STrib: NCAA Final Four economic infusion set at $143 million

[BleedGopher]

per Rochelle:

The wrap-up analysis of the economic impact of the NCAA’s Final Four at U.S. Bank Stadium came in Tuesday at $143 million, about what was predicted before the event.

That’s the boost to the Minneapolis economy as determined by Pennsylvania-based Rockport Analytics. The group also did the same calculations for the 2018 Super Bowl in Minneapolis, putting that number at $370 million.

The Final Four’s local organizing committee is closing up shop this week, about 4½ years after the NCAA awarded the tournament to Minneapolis. At the time, organizers estimated that the economic impact could run from $70 million to $200 million.

While such analyses have come to be expected before and after such massive events, they are considered suspect by many economists and detractors. Both the Super Bowl and the Final Four occurred at U.S. Bank Stadium, which was built for $1.1 billion at a cost to taxpayers of almost $500 million.

The tally on tax revenue brought in during the Final Four was $23 million, identical to what Rockport had predicted.

http://www.startribune.com/ncaa-final-four-economic-infusion-set-at-143-million/511794692/

Go Gophers!!

 

[GopherJack]

But we still have electronic pull tabs paying off the stadium debt. Day-by-day, dollar-by-dollar........

 

[short ornery norwegian]

The Strib used to have a writer named Jay Weiner, who was very much opposed to public financing of stadiums. I believe he wrote a book on the subject, which took a dim view of the Twins' efforts to get a new stadium.

Anyway, whenever anyone wrote an article about the economic impact of a sporting event, Weiner would always respond by quoting some economist from somewhere who maintained that sporting events generated almost no economic impact. according to this guy, people would have spent the same amount of money whether there was a sporting event or not.

 

[watertown 1987 guy n]

Load of B.S. How much of the hotels, restaurants, memorabilia items, car rental, etc. sales go to individuals and companies w/ headquarters in Minnesota? The biggest beneficiaries were likely Lyft and Uber drivers and a few local event planners & services and security services - and good for them! But I suspect a good chunk of that $23 million in extra sales tax collected was easily offset by time lost by local citizens as they tried to navigate traffic. Just call it what it is - a giant puffery for the wealthy that participate in the event and the media for its "value" of showcasing our Minnesota. We Minnesotans are way more awesome than other cities that have put these events on.

 

[howeda7]

Load of B.S. How much of the hotels, restaurants, memorabilia items, car rental, etc. sales go to individuals and companies w/ headquarters in Minnesota? The biggest beneficiaries were likely Lyft and Uber drivers and a few local event planners & services and security services - and good for them! But I suspect a good chunk of that $23 million in extra sales tax collected was easily offset by time lost by local citizens as they tried to navigate traffic. Just call it what it is - a giant puffery for the wealthy that participate in the event and the media for its "value" of showcasing our Minnesota. We Minnesotans are way more awesome than other cities that have put these events on.

Why does that matter? You pay income taxes based on where the money was earned, not where your headquarters is located.

What is the cost to the state of people being stuck in traffic? Is the state going to compensate them or something?

It's fine to not want public funding of stadiums. But arguing that having events like the Final Four and Super Bowl don't bring $$ to the local economy is silly. They do. You can debate the exact amount, but it's significant either way.

 

[bc2211]

Why does that matter? You pay income taxes based on where the money was earned, not where your headquarters is located.

What is the cost to the state of people being stuck in traffic? Is the state going to compensate them or something?

It's fine to not want public funding of stadiums. But arguing that having events like the Final Four and Super Bowl don't bring $$ to the local economy is silly. They do. You can debate the exact amount, but it's significant either way.

I think that the argument was that big corps earning revenue won’t keep that revenue in Minnesota, so the 23 million tax revenue is the only guaranteed benefit. Yet, lost productivity to those workers competing in traffic, loss of business from those who would have consumed in the area but chose to avoid the commute, harm to infrastructure, etc. would offset that number even further. Not sure I’m sold on the magnitude of loss from a couple days of traffic, but economic burden of gridlock is real.

https://www.citylab.com/transportation/2018/02/traffics-mind-boggling-economic-toll/552488/

As an aside, I did not read where the 143 million came from, and it could certainly account for all these concerns.


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[Gophers_4life]

a giant puffery for the wealthy that participate in the event and the media for its "value" of showcasing our Minnesota

It helped sell getting the stadium built in the first place. So, you are incorrect here.

We have one of the best stadiums in the country, because we could sell getting the Super Bowl, Final Four, and other events to come to not just the middle of the country, but the cold, nothern middle of the country. People who would never come here in their lives otherwise.


It's amazing to me how many people just flat out don't "get it", like you.

 

[Gophers_4life]

I think that the argument was that big corps earning revenue won’t keep that revenue in Minnesota

Some sure, but that's always true. Also always true: you have to pay your workers. Payroll is the biggest expense of any company. All the workers at those hotels, restaurants, drivers, etc. took home a big part of that $143 as their paychecks, and at least a good portion of that was spent here. Even if those workers were shipped in from out of state. People gotta eat and have somewhere to stay. That's money spent here.


All money is just flowing around all over the place, anyway. It's fine to make this and that point, but at some level of abstraction .... it's all just moot. Money is always flowing around. It's never just sitting in a mattress in someone's backyard.

 

[watertown 1987 guy n]

We have one of the best stadiums in the country, because we could sell getting the Super Bowl, Final Four, and other events to come to not just the middle of the country, but the cold, nothern middle of the country. People who would never come here in their lives otherwise.

