With the NCAA basketball tournaments about to kick off, it’s only a matter of time before some reporter somewhere calls me to ask whether they’re really a benefit to local economies in the cities that are chosen to host games. So I’m really glad that Travis Waldron of Think Progress has written an item making clear that the answer is: no, no, a thousand times no.
In their analysis of Final Fours from 1970 to 1999, for instance, professors Victor A. Matheson and Robert A. Baade found that the average economic impact of hosting the NCAA Tournament was actually negative…
Matheson and Baade cite various reasons for the inflated economic estimates. For one, cities estimate the money spent by attendees at the events without accounting for money that goes unspent in that area. NCAA Tournament games surely attract fans to certain locations, but they can also prevent local residents from spending money at the same time, as they seek to avoid the crowd. And the estimates rarely account for the cost of putting on the events, so while a city may gross millions in new economic activity, the net gain is much more often closer to zero.
None of this should be new to anyone — even if you missed Matheson and Baade’s paper when it came out back in 2003, we just went through the exact same thing last summer with the Olympics. Not that this will stop reporters from writing stories in upcoming weeks on all that the NCAA means to its host cities, but at least now when they do, we can say “We told you so.”