The Economic Impact of Major Sports Events: a Review of Ten Events in the Uk
The economic impact of major sports events: a review of ten events in the UK
Chris Gratton, Simon Shibli, and Richard Coleman
Introduction
Over recent years there has been a marked contrast between the discussions around the economic impact of major sports events in North America on the one hand and most of the rest of the world on the other. In the USA the sports strategies of cities in the USA have largely been based on infrastructure (stadium) investment for professional team sports, in particular, American football, baseball, basketball, and ice hockey. Over the last decade cities have offered greater and greater incentives for these professional teams to move from their existing host cities by offering to build a new stadium to house them. The teams sit back and let the host and competing cities bid up the price. They either move to the city offering the best deal or they accept the counter offer invariably put to them by their existing hosts. This normally involves the host city building a brand new stadium to replace the existing one which may only be ten or fifteen years old. The result is that at the end of the 1990s there were thirty major stadium construction projects in progress, around one-third of the total professional sports infrastructure, but over half of all professional teams in the USA have expressed dissatisfaction with their current facilities. Baade (2003) argues that since 1987 approximately 80 per cent of the professional sports facilities in the United States will have been replaced or have undergone major renovation with the new facilities costing more than $19 billion in total, and the public providing $13.6 billion, or 71 per cent, of that amount. The use of taxpayers money to subsidize profit-making professional sports teams is justified on the basis that such investment of public money is a worthwhile investment since it is clearly outweighed by the stream of economic activity that is generated by having a professional sports
Chris Gratton, Simon Shibli, and Richard Coleman
Introduction
Over recent years there has been a marked contrast between the discussions around the economic impact of major sports events in North America on the one hand and most of the rest of the world on the other. In the USA the sports strategies of cities in the USA have largely been based on infrastructure (stadium) investment for professional team sports, in particular, American football, baseball, basketball, and ice hockey. Over the last decade cities have offered greater and greater incentives for these professional teams to move from their existing host cities by offering to build a new stadium to house them. The teams sit back and let the host and competing cities bid up the price. They either move to the city offering the best deal or they accept the counter offer invariably put to them by their existing hosts. This normally involves the host city building a brand new stadium to replace the existing one which may only be ten or fifteen years old. The result is that at the end of the 1990s there were thirty major stadium construction projects in progress, around one-third of the total professional sports infrastructure, but over half of all professional teams in the USA have expressed dissatisfaction with their current facilities. Baade (2003) argues that since 1987 approximately 80 per cent of the professional sports facilities in the United States will have been replaced or have undergone major renovation with the new facilities costing more than $19 billion in total, and the public providing $13.6 billion, or 71 per cent, of that amount. The use of taxpayers money to subsidize profit-making professional sports teams is justified on the basis that such investment of public money is a worthwhile investment since it is clearly outweighed by the stream of economic activity that is generated by having a professional sports
References: Baade, R.A. (1996) ‘Professional sports as catalysts for economic development’, Journal of Urban Affairs 18 (1): 1–17. Baade, R.A. (2003) ‘Evaluating subsidies for professional sports in the United States and Europe: A public sector primer’, Oxford Review of Economic Policy 19 (4): 585–597. Bianchini, F. & Schengel, H. (1991) ‘Re-imagining the city’, in J. Comer and S. Harvey (eds) Enterprise and Heritage: Crosscurrents of National Culture. London: Routledge, 214–234. Bramwell, B. (1995) ‘Event tourism in Sheffield: A sustainable approach to urban development?’ Unpublished paper. Sheffield: Sheffield Hallam University, Centre for Tourism. Burns, J.P.A., Hatch, J.H. & Mules, F.J. (eds) (1986) The Adelaide Grand Prix: The Impact of a Special Event. Adelaide: The Centre for South Australian Economic Studies. Coates, D. & Humphreys, B. (1999) ‘The growth of sports franchises, stadiums and arenas’, Journal of Policy Analysis 18 (4): 601–624. Crompton, J.L. (1995) ‘Economic impact analysis of sports facilities and events: eleven sources of misapplication’, Journal of Sport Management 9 (1): 14–35. Crompton, J.L. (2001) ‘Public subsidies to professional team sport facilities in the USA’, in C. Gratton and I. Henry (eds) Sport in the City: The Role of Sport in Economic and Social Regeneration. London: Routledge, 15–34. Getz, D. (1991) Festivals, Special Events, and Tourism. New York: Van Nostrand Reinhold. Hall, C.M. (1992) Hallmark Tourist Events: Impacts, Management and Planning. London: Belhaven Press. Kasimati, E. (2003) ‘Economic aspects and the Summer Olympics: a review of related research’, International Journal of Tourism Research 5: 433–444. Loftman, P. & Spirou, C. (1996) ‘Sports stadiums and urban regeneration: the British and United States Experience’. Paper to the conference Tourism and Culture: Towards the 21st Century. Durham, September 1996. Mules, T. & Faulkner, B. (1996) ‘An economic perspective on major events’, Tourism Economics 12 (2): pp 107–117. Noll, R. & Zimbalist, A. (eds) (1997) Sports, Jobs & Taxes. Washington, DC: The Brookings Institution. Preuss, H. (2004) The Economics of Staging the Olympics: A Comparison of the Games 1972–2008. Edward Elgar: Cheltenham UK. Ritchie, J.R.B. (1984) ‘Assessing the impact of hallmark event: conceptual and research issues’, Journal of Travel Research 23 (1): 2–11. Ritchie, J.R.B. & Aitken, C.E. (1984) ‘Assessing the impacts of the 1988 Olympic Winter Games: the research program and initial results’, Journal of Travel Research 22 (3): 17–25. Ritchie, J.R.B. & Aitken, C.E. (1985) ‘OLYMPULSE II – evolving resident attitudes towards the 1988 Olympics’, Journal of Travel Research 23 (3): 28–33. Ritchie, J.R.B. & Lyons, M.M. (1987) ‘OLYMPULSE III/IV: a mid term report on resident attitudes concerning the 1988 Olympic Winter Games’, Journal of Travel Research 26 (1): 18–26. Ritchie, J.R.B. & Lyons, M.M. (1990) ‘OLYMPULSE VI: a post-event assessment of resident reaction to the XV Olympic Winter Games’, Journal of Travel Research 28 (3): 14–23. Ritchie, J.R.B. & Smith, B.H. (1991) ‘The impact of a mega event on host region awareness: a longitudinal study’, Journal of Travel Research 30 (1): 3–10. Roche, M. (1992) ‘Mega-event planning and citizenship: problems of rationality and democracy in Sheffield’s Universiade 1991’, Vrijetijd en Samenleving 10 (4): 47–67. Roche, M. (1994) ‘Mega-events and urban policy’, Annals of Tourism Research 21 (1): 1–19. 58 © The Editorial Board of the Sociological Review 2006