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Selling the Game: Estimating the Economic Impact of Professional Sports through Taxable Sales
Abstract
Sports leagues, franchises, and civic boosters tout the economic benefits of professional sports as an incentive for host cities to construct new stadiums or arenas at considerable public expense. Past league‐sponsored studies have estimated that new stadiums, franchises, and mega‐events such as the Super Bowl increase economic activity by potentially hundreds of millions of dollars in host cities. A detailed regression analysis of taxable sales in Florida over the period extending from 1980 to 2005 fails to support these claims. New stadiums, arenas, and franchises, as well as mega‐events, appear to be as likely to reduce taxable sales as increase them. Similarly, strikes and lockouts in professional sports have not systematically lead to reductions in local taxable sales.
... This research indicates that being a game booster is a new profession, promising higher incomes than usual. Then, the authors consider this recent phenomenon as socioeconomic stratification [8,17,18]. This phenomenon appears in the social cognition of young people looking for a livelihood due to liberalised mobile networks [19][20][21]. ...
... Moreover, society intensively changes the potential cultures of young people's intellectual opportunities, transforming them into flexible, agile, and persuasive assets. The second contribution is a demand for game developers to consider the emergence of young people's intellectual opportunities and moral hazards, which can cause selfish motives [17,[48][49][50]. This study argues that the game developers must tighten their games' account systems with a rigid and secure gamer identification, so gamers cannot exchange or trade their accounts with each other. ...
... Maybe, strengthening the gamers' accounts is mandatory with multiple biometrical or physical recognition needed to gain access to play the game. Thus, there is still some economic opportunism in the mobile social networks; the game management systems can eliminate the intellectual opportunism and moral hazards of the young people's selfish motives [9,10,16,17]. In other words, this process can raise the knowledge level of young people's awareness, so they retain adaptive, agile, and flexible attitudes and behaviour, which are more beneficial for their future lives. ...
This study investigates the emergence of intellectual opportunism for game boosters in mobile social networks. It shows the supply and demand for upgrading game levels in mobile social networks. These supply and lucrative demand highlight a new temporary profession as game boosters. Game boosters facilitate framed newbie gamers who want to play at a higher game level without playing for a long time. This emergence of professionally game boosters is due to economic opportunism, promising their potential future incomes. Moreover, opportunistic mobile social networks (OMSNs) support the muscular appearance of the game booster profession. On the other hand, this study demonstrates that mobile social networks exploit hedonistic human needs by reflecting their behaviour and social relationships when building efficient and trustworthy business contracts. This study presents uniqueness supported by critical reasoning. First, it shows that the game booster phenomenon has emerged as a contemporary profession in society, promising future cash inflows above the average salaries of typical jobs. Second, this research demonstrates the sequential logic of economic opportunities, intellectual opportunism, and mobile social networks, constructing game boosters’ income generating. Nevertheless, this study acknowledges that the game booster profession has low integrity due to its members’ inconsistent and unprincipled virtues.
... Hawaii is not alone in producing large, positive estimates of sports-related tourism spending. In comparison, academic studies of mega-events either fail to find any increase in measurable economic activity associated with the event (Baade and Matheson, 2001, 2004Baade et al., 2008;Coates and Humphreys, 2002;Maennig, 2008, 2009;Jasmand and Maennig, 2008;Porter, 1999) or find increases that are a fraction of those claimed by boosters (Baumann et al., 2012;Coates, 2006;Coates and Depken, 2011). ...
... Thus, the impact of an event can be estimated by examining a local economy in a year that an event is held in comparison with another year in which when the event is played elsewhere. Similarly, Coates (2006), Coates and Depken (2011), and Baade et al. (2008) examine monthly taxable sales data and rely on differences in the numbers or types of games played during specific months to estimate the impact of major sporting events on tax receipts. ...
We use daily airplane arrival data from 2004 to 2015 from Hawaii’s Department of Business, Economic Development, and Tourism to determine the net change in arrivals around a variety of sporting events. We find that only one event generates a positive and significant net impact on airplane arrivals: the Honolulu Marathon, which generates roughly 9800 additional arrivals. No other sporting events result in a measurable increase in arrivals including, notably, the National Football League’s Pro Bowl, which receives the largest subsidy from the state’s tourism authority.
... This has been especially problematic for governments when examining their national economies and accounting for the benefits of tourism, as the output of traditional industries cannot be easily quantified and identified (Spurr, 2006). Furthermore, there has been criticism of how economic impact studies have been conducted with exaggerated positive economic impacts (Baade et al., 2008;Crompton & McKay, 1994;Jackson et al., 2005;Nooij et al., 2013). ...
Purpose: Nairobi, the vibrant capital of Kenya, stands as a significant urban center attracting tourists both locally and internationally. This research investigates the multifaceted role of urban tourism in promoting sustainable development within Nairobi City County's economy. It explores the intricate connections between tourism and sustainability, proposing strategies to mitigate adverse effects while enhancing the positive impacts of urban tourism, all aimed at nurturing a sustainable future for Nairobi. Methodology: This study utilized a qualitative approach to fulfill its exploratory objectives, incorporating semi-structured interviews, participant observation, informal discussions, and document analysis. Conducted in Nairobi City County, the research engaged 24 local urban stakeholders, revealing that the tourism sector creates numerous job opportunities, especially for informal vendors and small to medium enterprises. Main Findings: The findings indicate that urban tourism not only generates employment but also stimulates local investments, increases government revenue, and benefits community members. This contributes to a sustainable economic framework that supports the broader community. Implications: As the number of visitors grows, so does the demand for improved transportation and public amenities. This surge leads to enhanced urban infrastructure that serves both tourists and residents alike. Novelty: By effectively incorporating urban tourism into a sustainable development framework, Nairobi has the potential to secure immediate economic gains while building long-term resilience and preserving cultural heritage through strategic planning and collaboration.
... When the body of the literature is reviewed, it is clear that studies on international sports organization and sports awareness are scarce. When studies that differ from our research are examined, it is discovered that international sports organizations influence the advertising perceptions of intercultural students (Andrews and Lysonski, 1991), affect financial support and development (Aninat, 2002), contribute to the sports economy (Baade, 2008), and develop international promotion and strategy (Dunn, 1976), among other things. The findings, though indirect, do have an impact on sports awareness. ...
