A city may make sizable operating revenues from leasing a venue to a team but still subsidize its team because

Question

Quizplus · Accepted Answer

Even if a city is generating revenue from leasing a venue to a team, they may still be subsidizing the team if they ignore the opportunity costs. Opportunity cost refers to the cost of not using the resources in their next best alternative use. For example, the city could have used the venue for other events or leased it to another organization at a higher rate, thus generating higher revenues. Therefore, if the city ignores the opportunity costs, they may not be able to cover all their costs and end up subsidizing the team.

A City May Make Sizable Operating Revenues from Leasing a Venue