Economic Impact Studies on Sports Events: a tool for decision-making

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Presentation transcript:

Economic Impact Studies on Sports Events: a tool for decision-making Angel Barajas Ekaterinburg, 17th November 2017 Economic Impact Studies on Sports Events: a tool for decision-making

Agenda General idea Basic ideas on Impact Analysis Relevant elements in sport events Financial figures about Mega Events (OG) Economic impact of MotoGP in Valencia Economic impact of Marathon in Valencia 07.05.2019

General idea Sport events can have positive or negative impact. Decisions about organizing an event should consider: the features of the event and the features of the host city/region/country. Critical points: Investments Canon Limiting factors Intangibles mater but how to measure them? Ex-post studies 07.05.2019

General idea Positive NPV – is this the reason to organize an event? What if any other alternative investment provide a higher NPV? Tax payers could decide (referenda) Low level of taxes … State own companies… 07.05.2019

Economy under observation Impact Analyses Basic requirement: Measurement of the total change of the (city) structure due to the staging of an event. What is … entering | new leaving | disappearing rejected | not coming (ex)changed completeness/ preciseness Pecuniary changes Emotions (economic) Infrastructure nominal monetary change Economy under observation resources entering resources not coming (crowding-out) re-distribution resources leaving (crowding out) negative ambivalent positive 07.05.2019

Relevant element in sports events Sport elements: Direct influence on tourism. Encourage the attendance of spectators and participants non-residents/foreign. 07.05.2019

Relevant element in sports events Tourism elements: Increase economic impact. Increase tourist attraction. Long-terms effects 07.05.2019

Financial relevance of Olympics 07.05.2019

Financial relevance of Olympics 07.05.2019

Financial relevance of Olympics 07.05.2019

Financial relevance of Olympics 07.05.2019

Economic impact from attendees to World Championship MotoGP Economic Impact of MotoGP in Valencia Distribution of spectators' expenses Total Spending (€) Average Spending (€) Tickets 5,106,022.37 76.20 Accommodation 3,445,304.41 104.59 Food & Beverages 3,277,890.15 45.12 Transport by road 1,807,713.09 30.82 Transport by train 36,325.74 23.00 Transport by air 1,960,687.32 395.00 Merchandising 1,946,021.65 40.30 Leisure 1,416,929.39 62.80 Other expenses 606,933.13 46.38 MotoGP Grand Prix generate an increase of the GDP of some €27 mill. 0.24% of tourism in Valencia (80.000 visitors) Source: Martí-Selva & Puertas-Medina (2012) Economic impact from attendees to World Championship MotoGP (thousands €) Direct Indirect Inducted Total Wages 7,438 278 3,191 10,907 Companies' profit 8,317 391 7,383 16,090 Taxes 18 16 221 256 GDP 15,694 685 10,697 27,077 Employments (persons) 421 13 142 575 07.05.2019

Economic Impact of Valencia Marathon Valencia Marathon generate an impact of 6.5 million €, 140 employments and a ROI of 3,2 (7,049 participants). Source: Instituto Valenciano de Investigaciones Economicas, Maudos (2012) National visitor Foreign visitor Average daily expenses 94.8 111.7 Number of visitors 4,081 2,248 Size of the group (persons) 2.3 3.4 Days in the city 2 4.2 Total expenses (€) 2,112,276 3,578,003 Source: Instituto Valenciano de Investigaciones Economicas, Maudos (2012) 07.05.2019

All that glitters is not gold. To Conclude All that glitters is not gold. Economic impact analysis could help to improve the impact. Economic impact analysis should not be used to justify the organization of an event. 07.05.2019

Economic Impact Studies on Sports Events: a tool for decision-making Angel Barajas Ekaterinburg, 17th November 2017 Economic Impact Studies on Sports Events: a tool for decision-making