The Economist | Subsidising professional sports: If you fund it, they may come
This is something that JT and I talk about quite often relating sports and economics. The public subsidies for sporting arenas are difficult to make up in the best of circumstances, and are equally (if not more difficult) to quantify. Our sports facility management class actually attempts to address some of these issues.
This is not to say that I could conceive of no circumstances whatsoever when these make sense. However, as with all public subsidies you need to keep in mind impacts on competition, crowding out, and changes in the incentives provided to businesses.
We also need to keep in mind the impact on locales that lose franchises or end up with underutilized facilities. These issues can be equally vexing for local policy authorities and create long run issues for local tax bases.