The focus of this study is to look into the relationship between international sports organizations and sports awareness, taking into account factors such as gender, education level, individual engagement with sports, and family involvement. The research study group comprised 168 individuals, 77 female and 91 male, who were picked utilizing an easily available selection technique. The study used a personal information form developed by the researcher, an Attitude Scale towards International Sports Organizations, and a Sports Awareness Scale. The data was descriptively evaluated using the independent samples T-test, one-way ANOVA, Pearson Correlation analysis, and SPSS 25.0 software. The t-test results revealed a significant difference in attitudes towards sports awareness based on gender (p<.05). One-way ANOVA analysis revealed substantial variations in attitudes towards international sports organizations and sports awareness based on education level, relationship with sports, and family interest in sports (p<.05). The correlation analysis used to explore the relationship between the participants' opinions towards international sports organizations and their degrees of sports awareness found a high positive correlation. According to the study's conclusions, it is necessary to host more international sports organizations and conduct research to raise public awareness in order to create sports consciousness.
... Various methods have been used to assess the economic impact of mega-events, such as multiplier analysis, input-output models, linkage models, econometric models, input-output analysis, cost-benefit analysis, and computable-general-equilibrium analysis, and computable general equilibrium models (Andersson, Armbrecht, and Lundberg 2008;Baade, Baumann, and Matheson 2008;Lee and Taylor 2005;Preuss 2005;Taks et al. 2011). Jago et al. (2010, Li and Jago (2013), and Jago (2010) present a literature review on the potential positive and negative impacts of mega-events for host destinations and conclude that the economic evaluation of mega-events has often fallen short of state-of-the-art assessment standards. ...
... Various methods have been used to assess the economic impact of mega-events, such as multiplier analysis, input-output models, linkage models, econometric models, input-output analysis, cost-benefit analysis, and computable-general-equilibrium analysis, and computable general equilibrium models (Andersson, Armbrecht, and Lundberg 2008;Baade, Baumann, and Matheson 2008;Lee and Taylor 2005;Preuss 2005;Taks et al. 2011). Jago et al. (2010, Li and Jago (2013), and Jago (2010) present a literature review on the potential positive and negative impacts of mega-events for host destinations and conclude that the economic evaluation of mega-events has often fallen short of state-of-the-art assessment standards. ...
Mega-events such as the Olympic Games and the FIFA World Cups pose major financial and management risks to the public sector. To better understand and anticipate these risks, this paper examines the determinants of revenues, costs, and profitability of these events. In a longitudinal analysis of 43 events between 1964 and 2018, our study found a positive correlation between a host country's GDP per capita with both the revenues and costs of these mega-events. While GDP is not correlated with profitability, greater economic freedom is, suggesting that countries with less government intervention, regardless of their wealth, produce better financial results.
... If teams produce positive production and consumption externalities, as proponents claim they do, there should be measurable pecuniary effects in spending, income, sales tax collections, or jobs. Indeed, academic studies have operationalized economic impact by using all of these variables (e.g., Baade, 1996;Baade, Baumann, & Matheson, 2008;Baade & Dye, 1990). A single variable is clear, direct, and obviates the need for ex ante assumptions. ...
There are three problems with economic impact. First, it is an exceptionally complicated estimation problem full of assumptions and fraught with errors. Second, despite this weakness, it is treated as the de facto standard report for event bidders and stadium proponents. This has led to ubiquitous, unchallenged reporting of sports impact as unequivocally positive. Finally, as a result, the public now has an unwavering belief in the existence of positive economic impact from sports. Evidence from a longitudinal study of Super Bowl 50 supports this conclusion. If it is not possible to change the public belief in the meaning or usefulness of economic impact, the solution is to reframe the conversation in terms of financial and redistributive analysis. 2
... This facilitates identification of the impact of particular events as well as the presence of professional teams playing home games during the regular and post-season periods. Baade et al. (2008) examine four large Florida cities home to major-league teams and mega-events. These cities also experienced work stoppages, league expansions, new stadiums, and other nonsports-related economic shocks over the sample period. ...
Local governments routinely subsidize sports stadiums and arenas using the justification that hosting professional franchises produces economic development and social benefits in the community. The prevalence of venue subsidies generated an extensive and vibrant research literature, which spans over 30 years and includes more than 130 studies. We chronicle this body of research from early studies of tangible economic impacts in metropolitan areas, using basic empirical methods, through recent analyses that focus on sublocal and nonpecuniary effects and employ more sophisticated empirical methods. Though findings have become more nuanced, recent analyses continue to confirm the decades‐old consensus of very limited economic impacts of professional sports teams and stadiums. Even with added nonpecuniary social benefits from quality‐of‐life externalities and civic pride, welfare improvements from hosting teams tend to fall well short of covering public outlays. Thus, the large subsidies commonly devoted to constructing professional sports venues are not justified as worthwhile public investments. We also investigate the paradox of local governments continuing to subsidize sports facilities despite overwhelming evidence of their economic impotence. Our analysis informs academic researchers and policymakers to motivate future studies and promote sound policy decisions guided by relevant research findings.
... The NETS sales estimates provide a broader measure of economic activity than taxable sales, which is commonly used in sub-state level analyses. Baade et al. (2008) and others argue that taxable sales are ideal measures of sports and sports stadium impacts given the direct connection between taxable sales and sporting event spending. Income and employment measures are problematic given the small size of sporting events relative to overall economic activity and the likely economic fluctuations in a large metropolitan area. ...
This paper examines distance‐based effects of the introduction of a National Basketball Association (NBA) team on establishment‐level sales. Using a unique micro dataset with precise geographic location information and industry detail, we apply spatio‐temporal estimation strategies following Harger et al. and Ahlfeldt and Kavetsos. We build on the literature by focusing on sales activity, a broad measure of economic activity, for industries related to the NBA‐product. Our application considers the relocation of the NBA’s Seattle franchise (Supersonics) to Oklahoma City (Thunder). The results reveal spatially differentiated impacts that would be obscured using data aggregated over space or industry. Specifically, food establishments exhibit increased sales and entertainment establishments exhibit decreased sales relative to establishments in the outer most ring of the study area.
