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Games' Impact Might Not Trickle Down
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Published: March 16, 2008
Updated: 03/15/2008 11:56 pm
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TAMPA - Some of the nation's most talented college basketball players will be heading our way in the next few weeks for a series of NCAA tournament contests.
Go ahead and boast about our reputation as a big-league town. Talk up how awesome it is to see the game's biggest stars up close and in person, if you've been able to snag a ticket.
Just be careful about throwing around those economic impact numbers - at least in front of the people who say they know better.
The scheduling of the first and second rounds of the NCAA men's basketball tournament Friday and March 23 and the women's Final Four on April 6 and 8 at the St. Pete Times Forum has local economic development officials and civic boosters crowing.
But the publicity surrounding the events also has renowned economists rolling their eyes at what they consider pie-in-the-sky economic impact figures with little basis in reality.
Rob Higgins, executive director of the Tampa Bay Sports Commission, lights the fire: "Based on previous cities' estimates, we anticipate approximately $40 million in economic impact for these two events combined."
Philip Porter, an economics professor at the University of South Florida, brings the wet blanket: "Every bit of economic literature suggests there's no measurable impact of these things. Where in the world did the guy get that number?"
The debate over the economic impact of big-time sporting events is a fairly new one. It was sparked chiefly within the past 10 years by battles over publicly funded arenas and stadiums. Typically, leagues, team owners and event organizers, who have an incentive to toss out hefty economic impact numbers to justify bids on events, tax dollars for new facilities or other public spending, make a noisy pitch. Opposing civic groups and antitax crusaders have retained scholars to dispute the claims.
When the options are a quick quote or sound bite from a powerful league commissioner or mayor versus the dry testimony or a treatise by an economist, it's not difficult to imagine which claim often gets circulated when it comes to sporting events.
"It's just frustrating," Porter says. "I don't even know how to begin to tell you how frustrating it is."
Where The Cash Registers Ring
Don't try to tell Guy Revelle that the downtown hoops action isn't going to be a gold mine. He says his four clubs and restaurants in Channelside - Stump's Supper Club, Splitsville, Tinatapas and Howl at the Moon - will be the "epicenter for the party" surrounding the NCAA action.
Previous events, such as the Atlantic Coast Conference basketball tournament last spring, lured fans who poured tens of thousands of dollars above and beyond a normal weekend haul into Revelle's businesses.
"I'm totally drinking the Kool-Aid," he says. "I know you have the professors out there saying this or that, but it's true. These sporting events and conventions are huge dollars for us. When we're making money, when we're making sales, it really does filter down."
Sure, bars, restaurants and hotels near any special gathering of people are bound to see bumps in sales. But economists like to study sales tax data for a community as a whole surrounding a special event, and the cash flowing from a single sporting event barely registers in those receipts.
The local sports commission's numbers are largely based on the number of out-of-state visitors expected. Nobody will know which men's teams will be playing in Tampa until tonight's "Selection Sunday" announcements, and the women's competitors will be the last four to make it through the 64-team playoff bracket system April 1. That's a bit of a disadvantage for promotion, but it's one that the commission's Higgins says can be overcome.
"Certainly, it's a quick window to book a trip," he says. But fans of the big NCAA basketball powers "are accustomed to booking on a short time frame. They are very passionate about their schools and supporting them. They've made that commitment to see them through to the end. Any time you're dealing with a major event like this, even with teams finding out late, there is still a very strong following."
About 7,000 tickets for the women's event sold out to the general public in a summer lottery. Schools will get allocations of about 800 tickets apiece, and about 10,000 seats were reserved for the Women's Basketball Coaches Association, corporate sponsors and organizers.
An NCAA spokesman said the men's tournament does not disclose ticket distribution information.
The local commission says the men's games will produce more than 9,000 hotel visitor room nights; the women's, 16,000.
It may be Tampa's gig, but even across the Bay, civic boosters are feeling good about the tournaments.
"There's definitely overflow, and there are some folks that want to stay at a beachfront location," says DT Minich, director of tourism for Pinellas County. "We definitely feel those kinds of advantages."
