June 01, 2010

Stanley Cup economic impact in Philly: Not so much

Sunday's Philadelphia Inquirer featured a rare article that debunks the usual wild claims of economic windfalls from pro sports playoff games: Despite the Flyers playing in the Stanley Cup Finals, notes the paper, neither the team nor the city will reap all that much money as a result.

In particular, notes economist Andrew Zimbalist, the claims by Flyers president Peter Luukko that the city will gain $200,000 in tax revenue per game are likely inflated, since "pretty much all the people who are going to be at the arena will be from Greater Philadelphia, and they spend money at the arena instead of spending it somewhere else in the Philadelphia economy."

Of course, that's not exactly what Zimbalist said in his economic impact analysis paid for by then-New Jersey Nets owner Bruce Ratner, in which he assumed substantial increased tax benefits to New York from moving the Nets to Brooklyn. But like they say in academia, better late than never.