The Economic Return to Stadia and Major Sporting Events A month on the lips, a lifetime on the hips?: The Economic Return to Stadia and Major Sporting Events A month on the lips, a lifetime on the hips? Regional Studies Association “The Regeneration Game” 14th December 2005, Goonerville potential Dr Calvin Jones, Welsh Economy Research Unit, Cardiff Business School or


In this Presentation: In this Presentation How do we think stadia and events affect development prospects? Who pays? (How) does a sport-development strategy tie to wider economic development policy? Do events and infrastructure impact upon economic outcomes? Do we have the information we need to evaluate events properly? And if not, why not?


Stadia, events and the economy: Stadia, events and the economy Relatively recent link – e.g. post 1984 Olympics & Mayor Tom Bradley; Visitation and spending for events Re-visits for tourism Media coverage Property values Allied facilities (conference centres, hotels, retail etc.) Infrastructure legacy (transport, facilities etc.) The best case: e.g. Barcelona ‘92 Urban renewal & legacies; competitive advantage; cultural renewal (cf. Cardiff!) Also a “second-tier” city which gained from exposure


Funding for Development & Events: Funding for Development & Events Typically involves some public subsidy (in both USA and Europe) Very little consideration of opportunity costs The law of unintended consequences: Tax on the poor (through Lottery funds) Permanent urban change for often temporary use? First Law of Olympic Cost: think of a number and double it. …and the second. Its your problem…


Assessing the Benefits for Economic Development : Assessing the Benefits for Economic Development Impacts of Events and Stadia Visitation Spending Increased tourism Business investment Media coverage Physical infrastructure Associated retail/services What “we” think matters in Economic Development Innovation The ‘knowledge economy’ High value employment Virtual infrastructure Skills Partnerships Learning


Not much of a Venn Diagram! : Not much of a Venn Diagram! Impacts of Events and Stadia Visitation Spending Increased tourism Business investment Media coverage Physical infrastructure Associated retail/services What “we” think matters in Economic Development Innovation The ‘knowledge economy’ High value employment Virtual infrastructure Skills Partnerships Learning ?


Economic Impact in the Longer Term: The Evidence: Economic Impact in the Longer Term: The Evidence No academic study has found any evidence of a beneficial impact on medium or long term economic growth or employment generation as a consequence of stadium construction or hosting of major event. (please feel free to tell me different!) Why??? Baade,1995, 2004; Rosentraub and Swindell, 1991; Spilling, 1998


Economic Impact in the Longer Term: The Evidence: Economic Impact in the Longer Term: The Evidence Methodologically; Typically small/regional/urban areas where growth is difficult to measure There is little conceptual clarity on the links we are looking for (e.g. from media coverage->investment) Sport is economically tiny compared to even city (let alone regional or national economies) Politically; Who’s really interested in proving/disproving the benefits from sport and events? …and has the money to do owt about it? Or maybe… In bidding for a major event, cities are entering a monopoly market as consumers. In monopoly markets, its not the consumers that take the economic rent…


Conclusion: Maximising the Benefit?: Conclusion: Maximising the Benefit? Cost, power structures and the role of government Supply chains & local sourcing Capacity building in local communities The role, use & suitability of legacy/developed infrastructure Governance: No such thing as bad publicity? A transparent and holistic ex ante and ex post evaluation structure that links to wider economic goals/policies Economic benefits will not come as a matter of course. They must be earned.