The leading explanation for decades of evidence that sports facilities generate no metropolitan-level economic impacts is that they redistribute, rather than increase, economic activity within metros. This chapter offers a test of the intra-metropolitan redistribution hypothesis. The Dallas Cowboys moved from Irving to Arlington in 2009, a 12-mile relocation within the Dallas-Fort Worth metro. We use the synthetic control method to model sales tax revenue changes within each city when the Cowboys moved. We further explore how the relocation affected different industries within and across each city. We find that total sales tax revenue in both cities increases following the relocation of the Cowboys, but the effect size is trivial and roughly equal to a rounding error in the cities’ budgets. We also find that the new stadium increased spending in the accommodation, food services, and entertainment industries, but these were offset by relatively large losses in retail spending. Our findings help explain metropolitan-level null effects in consumer spending, giving empirical weight to arguments that professional sports do more to redistribute tax revenue streams than grow them.
This paper estimates the public benefits to homeowners in cities with NFL franchises by examining housing prices rather than housing rents. Similar to Carlino and Coulson (2004), we find that the presence of an NFL franchise has no effect on housing prices in the entire SMSA, but unlike their previous finding, the presence of an NFL franchise also has no effect on housing prices in the central city. Furthermore, we test whether the presence and size of the subsidy to the team for NFL stadium construction affects values and find some evidence that higher subsidies lead to lower house prices. This suggests that the benefits that homeowners receive from the presence of a team are negated by the increased tax burden due to the subsidies paid to the franchises.
The “Baade consensus,” i.e., the non-significance of staging major sporting or of the construction of new sports stadiums for employment, income, or tax revenues, was valid for some two or three decades. Some recent publications question the consensus. This contribution finds that these newer studies suffer from problematic modeling of the development trends that would have arisen without the event, from potential sample selection biases, and from potential variable selection biases. Furthermore, it is notable that most of the booster publications use highly aggregated data such as national GDP or national exports (often on a yearly basis), whereas the previous work from the Baade consensus used increasingly disaggregated datasets. Also, booster estimates imply multipliers which seem much too large compared to empirical results in other areas. The contribution also indicates that the studies on the effects of mega sports events may be a case of “retire statistical significance” as the power of the tests may be too low to uncover or exclude significant and economically plausible effects with a reasonable probability.
In the last 30 years, there has been a significant increase in the construction of sports stadiums for professional teams in North America, and this expansion has been accompanied by the creation of a large research literature. This chapter argues that the expansion of investment in sports stadiums in Europe has been roughly comparable over the same period but that the research literature has been more patchy. The chapter identifies several ways in which this presents opportunity for future research.
A 1999 study by Dennis Coates and Brad R. Humphreys found the presence of major sports franchises to have no significant impact on the growth rate of per capita personal income and to be negatively correlated with the level of per capita personal income for a sample of all cities that had been home to at least one franchise in any of three professional sports—baseball, basketball, and football—at some time between 1969 and 1994. This paper returns to the questions Coates and Humphreys asked using an additional 17 years of data and a number of new stadiums, arenas, and franchises. The data cover 1969–2011 and add hockey and soccer franchises to the mix while also including all standard metropolitan statistical areas rather than just those that housed franchises in the major professional leagues. The analysis also adds two new dependent variables: wage and salary disbursements and wages per job. The results here are generally similar to those of Coates and Humphreys; the array of sports variables, including the presence of franchises, arrival and departure of clubs in a metropolitan area, and stadium and arena construction, is statistically significant. However, individual coefficients frequently indicate harmful effects of sports on per capita income, wage and salary disbursements, and wages per job.
I examine the effect of major sports stadium construction in the Minneapolis-St. Paul-Bloomington-MN/WI MSA on local construction industry employment. I use publicly available quarterly data from the first quarter of 2001 to the fourth quarter of 2019, and I employ ARCH methodology. During the sample period, four major sports stadiums were built in the metro area. I find little evidence that stadium construction correlated with a change in construction industry employment levels. However, the mathematical signs on the significant parameters are not consistent with each other. Moreover, the significance is not robust to alternative model specifications.
We use daily mobile foot traffic data covering major league sports facilities and the surrounding commercial establishments in the US to pin down the size and the spatial distribution of foot traffic spillovers from sports facilities to local businesses. By employing the fixed effects and the IV estimation strategies, we show that the spillover benefits are heterogeneous across sports and business sectors. We find that 100 baseball stadium visits generate roughly 29 visits to nearby food & accommodation businesses and about 6 visits to local retail establishments. While the estimates for football stadiums are comparable, basketball & hockey arenas do not appear to generate significant spillovers for the surrounding businesses.
Sportpolitik stellt ein institutionell komplexes und dynamisches Politikfeld dar. Ein adäquates Verständnis der aktuellen Sportentwicklung setzt die Integration politikwissenschaftlicher Erkenntnisse voraus, da sich der Sport durch die Wiedervereinigung im Jahr 1990 deutlich politisiert hat. Staatliche Akteure und demokratische Öffentlichkeit zeigen ein größeres Interesse an sportpolitischen Fragen. Sowohl auf internationaler, europäischer als auch nationaler Ebene ist zu beobachten, dass politische Akteure jetzt willens sind, sich nunmehr auch gegen Sportverbände durchzusetzen. Schließlich wird der Sport als Instrument für sehr unterschiedliche politische Ziele eingesetzt, obwohl seine Effektivität nicht immer klar ist. Die gegenwärtigen Debatten über die Legitimität der internationalen Sportverbände und des Leistungssports lassen weitere Veränderungen erwarten. Dieser Beitrag ist Teil der Sektion Geschichte des Sports, herausgegeben vom Teilherausgeber Michael Krüger, innerhalb des Handbuchs Sport und Sportwissenschaft, herausgegeben von Arne Güllich und Michael Krüger.
