NFL draft generated bajillion dollars for Philly economy, say people who would say that

Oh, look, it’s an article about how much economic impact resulted from a sports-related event, this time the 2017 NFL draft in Philadelphia. If you were guessing the answer is “gobs and gobs” and that the study was conducted at the behest of the local tourism bureau, you are a winner:

A record 250,000 fans attended the three-day event held along the Ben Franklin Parkway, with $56.1 million spent at the event, resulting in an estimated $94.9 million in economic impact for the city. Initial projections and estimations put the impact around $80 million. The event also created 30,000 jobs during and leading up to the event.

Let’s do a sniff test on this. A quarter-million fans spending $56.1 million over three days is $224.40 per person, which sounds a bit high, but sure, maybe? And spinning that out into $94.9 million in economic impact would then be reasonable, since money gets re-spent through the local economy as sports bar waiters go home and buy groceries with their tip money, etc. As for 30,000 jobs, it sounds like that counts temporary positions, so it could well be true, if not necessarily that impressive.

Except: There’s our old friendly bugaboo, the substitution effect. How many of those 250,000 fans were locals who would have been spending money in Philly regardless? And how many out-of-towners displaced other out-of-towners who steered clear of the city because it was crawling with NFL draft fans? I can’t find the actual study — the NFL didn’t bother to link to it in its press release — but there’s no indication that the study’s authors accounted for any of this. And in fact, not only economists but hotel operators have thrown cold water on these estimates, with the director of the Greater Philadelphia Hotel Association comparing the draft to “a large medical convention that doesn’t quite sell out the city, but does well.”

None of which means that the NFL draft has zero economic impact, or isn’t worth hosting (depending on the price for your city, obviously). But news organizations — I’m looking at you, CSNPhilly, assuming you consider yourself a news organization — do have at least some responsibility to note the caveats that come with tourism-board-issued economic claims. A nice big “RATING: UNCONFIRMED” would do nicely.


17 comments on “NFL draft generated bajillion dollars for Philly economy, say people who would say that

  1. This obviously doesn’t mean a ton coming from someone who frequents this site, but I actually did postpone a hybrid work/family trip to Philly because it was going to conflict with this and I wanted to avoid it, and I have not rescheduled it yet. Real life substitution.

  2. I agree $224 is likely a stretch for locals–who I suspect were the lion’s share of attendees–but you know the out-of-towners were way over that amount with hotel bills. But where on earth does the 30,000 jobs CREATED figure come from? I find it hard to imagine there were 30,000 people working the draft TOTAL and certainly the vast majority of the people who were working were doing so as part of jobs they already had. “Created” means the people would have been sitting idle if not for the draft.

    • It’s the fine print…. 30,000 jobs “leading up to the event.”

      Using Economic Impact Study Logic, the event couldn’t have happened without the venue, therefore the architects, the construction workers, the city inspectors, the food truck vendors and wait staff serving the construction workers, the workers who supplied the food truck vendors and wait staff serving the construction workers, and anyone else who played any role — no matter how ancillary — in the construction of the venue, is another “job created.”

      • Yeah, if you click through on the “economists have thrown cold water” link, you’ll find Allen Sanderson (he of the famed helicopter quote) saying of this methodology, “If some NFL executive gets in a cab, that’s a job.”

    • I actually work in this world in an ancillary way, and to give you a conception of how shoddy the methodology is for this sort of thing you can take the following real life example:

      I am trying to understand what I should report for jobs created” in a situation where there are say 200 existing staff who all already had jobs, but conceivably some of them might have lost their jobs if this particular project fell through (or likely we just would ave done a different project). Now not all these people are full time, some are consultants or whatever, and lets say during the project there is some amount of turnover (say 5% a year). Maybe we hire an extra 10 people too?

      So when asked how many jobs the project “created”, my gut is to go with 10, or even a portion of the 10 since those people don’t solely work on this. The instructions do not make it clear if it is part-time, or full-time, or whether created includes “retained”. They do provide specific guidance don’t get me wrong, but it is partial and inconsistent in places.

      So I try to put down “10”, the simple answer. No no no no no, this project created 210 jobs I am told. Doesn’t matter if this is only 5% of total business, doesn’t matter that not everyone is full time (despite it referencing FTE in places). And it quickly becomes clear the the university economic analysis group, and the government agencies who are collecting and monitoring this data give zero fucks about accuracy, and of course the private sector just does whatever leads to the biggest checks.

      I would treat anyone involved in economic development, even at a university with extreme skepticism/cynicism. It is one of the worst cases of psuedo-science masquerading as actual rigor out there.

      • Exactly.

        Suggesting 30,000 jobs have been created by a three day event (no matter how long it took to set up/tear down) is ludicrous.

        If they really wanted to be accurate about this, they could ask the mob/demob team to submit their timesheet summaries from the actual work performed, and ask the convention centre (or whatever) to do the same.

        Then you are talking about the actual economic impact, not projections based on fluff like all airline employees working in Philadelphia (and some working in flight origin cities as well) on the three days leading up to the event being “directly” employed because of it.

  3. The draft caused a month long traffic and parking headache for anyone who lived or had to move through the area. And then the NFL put up a fake Art Museum in front of the real Museum! They could have done that out of everyone’s way in South Philly. And our jock sniffing politicians will do it again if the CTE league comes calling again.

        • Wow! I thought I’d seen it all with Obama’s 2008 Denver convention speech. Hard to know which came off as more pretentious, although a draft of college football players is probably a little less important than the nomination of a presidential candidate (unless we’re talking the Peace and Freedom Party).

  4. Interesting calculations… so by the NFL’s own metric, then, holding the NFL draft every year for 20 years would result in a bigger economic impact for the host city than building the local NFL team a new stadium would.

    Good to know.

  5. If $56m was allegedly brought “into” the local economy by hosting this event, then $56m is the total economic impact, less any adjustments for travellers who avoided Philadelphia because of this event (which, believe me, happens no matter what the event is) and any of the economic impact to Philadelphia which can be proven is redistributed right back out again (who is to say the waiters won’t use any extra money they make as a downpayment on a new car made in Japan or Germany, electronics made in China, or simply to pay down debt?)

    Though serving staff and others may earn extra wages or tips etc during this period, these do not create a multiplication effect. This is an economist’s fallacy… If 100 of us sit in an arena and pass one dollar around between us 99 times before spending it, that is still just one dollar of economic impact.

    Once the waiter spends the dollar s/he no longer has it and has lost the economic impact of same (it is passed on to whomever they purchased goods or services from).

    • No John you need to count every dollar 8 times. That way you can learn that advertising is 1/5th of the economy, and medicine 1/3, and the financial sector 1/4 and entertainment 1/5, and retail 1/3 and so on.

      There are 8 economies or more out there, just waiting to be claimed!

  6. Don’t forget that the NFL requests that they – and their key Sponsors – ask for breaks from the city for big events. Like reduced hotel fees, lower taxes, some provided-by-the-city security and refuse services to name a few.

    So the economic impact isn’t quite accurate given all of these factors.

  7. I’m not sure what’s worse: Overstating the economic impact of 250,000 NFL fans showing up to watch the draft, or the fact that a whopping 250,000 people actually showed up in person to watch it, at all!

    I mean, it’s “the draft,” people. How many of those players are going to pan out? How many will wash out of the league within a couple years? What, really, is the point of fans being there in-person? Come on.

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