Andrew Zimbalist answers questions on the economics of sports over at the Freakonomics blog. Here's a small bit on his answer to whether cities should subsidize sports.
If pro sports teams cannot be relied upon to promote economic development, as the literature suggests, is it still sensible for a community to provide public funding to support the facility construction? It depends.
Cities spend millions of dollars to support a variety of cultural activities that are not expected to have positive economic effects, such as subsidizing a local symphony or maintaining a public park. Sports teams can have a powerful cultural or social impact on a community. If that effect is valued by the local residents, then they may well decide that some public dollars are appropriate. However, if the public or its political representatives are trying to make the case that a team or a facility by itself will be an important development tool, then the electorate should think twice before opening its collective wallet.