Minich's group, Visit St. Petersburg/Clearwater, doesn't track bookings related to most Tampa events, and he said there were no specific room blocks set aside for the basketball tournaments.
However, "There's definitely value to the exposure that the destination gains from hosting some of these events, and the press coverage and things like that," Minich says. "I think you have to look at a combination of economic impact and the pure value of hosting the event from a media exposure perspective."
The Problem With The Theory
Even that stance brings a splash of cold water from Andrew Zimbalist, a professor at Smith College in Massachusetts and an expert on the economics of sports.
He contemplates a lull in the action on the basketball court, with the national television broadcast cutting away to a beach scene or a sailboat bobbing in Tampa Bay.
"Can you honestly imagine somebody sitting at home in Maine saying, 'My gosh, look at this! There's a city in the United States where you can go swimming in the ocean in March! I'm going to go there!'
"There's just no evidence that this happens," Zimbalist says.
Porter, Zimbalist and others of their stripe offer consistent rebuttals to optimistic economic impact assessments of sporting events. Typically, boosters estimate the number of visitors, the number of days they are expected to stay and the amount they will spend each day. Their derived number is then subject to a multiplier, intended to reflect re- spending of that money circulating through the local economy.
In a 2008 paper, "Selling the Game: Estimating the Economic Impact of Professional Sports Through Taxable Sales," a trio of economists in the Southern Economic Journal wrote that academic economists "have been quick to point out the failings of such ... studies, as they often rely on poor methodology and also suffer from several theoretical problems."
Those problems include what is known as the substitution effect, or consumers spending money at a sporting event rather than on other goods and services in the local economy; crowding out, the tendency for congestion from out-of-towners to dissuade locals from venturing out; and leakage, with the money being spent in a local economy not winding up in the pockets of residents but, for example, in the pockets of national hotel owners or the accounts of their shareholders.
Economists study air travel, hotel occupancy rates and sales tax collections in considering a big-picture look at big-time sporting events. Consider that the National Football League usually attaches a benefit of $300 million to $400 million to the city that puts on its crown jewel, the Super Bowl.
Porter's conclusion? The impact of the big game on the host city is statistically insignificant, based on taxable sales.
"The bottom line in all of this is that we have a process by which our studies are notorious. Our data is made known to everybody. The methodology is there for everybody to critique," Porter says. "People have tried time and time again to shut this thing down. All they've done is to reinforce that super-events have no economic impact."
No hard feelings, though, the economists say. Go ahead and enjoy the games.
"It's a great party," Porter says of the typical megasporting event he studies. "I'm not saying that we ought not do it. I've never said that about a Super Bowl or anything else. Communities throw parties all the time.
"The part of it that doesn't ring true is that it's in my best interest if they do this for me," he says. "There's nothing in it for me."
Reporter Jerome R. Stockfisch can be reached at (813) 259-8402 or jstockfisch@tampatrib.com.
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Reader Comments
Posted by ( zteam55 ) on March 16, 2008 at 8:40 a.m. ( Suggest removal )
Economists roll their eyes.... How many times in the last year have we heard "experts were surprised" about the economy, job growth or losses, taxes collected, etc. Lower taxes and tax revenues increase and we read economists are surprised!! Just another "expert" searching for a reason to complain about something.
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Posted by ( Tampabob1 ) on March 16, 2008 at 8:56 a.m. ( Suggest removal )
Dittos zteam55. Couldn't yell it louder. Doom and gloom about the economy in an election year!! Who could have seen that coming???
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Posted by ( Tampabob1 ) on March 16, 2008 at 8:59 a.m. ( Suggest removal )
Dittos zteam55! Couldn't yell it louder. Doom and gloom in an a election year to sway voters by the corrupt media!! Who would have seen that one coming????
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Posted by ( Bonsai ) on March 16, 2008 at 10:19 a.m. ( Suggest removal )
Tampabob1 - glad you said that twice. It can't be said enough.
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Posted by ( Fred ) on March 16, 2008 at 10:01 p.m.
(This comment was removed by the site staff.)