June 04, 2010
NBA All-Star Game shows zero impact on Texas economy
The first solid numbers are in for the economic impact of February's NBA All-Star Game, and they're a bit less impressive than expected:
Based on the economic score, the dollars spent, let's look at the economic impact of this year's NBA All-Star Game:
It's not $152 million as predicted.
Tax receipts from the State of Texas show the game brought in zero.
The numbers are reflected in tax receipts from five North Texas cities which were predicted to post large hotel, restaurant and alcohol revenue increases as a result of the game.
But instead of that boost, year-to-year revenue comparisons with 2009 — during the depth of the economic downturn — show only small increases or decreases during February, the month of the game. The All-Star contest was early in the month, allowing businesses ample time to report their revenues.
What the heck happened? Well, presumably there was some of the "crowding out" effect observed by economist Phil Porter, where Super Bowls and other mega-sporting events end up driving away as many visitors as they attract, because of booked hotel rooms and traffic fears. Dallas TV station WFAA, which unearthed the tax receipt figures (and is, incidentally, one of the few TV stations in the country that still does investigative reporting), also notes that the initial projection of $152 million in impact cited "a 'literature search on the Internet' as a secondary source, using numbers — presumably from news stories — about earlier All-Star games in Washington, Philadelphia and Atlanta. But news stories frequently quote economic impact estimates from the consultants themselves."
Consultant Michael Casinelli, who prepared the initial economic impact report, defended his methodology, sort of, saying "There is never enough data" to get reliable figures, and blaming "alarmist" university academics for pooh-poohing the benefits of sporting events. Which he's sure must be there, even if you can't see them.
October 07, 2009
Sports bubble watch: NBA, Yankees cut prices
More signs that the crazy inflation in sports ticket prices has found a ceiling:
- The New York Yankees provided more details on their previously announced ticket price cuts for 2010: They'll lower prices for their most expensive seats, the Legends Suite tickets behind home plate, from $2500 a game to a mere $1500, while some tickets in the $500-$1000 range (the ones that the Yanks had trouble selling this season) also will see price drops.
- NBA commissioner David Stern says he expects NBA revenues to drop in the coming season, and says a large part of the reason is price cuts that teams have instituted to keep fannies in the seats. "I would love to get it closer to 2-1/2 percent, but I don't think we're going to because our teams have cut their ticket prices or frozen them, so as a result, even if we have good attendance, we'll be taking in less revenue at the gate, and that's an important component. And that's OK. We're responding to our fans."
August 03, 2009
In case you were wondering what ever happened to that Las Vegas basketball arena that got preliminary approval two years ago, well, it's dead, a victim of the collapsing economy and, quite likely, what was a nebulous financing plan from the start. Just listen to the Las Vegas Sun's report:
At a June 2007 council meeting, an REI Neon official promised the developers would be able to tap the deep financial pockets of "multiple billionaires." At one point, Goodman asked REI Neon official Greg Borgel to confirm that four billionaires "who have contacts with the business community" were lined up to be principal investors.
"I'm not asking for their names," Goodman said, according to a transcript of the meeting.
"Oh good, 'cause I can't tell you," Borgel replied.
They call them "mayors," but another M-word might be more appropriate.
April 05, 2009
Legislators weigh Indy stadium bailout
WRTV News reports, somewhat dramatically, that Lucas Oil Stadium could close if a state bailout deal is not reached for the Indianapolis Capital Improvement Board. The CIB, which operates the Indianapolis Colts' one-season-old stadium along with Conseco Fieldhouse, home to the Indiana Pacers, is facing a $47.4 million operating deficit, after failing to budget properly for $26 million in annual operating costs for Lucas Oil Stadium.
The consequences of financial failure for the CIB remain unclear. CIB President Bob Grand sounded pessimistic, if vague, saying, "If you want me to give you worst-cases, I mean the worst-case scenario is we could be out of money and the facilities would be, arguably, closed."
The bailout plan includes annual $5 million payments from both the Colts and Pacers, which neither team has agreed to as yet (UPDATE: Since the Pacers would be absolved of about $15 million a year in operating costs, this would actually save the team $10 million a year. -ND), as well as tax increases on alcohol, restaurant meals, hotel stays, and sports tickets.
Politicians are not yet on board with the plan, either. NWI reports that Thomas McDermott Jr., Mayor of Hammond in northwest Indiana, is incensed that a similar finance plan for flood protection levees in his district was blocked in December. "It seems to me that it's more important to build football stadiums than it is flood walls," he said on Thursday.