This paper provides an empirical analysis of how various local political, cultural, and sporting events affect daily room rentals in the Austin, Texas hotel market. In an innovation of previous studies that use daily hotel data, we differentiate how events affect different tiers of hotel rooms ranging from economy hotels to luxury hotels. The results show disparities between events with regard to the quality of hotel demanded. The analysis is extended to daily hotel revenues generated in the six tiers of hotel rooms and how the various events contribute to local and state hotel-occupancy tax revenues.
Though most studies find that sports stadiums are not strong drivers of economic activity in metropolitan areas, localized development effects may be sufficient to justify public subsidies for a host municipality if circumstances are favorable. This analysis examines the economic ramifications of an intra-metropolitan area relocation of Atlanta’s professional baseball team from a traditional standalone downtown stadium to a new stadium-anchored mixed-use development in suburban Cobb County. Using the synthetic control method, the study employs metro-Atlanta counties to construct a counterfactual outcome for estimating changes in sales tax revenue after the ballpark opened. The findings indicate a net increase in taxable sales in the county; however, the magnitude of the effect is small and not statistically significant. Though net new spending is evident, approximately one-third of the project’s sales appear to derive from crowding out other local economic activity. In total, added tax collections fall well short of covering the public subsidies provided by Cobb. The stadium’s limited economic impact, despite its favorable location and ancillary mixed-use development, further supports past findings that sports venues are poor investments as economic development projects.
In this article we critically explore the social media strategy of the successful Australia-New Zealand 'As One' joint bid for the FIFA Women's World Cup 2023™. We explore how the As One bid harnessed Twitter to communicate a hosting vision that appealed to multiple audiences while strategically, and successfully, resonating with contemporary FIFA politics. We adopt quantitative and qualitative content analysis methods to develop the constructed presence and narrative patterns from the As One bid's Twitter activity. Our findings suggest content relied on two primary 'legacy' narratives which both conformed to current FIFA strategy and broader social and regional politics: growing football participation among women and girls and strengthening cultural, economic, and political relations in the Asia-Pacific. Ultimately, we argue the use of Twitter was strategic and targeted, deliberately appropriating popular FIFA narratives to build an emotive 'legacy' vision to gain support from voting members of the FIFA Council.
The city of Las Vegas, Nevada was one of the hardest hit communities in the United States during the 2008 Great Recession. As the nation emerged from the economic downturn, city and state officials worked together to create a framework through which the region could become more proactive in its future through economic diversification. That effort resulted in the creation of an urban regime, a working committee of private and public stakeholders who collaborated to offer recommendations to the governor. One such recommendation was a $750 million subsidy to build a large-scale football stadium, one of the largest sport facility public subsidy to date. This qualitative inquiry examined regime development and the decision-making process at the local and state level that led to approval of the stadium subsidy. Through a historical research approach, we examined how the Las Vegas stadium regime coalesced, and how economic conditions, politics, and ideology may have influenced the regime’s decision-making.
This paper assesses the impact of a home team's participation in a major sporting event—the Super Bowl—on the local economy. Our identification strategy is to compare the winning and losing cities of the National Football League (NFL) conference championship games under the assumption of similar pre‐trends. We use the stock market performance of public companies headquartered in these cities to capture the changing prospects of local economies attributable to Super Bowl participation. The exogenous variation in football game outcomes allows for a straightforward difference‐in‐differences approach to identify the causal effect. We show that the post‐event trends in winning and losing cities diverge despite their similar trends before the end of the regular season. Our empirical results indicate that winning the NFL conference championship game, thus the opportunity to compete in the Super Bowl, has a positive, significant effect on the local economy, particularly the manufacturing and FIRE (finance, insurance, and real estate) sectors. A similar analysis of winning the Super Bowl, however, finds no further significant effect on the local economy.
Using public goods theory as a guidepost scholars have correctly
observed that subsidies for sport venues are a product of the
monopolistic structure of major sport leagues. Without challenging the
observation that economic rent is being extracted from cities, we utilize
the municipal capitalism framework to explore the ongoing appeal of
teams to cities. We note that rising levels of economic segregation that
required local officials to aggressively pursue partnerships to offer
competitive club goods that deflect regional economic activity into their
taxing jurisdictions. After reviewing 116 published academic papers to
establish the two frameworks (public goods and municipal capitalism),
we use three previously studied case studies to assess outcomes in light
of a municipal capitalism perspective. This permits us to provide insights
into the use of various sources of public capital to deflect economic
activity with the potential to enhance economic development and tax
revenues. The work also identifies the need for additional research to
compare and contrast classical public goods theory, municipal capitalism,
and local government initiatives in an era of “fend for yourself
federalism.”
The Super Bowl is America’s premier sporting event. This chapter details basic economic facts about the game and examines the controversy surrounding the purported economic impact of the game on host communities. While the league and sports boosters claim that the game brings up to a $500 million economic impact to host cities, a review of the literature suggests that the true economic impact is a fraction of this amount.
Purpose
An economic impact study conducted in 2010 predicted that hosting the 34th America's Cup in 2013 would result in $1.37 billion in total economic benefits to the San Francisco Bay Area. The goal of this paper is to examine the ex post effects of this competition on real taxable sales in the Bay Area.
Design/methodology/approach
A panel data set of quarterly observations on taxable sales transactions for all counties in the state of California is employed. These data are explored using two estimation methodologies: difference-in-differences and synthetic control.
Findings
Results from a difference-in-differences analysis and a synthetic control analysis produce similar findings. Namely, the 34th America's Cup competition appears to have had a minimal, short-lived impact on San Francisco and no measurable impact on two nearby counties.
Practical implications
The empirical results in this paper underscore the findings of previous research showing that ex ante economic impact studies tend to overstate the net economic benefits of hosting mega-events.
Social implications
The results of this paper may serve as a warning to policy makers considering using tax dollars to host a mega-event that such events often do not generate the economic gains reported in typical economic impact studies.
Originality/value
This is the first paper to econometrically explore the impact of hosting the America's Cup on taxable sales transactions in a region. This paper also employs the relatively new empirical methodology called synthetic control.
