by the market. However, sports seems to fly in the face of that intuition. Sports is a heavily subsidized leisure activity even though it clearly has a viable market. For example, colleges subsidize sports teams, cable tv subsidizes sports channels, and cities subsidize stadiums. National governments will even subsidize large events, like the Olympics or FIFA events. And in many cases, the money is never recouped. Why?
A few possible answers:
- Sports legitimize organizations.
- The average voter is a sports nut.
- Public choice: administrators approve sports because it helps them, though not other people.
Other explanations? I am not anti-sports, but as a billion dollar industry, it seems as if sports doesn’t need any additional help. sports subsidies seem deeply misguided.