A tourism dependent state such as Florida relies on its environment and climate to attract visitors and generate revenue. HABs can certainly have an impact on the coastal waters of the Gulf, but does this necessarily drive away tourist related activity? To determine not only if the impact of HABs is significant, but also at what magnitude, a time series econometric model was used to study effects of persistent and severe blooms on counties in Southwestern Florida, particularly Sarasota County, hit hardest by blooms in 2006 and 2018 that lasted multiple months. Lodging and restaurant sectors of the economy were found to have monthly losses of 15% and 1.75% respectively, during months when red tide was present. Neighboring counties unaffected by severe blooms did not experience significant losses to these sectors. These results support the intuition that effects of HABs reach far beyond the waters of the Gulf, and as red tide grows in frequency and severity, more economic loss could lie ahead.
Some cities strategically plan multiple small and medium-size sport events on different dates in their annual calendar of activities and avoid focusing on a single event of great magnitude. This is how the concept of a sport-event portfolio arises. This article aims to present a method to quantify the injection of sports-tourism money into a city from a portfolio of events. This methodology is applied to the portfolio of a small town with a policy oriented toward the promotion of tourism through the organization of sport events. The income generated by sports tourists in the 2017–2018 biennium is estimated using 1123 surveys conducted from four events included in the town’s portfolio. The research findings of this article are pioneers in the quantitative field of the study of event portfolios. This provides new opportunities for planning a strategy to attract tourism revenues.
The purpose of this paper is to examine citizens’ willingness to pay (WTP), in relation to having a professional first-tier football club in a medium-sized Danish municipality, when tangible economic benefits such as economic growth and/or inbound migration produced by these are absent.
Using the contingent valuation method on survey respondents, the study examines factors affecting WTP using binary logistic regression and interval regression and further extrapolates the WTP from the sample to the municipal population.
Citizens significantly value having a first-tier football club in their municipality even when tangible benefits are absent, although a large proportion of respondents stated to be against the municipality being financially involved in professional team sports clubs (PTSC). WTP is largely driven by interest in sports and the local football club. It is argued that the findings cannot be generalized across contexts.
There can be circumstances where public subsidy of PTSCs is beneficial to economic welfare. However, authorities should be careful in their evaluation of whether to subsidize PTSCs.
The study expands on existing research by informing respondents about the lack of tangible benefits produced by PTSCs, hereby focusing on WTP on an informed basis.
Using daily panel data from Detroit, we empirically explore the relationship between the National Football League (NFL) and crime in a city. We exploit the natural experiment of the Detroit Lions’ move from Pontiac, Michigan, to downtown Detroit in 2002. Pontiac is used as the treatment city and non-game day crime, other suburban cities, and other cities outside Detroit MSA are used as the comparison groups. Employing a difference-in-difference approach, we find decreases in assaults and vandalism on home game days in Pontiac relative to the control cities after the Lions’ move. We find weak evidence of a net decrease in larceny and vandalism in Pontiac on home game days following the loss of professional football. No changes in assaults and auto theft are reported. While not conclusive, our results suggest that professional football leads to additional larceny and vandalism incidents but no effects on assaults and auto theft.
We study the local economic spillovers generated by LeBron James’ presence on a team in the National Basketball Association. We find that Mr. James has a statistically and economically significant positive effect on both the number of restaurants and other eating and drinking establishments near the stadium where he is based, and on aggregate employment at those establishments. Specifically, his presence increases the number of such establishments within one mile of the stadium by about 13%, and employment by about 23.5%. These effects are very local, in that they decay rapidly as one moves farther from the stadium.
Tourism in mature and seasonal destinations, such as the Balearic Islands, should be redirected towards more sustainable products and policies. With the increasing interest in sports events as a vehicle for attracting tourism, the present study examines tourists participating in a running event, underlining the role and great economic potential they have for the destination. A sample of runners in the Palma de Mallorca Marathon is segmented. Results of the study show distinct socio-demographic characteristics for choosing the tourist destination, as well as different patterns of tourist behaviour, spending and levels of satisfaction among participants. The findings have important practical implications for the promotion of running destinations as an emerging tourism product. The results of the segmentation and the cluster analysis show the presence of four differentiated groups (named hard loyal runners, non-loyal hard runners, soft runners and non-loyal soft runners). The main recommendation to the management of the event points towards the need to captivate the most experienced runners once again and intensify efforts with newcomers. Concerning satisfaction, services linked to items such as public transport and travel costs should be improved, in addition to underlining the specific value of the climate, the hospitality of residents, as well as road closures and route signage. Finally, events organized in the destination deserve greater attention, particularly in light of the continuing globalization of event tourism and heightened competition for event tourists.
The present study examines events tourists participating in a regatta with a view to exploring their role and potential to counteract destination seasonality. A sample of participants was segmented by their socio-demographic profile, previous experience, satisfaction and expenditure. The analysis of the results showed distinct socio-demographic characteristics and motivations for choosing the tourist destination, as well as different patterns of tourist behaviour, levels of satisfaction and spending. The main conclusions of the study indicate that socio-demographic and behavioural variables reveal three major segments: moderately experienced, less experienced, and more experienced. It was concluded that small- and medium-sized sports events, such as the regatta in question, could contribute to the reduction of the effects of seasonality, and to the improvement of the economic and social revitalisation for host cities, significantly in events held during the months of lower tourism activity. The analysis of the participants in the 47th annual S.A.R. Princess Sofia race, and the analysis of motivations and levels of satisfaction should contribute towards improving the efficiency and effectiveness of the organisation of future events. This type of event, with international participation and global media coverage, could help to reposition the Balearic destination and offer alternative products to the hegemonic sun and beach. The results of this study have shown that sailing sports tourism is heterogenous, and they could be used to develop business strategies aimed at improving the marketing of the segments identified. As a sports activity, sailing races can be used as a pull factor in tourism.
The role of residents in the calculation of economic impact remains a point of contention. It is unclear if changes in resident spending caused by an event contribute positively, negatively, or not at all. Building on previous theory, we develop a comprehensive model that explains all 72 possible behaviors of residents based on changes in (a) spending, (b) multiplier, (c) timing of expenditures, and (d) geographic location of spending. Applying the model to Super Bowl 50 indicates that few residents were affected and positive and negative effects were relatively equivalent; thus, their overall impact is negligible. This leaves practitioners the option to engage in the challenging process of gathering data on all four variables on all residents or to revert back to the old model of entirely excluding residents from economic impact. From a theoretical perspective, there is a pressing need to properly conceptualize the time variable in economic impact studies.
International mega-events inject millions of dollars into host countries’ economies, yet few studies assess which citizens benefit from events and which do not. Governments justify their bids for mega-events by arguing that infrastructure projects, event-related jobs, and tourist spending benefit many citizens. However, researchers find mixed impacts on host economies and the average citizen. Scholars and activists argue that a few businesses benefit while high prices and event-specific laws exclude poor citizens. Under what conditions do poor citizens benefit from mega-events? This article analyzes original interview, survey, and participant observation data on street vendors in São Paulo, Brazil during the 2014 FIFA World Cup. The project finds that most street vendors lost money, while a minority made record profits. Those who benefited from the event used brokers, bribes, and pockets of forbearance to circumvent FIFA’s exclusionary rules.
This paper presents a novel approach for analyzing spatially differentiated impacts of a variety of entertainment attractions, including professional sports venues, convention centers, destination retail, and mega-events. Public finding is often based on the potential for such projects to stimulate economic growth. Although, the literature fails to uncover evidence of growth benefits, the analysis is typically of net aggregate benefits at the MSA level where as large attractions are likely to have differential impacts across geographic locations as well as industry types. This paper extends previous research by exploiting a unique micro dataset; the National Establishment Times series (NETs). This allows for spatial panel analysis with a focus on industries most likely to be impacted by the attraction. I find evidence of spatially differentiated impacts associated with the relocation of the National Basketball Association franchise from Seattle (SuperSonics) to Oklahoma City (Thunder). The franchise relocation attracted retail sales to the downtown area of OKC but may have decreased sales outside of downtown.
The Routine Activities Theory suggests that when there is the presence of a motivated offender, a suitable target, and the absence of a capable guardian, crime has the opportunity to occur. Large sporting events accompanied by massive tourists bring these ingredients of crime together. The purpose of this study is to find out whether the crime rates spike in the host cities during the high tourist month of the Super Bowl. Twenty-four months of crime rates on eight types of crimes were obtained for every American city that has hosted the Super Bowl. Panel Data Analysis is used to test the Hypotheses of this study. The findings do not show a spike in crime rates during the month of Super Bowl for any of the crimes examined in this study. It is in the economic interests of all stakeholders to provide a safe and secure venue free of crimes for sports tourists.
The paper proposes an original Analytic Hierarchy Process (AHP) model to analysis the attraction influence factors of our country professional sports, and building a multi-level sports attraction influence factor index system, and building the Chinese professional sports attractive model covering 18 specific factors in 5 aspects. The model is based, due to the high number of indicators and countries, on absolute measurement and expert evaluation. Model shows that the attraction factors of the professional sports of our country, sports promotion factors > visit team factors > tickets factors > convenience factors > home team factors. As a conclusion, we can summarize that our case study demonstrated that AHP method league to develop more effective marketing strategy with absolute measurement represents a simple, fast and useful tool even for a big amount of alternatives.
An extensive body of economic literature suggests that in the United States, there is little gain to a city from using tax revenues to subsidize or in other ways support professional sports franchises. One of the difficulties with these studies is the stability of professional team location. Manchester, England provides an opportunity to examine the growth effects associated with adding and subtracting top tier teams from a single sport in a single area over the course of several decades. Five different Greater Manchester area teams have been in the Premiership with as few as one and as many as four in any given year since the founding of the Premiership. Using Greater Manchester borough level data from 1991 through 2013 we look for changes in gross value added overall and in categories associated with professional sports when Premiership status changes. We find no sustained role for Premiership status, but do find a one off gain in gross value added growth when a team is promoted.
It is a common argument in Denmark that municipal involvement in professional team sports can be justified on the grounds of local impact. The use of public funds to directly or indirectly subsidise local professional team sports clubs (PTSCs) is often seen as warranted due to the PTSCs’ positive effects on local economic growth or (inbound) municipal migration. However, can PTSCs be associated with tangible effects at all? This question has never been answered properly in a European context. Based on data covering the 2008–2013 period, and using spatial panel regression models, this article examines this issue in relation to three dominant professional sports in Denmark: football (soccer), handball and ice hockey. The study finds effects for only one of the sports examined, with Danish handball clubs exercising a marginal effect on average income. Ice hockey’s effect is negative and football remains insignificant in all models deployed. Concerning migration, negative effects are found in relation to female handball clubs. These findings are consistent with previous research and have implications for local sport policies and managers. Municipal politicians, public authorities or sport managers should no longer rationalise the use of public funds for local PTSCs on the assumption of (tangible) economic effects or population growth, as it appears to be an inefficient use of public money. If policy makers want to increase municipal income or inbound migration, they should engage themselves in developing more appropriate strategies.
The NFL is clearly one of the most successful sports leagues in the world. The value of the franchises and the amount of consumer surplus generated illustrate this fact. Over the past 2 decades profits have dramatically increased. Forbes estimates that in 2010 the 32 teams combined are worth over $32 billion dollars. Media contracts have been growing at a very rapid pace and bigger stadiums are being built, as evidenced in Dallas and New York.
This article investigates the multiplier model in the context of the local impact of expenditures on sports infrastructure. There are two fundamental reasons for the lack of empirical evidence of large multiplier effects: inflated estimates of the direct effects, or the "base" increase in spending; and leakage from the local economy that diminishes the multiplier. The appropriate base expenditure of hosting a team in a city is the net new spending on local incomes and businesses plus local taxes paid. The effect of tax rates on the multiplier is less ambiguous. The full-time employment benefits are small, as the ratio of part-time to full-time employment is roughly ten to one. The role of government in stimulating economic growth has always been the subject of debate in macroeconomics. Local economic impact studies argue that stadium projects and playing host to a professional sports team are legitimate engines of economic growth.
This paper examines taxable sales in the Los Angeles and Miami metropolitan areas to find evidence of the short- and long-run effects of the Rodney King riots and Hurricane Andrew on their respective economies. The comparison of these two events shows that the King riots had a long-term negative effect on Los Angeles' economy while Hurricane Andrew had a short-term positive effect on the Miami economy. The paper also applies the contrasting experiences of Los Angeles and Miami to New Orleans following Hurricane Katrina. In some ways, Katrina is a hybrid of these two events since it combines elements of both a natural disaster and a social disaster. The paper examines how Katrina is similar to each of the previous incidents and how these similarities might affect the recovery of New Orleans following the storm.
Major League Baseball has rewarded cities that build new baseball stadiums with the chance to host the All-Star Game. Although the league asserts a significant boost to metropolitan economies due to the game, are these economic impact estimates published by the league credible? In two separate economic impact models, the authors find that All-Star Games since 1973 are actually associated with worse than expected economic performance in host cities.
An empirical examination of the determinants of real per capita income in cities with professional sports teams from 1969 to 1997 shows that postseason appearances are not associated with any change in the level of real per capita income in these cities. However, in the city that is home to the winning team from the Super Bowl, real per capita personal income is found to be higher by about $140, perhaps reflecting a link between winning the Super Bowl and the productivity of workers in cities. Overall, economic benefits flowing from future postseason appearances cannot justify public expenditures on professional sports franchises or facilities.
The National Basketball Association (NBA) lockout of 1998–1999 resulted in the cancellation of a significant number of games. According to the claims made by proponents of sports-driven economic growth, cities with NBA franchises should experience significant negative economic losses from this work stoppage because of the lost spending in and around basketball arenas during this event. Although it will be several years before adequate data exist for a careful ex post evaluation of the effects of the lockout, an examination of the impact of past work stoppages in professional football and basketball can shed some light on the potential impact of the NBA lockout as well as the viability of professional sports as engines of economic growth in cities. The parameter estimates from a reduced-form empirical model of the determination of real per capita income in 37 Standard Metropolitan Statistical Areas (SMSAs) over the period 1969–1996 suggest that prior work stoppages in professional football and baseball had no impact on the economies of cities with franchises. Further, the departure of professional basketball from cities had no impact on their economies in the following years. These results refute the idea that attracting professional sports franchises represents a viable economic development strategy.
Over the past 15 years, new stadiums in the National Football League have been built at an unprecedented rate, and most new facilities have utilized significant public funds. This paper looks at whether the methods used to finance these new facilities honored public finance principles regarding equity and efficiency. While some common sources of public funds for sports infrastructure such as ticket taxes and personal seat licenses are both equitable and efficient, an examination of the 20 NFL stadiums constructed or refurbished since 1992 reveals a trend towards an increased reliance on taxation of visitors through hotel and rental car taxes. Although taxation of persons living outside one's own metropolitan area is appealing, this paper suggests that these sources of funding are neither equitable nor efficient.
Using a panel of international student test scores 1980 – 2000 (PISA and TIMSS), panel fixed effects estimates suggest that government spending decentralization is conducive to student performance. The effect does not appear to be mediated through levels of educational spending.
The sports industry presents many unusual and interesting opportunities for the application of economic theory and econometrics. In 15 professional papers, this book addresses current economic issues in the industry, including the problem of competitive balance, the location of professional sports teams and their impact on local communities, managerial decision making, and issues related to labor markets. Extending the previous research in sports economics, the papers reflect the most recent applications of economic theory in this area. The book will be a valuable resource for professional economists working on sports economics topics.
In two opening chapters on competitive balance, the contributors develop a model for college football and examine the impact of balance on attendance in major league baseball. In a section on the location of professional sports teams, the chapters then develop a model to predict the location of expansion teams, make econometric estimates of the impact of Super Bowls on the host city, and analyze the ownership of stadiums and arenas. Managerial decision making is discussed in chapters that examine alternative econometric models of production in baseball, use a production function model to analyze technological change in Major League Baseball, examine the management of team streaks, consider the competitive balance between American and National Leagues, analyze the efficiency of player trades in the National Basketball Association, and estimate the impact of participation in inter-collegiate sports on academic performance. In the final section on labor markets, the contributors estimate the impact of owner collusion on baseball players' salaries, consider the impact of the new collective bargaining agreement in Major League Baseball, analyze the impact of being a union representative, and examine the impact of the National Football League's salary cap on player's salaries.
The National Basketball Association (NBA) lockout of 1998‐1999 resulted in the cancellation of a significant number of games. According to the claims made by proponents of sports‐driven economic growth, cities with NBA franchises should experience significant negative economic losses from this work stoppage because of the lost spending in and around basketball arenas during this event. Although it will be several years before adequate data exist for a careful ex post evaluation of the effects of the lockout, an examination of the impact of past work stoppages in professional football and basketball can shed some light on the potential impact of the NBA lockout as well as the viability of professional sports as engines of economic growth in cities. The parameter estimates from a reduced‐form empirical model of the determination of real per capita income in 37 Standard Metropolitan Statistical Areas (SMSAs) over the period 1969‐1996 suggest that prior work stoppages in professional football and baseball had no impact on the economies of cities with franchises. Further, the departure of professional basketball from cities had no impact on their economies in the following years. These results refute the idea that attracting professional sports franchises represents a viable economic development strategy.
Bringing Analytic Power to the Internet. Sharing and Displaying Information on the Web. MATLAB and Simulink Design Guidelines. Library Functions for Business Economics. Economic and Fiscal Impact Models. Applications for Finance, Manufacturing, Public Policy and other fields. Fuzzy Logic Business Applications. Modeling Retail Sales. Applications for Public Policy. Graphics.
Using the seven weeks of canceled baseball games caused by the 1994 strike as a natural experiment, the author analyzes the degree to which the absence of baseball affected retail trade and hotel room sales in the 24 U.S. cities hosting baseball franchises and in 4 control cites. The most important finding is that the strike had little, if any, economic impact on host cities. Retail trade appeared to be almost completely unaffected by the strike, and the declines in hotel room sales in 10 baseball cities were not consistent with decreases expected by changes associated with the strike.
Cities throughout the United States are facing an unprecedented number of threats from the professional sport teams they host to build new playing facilities or lose the franchise. The recent moves of NFL teams from Los Angeles, Cleveland, and Houston to St. Louis, Oakland, Baltimore, and Nashville, respectively, have given currency to these threats. To attract or retain a team, cities are offering staggering financial support and rationalize their largesse on economic grounds. Do professional sports increase income and create jobs in amounts that justify the behavior of cities? The evidence detailed in this paper fails to support such a rationale. The primary beneficiaries of subsidies are the owners and players, not the taxpaying public.
Many policy analysts have cautioned against public spending for professional and amateur sports. Within the last year, numerous cities have received demands from major and minor league teams for investments. These investments by the public sector can involve hundreds of millions of dollars and are usually defended by the economic impact of the facilities or teams and the economic development and revitalization which will follow. Indianapolis formulated an economic development strategy which relied substantially on sports. In addition, its development policies did not involve one team or facility, but a series of investments. As a result, the policies followed in Indianapolis afford an opportunity to measure the ability of sport facilities to encourage other investments and enhance economic development. The results reported here indicate that a sports strategy, even one as pronounced and as articulated as that of Indianapolis, is likely to have an inconsequential impact on development and economic growth.
This paper investigates the relationship between professional sports franchises and venues and real per capita personal income in 37 standard metropolitan statistical areas in the United States over the period 1969 to 1994. Our empirical framework accounts for the entry and departure of professional football, basketball, and baseball franchises; the construction of arenas and stadia; and other sports related factors over this time period. In contrast to other existing studies, we find evidence that some professional sports franchises reduce the level of per capita personal income in metropolitan areas and have no effect on the growth in per capita income, casting doubt on the ability of a new sports franchise or facility to spur economic growth. We also find evidence that results obtained from estimating reduced-form relationships, a common practice in the literature, are not robust to alternative reduced-form specifications. © 1999 by the Association for Public Policy Analysis and Management.
Public subsidies for sports stadiums and arenas are often justified as a means to boost the local economy. The argument relies on historical local economic impact multipliers that misrepresent the effect of consumer expenditures on professional sports. Sports expenditures are subject to extraordinary consumer substitution away from other local expenditures, and they suffer unusually large first round leakages from the local economy because, inter alia, players export their earnings to the locale of their permanent residence. This note illustrates the extent of such leakages using information about the permanent residence of players in the National Basketball Association. While 93% of average employees live in the area where they work, only 29% of NBA players do the same. The illustration shows that a standard local economic impact multiplier exaggerates the stimulative effect of sports expenditures by over 400%.
This paper explores the impact of professional sports teams and stadiums on employment and earnings in specific sectors in US cities. Previous research focused on aggregate measures of income or employment. We find that professional sports have a small positive effect on earnings per employee in one sector, amusements and recreation, and an offsetting decrease in both earnings and employment in other sectors, supporting the idea that consumer spending on professional sports and spending in other sectors are substitutes. This helps to explain the negative total economic impact of sports found in other studies.
Baade R. A. and Matheson V. A. (2004) The quest for the cup: assessing the economic impact of the World Cup, Reg. Studies 38, 343-354. Hosting the World Cup, the world's second largest sporting event, is a potentially expensive affair. The co-hosts of the 2002 games, Japan and South Korea, spent a combined US5·5 to 4 billion gain touted by event boosters. Potential hosts should consider with care whether the award of the World Cup is an honour or a burden.
Using a panel of international student test scores 1980 – 2000 (PISA and TIMSS), panel fixed effects estimates suggest that government spending decentralization is conducive to student performance. The effect does not appear to be mediated through levels of educational spending.
This study adds to our knowledge of the effects of mega-events like Super Bowls and Major League Baseball All-Star games by looking specifically at a long time-series of monthly sales tax revenues to assess the impact of these events on the host city’s revenue. The analysis indicates that sales tax revenues in Houston may be statistically significantly higher as a result of the Super Bowl by as much as 1 million in extra sales tax revenues. Interestingly, there is no consistent evidence that these events raise the level of taxable sales activity, in total or in the retail or services sectors.
Since the 1950s, taxpayers have been the primary investors in stadia built for the use of privately-owned professional sports teams. Team owners have argued that sports facilities boost local economic activity; however, economic reasoning and empirical evidence suggest the opposite. Public support for stadia is also driven by demand for community image, and owners of sports teams supply a scarce input into image enhancement--participation in the major league--for which they have been able to extract monopoly rents from dispersed taxpayers. We suggest reforms to dissipate the monopoly sports leagues exercise when negotiating with host communities for their teams.
St. Louis Ready to Raise NCAA Flag if Atlanta Can't.
- Anderson Tom
Economics of college sports
- Robert A. Baade
- Victor A. Matheson
Key amendments: Council member Nick Licata challenges Sonics subsidy
- Feit Josh
Home‐Court Edge: Final Four Promises to be Economic Slam Dunk.
- Mensheha M.
In Money Terms, the Subway Series Strikes Out.
- Ackman Dan
Transatlantic sport: The comparative economics of North American and European sports
- Robert A. Baade
- Victor A. Matheson
High‐Stake Courtship.
- Houck J.
The economic impact on the state of Georgia of hosting the 1996 Summer Olympic games
- Jeffrey M. Humphreys
- Michael K. Plummer
Super Bowl XXXIII generates $396 million for South Florida
- Football League National
Sports, jobs, and taxes: The economic impact of sports teams and stadiums
- John F. Zipp
New Ballpark Press Briefing
- Selig Hud Johnharrington Andjimhealey
Final Four's Financial Impact Hard to Gauge.
- Knight Ridder News Service
Why MLB Why Oregon Why Now
- Oregonbaseball Campaign
Mega-events: Is the Texas-Baylor game to Waco what the Super Bowl is to Houston?International Association of Sports Economists Working Paper No
- A Coates Dennis
- Depken
S. Korean Tourism Sector in Blues Despite World Cup
- Golovnina Maria
The economic impact of the New Orleans Saints
- Ryan Timothy