Is that the goal, just to get people to come here? If so - The MOA was primarily financed w/o public investment and has been a draw of people for 20 some years. I’d rather we put our energy into better roads, better services and k-12 education. Those things actually are factors used for companies in their decision on where to locate and bring jobs - can’t think of one company that would make a decision on location based on a stadium.

As for using it (bring big events) as a selling point to build the stadium is crux of my argument, a minimal amount of the funds from these events actually stays in the community. Did building the stadium temporarily add jobs yes, but the long term financial impact is pretty small vs $1 billion that could have been invested in infrastructure. For 300+ days out of the year the stadium has zero value to the local economy. Does it add to quality of life for some, absolutely. Would many of us feel less proud of our city if the Vikings had left, and would we have felt inferior to WI with their Packers, probably. Are those factored into the $143 impact, i don’t know. I “get it”, just dislike using public funds to further enrich the wealthy and when I hear numbers like $143 million I become immediately skeptical because these studies are typical financed by someone that benefits from the results.

 

[Gophers_4life]

Of course no companies are coming to the Twin Cities specifically because of the mall or the stadium.

Companies also aren't coming here for a specific park, or specific bike trail. Or any specific thing like that.


They absolutely will go to places where quality of life is high, and people (workers) are happy and want to stay and raise families.


Like I said, people just don't "get it".



As to your other incorrect assertion that a large percentage of the money doesn't stay in the community, I've already addressed that in post #8.

 

[bc2211]

Some sure, but that's always true. Also always true: you have to pay your workers. Payroll is the biggest expense of any company. All the workers at those hotels, restaurants, drivers, etc. took home a big part of that $143 as their paychecks, and at least a good portion of that was spent here. Even if those workers were shipped in from out of state. People gotta eat and have somewhere to stay. That's money spent here.


All money is just flowing around all over the place, anyway. It's fine to make this and that point, but at some level of abstraction .... it's all just moot. Money is always flowing around. It's never just sitting in a mattress in someone's backyard.

Two thoughts:

1) if money is always flowing around and it’s all moot, then how this is a long term benefit to the community as opposed to those business owners? I get what you are saying, but this is a non sequitur.

2) if workers earned a temporary job or a few more shifts to accommodate the short term labor force and tourism, has that lifted them in any impactful way that was impossible without the super bowl? Who knows, maybe now these folks can afford a Costco membership this year. Then again, maybe they can afford a new house. Devil is in the details as to where this 143 went.






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[short ornery norwegian]

to interject a thought - there is a formula - which I cannot find online - that assigns an advertising value to name mentions during major sporting events. i.e. - people watching the Final Four hear references to the Twin Cities and Minneapolis - they see aerial shots of the Minneapolis skyline, etc. The formula I mentioned calculates the equivalent value of advertising if the city of Minneapolis had to purchase airtime.

so, there is a certain 'worth' to the host city for major televised events. Not to mention the prestige of hosting said events, which the host city can use to market itself for other big events, conventions, etc.

So, there is a value beyond the raw total of dollars spent on food, lodging, gas, prostitutes and other essential expenses.

 

[bc2211]

to interject a thought - there is a formula - which I cannot find online - that assigns an advertising value to name mentions during major sporting events. i.e. - people watching the Final Four hear references to the Twin Cities and Minneapolis - they see aerial shots of the Minneapolis skyline, etc. The formula I mentioned calculates the equivalent value of advertising if the city of Minneapolis had to purchase airtime.

so, there is a certain 'worth' to the host city for major televised events. Not to mention the prestige of hosting said events, which the host city can use to market itself for other big events, conventions, etc.

So, there is a value beyond the raw total of dollars spent on food, lodging, gas, prostitutes and other essential expenses.

Ha, I almost missed it.


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[howeda7]

Is that the goal, just to get people to come here? If so - The MOA was primarily financed w/o public investment and has been a draw of people for 20 some years. I’d rather we put our energy into better roads, better services and k-12 education. Those things actually are factors used for companies in their decision on where to locate and bring jobs - can’t think of one company that would make a decision on location based on a stadium.

As for using it (bring big events) as a selling point to build the stadium is crux of my argument, a minimal amount of the funds from these events actually stays in the community. Did building the stadium temporarily add jobs yes, but the long term financial impact is pretty small vs $1 billion that could have been invested in infrastructure. For 300+ days out of the year the stadium has zero value to the local economy. Does it add to quality of life for some, absolutely. Would many of us feel less proud of our city if the Vikings had left, and would we have felt inferior to WI with their Packers, probably. Are those factored into the $143 impact, i don’t know. I “get it”, just dislike using public funds to further enrich the wealthy and when I hear numbers like $143 million I become immediately skeptical because these studies are typical financed by someone that benefits from the results.

If we don't build the stadium, the Vikings leave. You might think it shouldn't be that way, but it is. Many Viking season ticket holders come from out of state (ND, SD IA). All the revenue they spend is lost x 10 games a year x 30 years. All the jobs the Vikings directly create disappear. Some of the $$ in-state fans spend now goes out of state. No Super Bowl. No Final Fours. Etc. Etc.

Does all of this equate to the 50% cost the public put in? It's debatable. The quality of life issue is impossible to quantify exactly, but there's no question that having pro sports makes MSP a more attractive place for large companies to locate and attract talent. They don't flock to Omaha. Keep in mind the same bill that funded US Bank Stadium, also renovated Target Center.

And to top it all off, if we stood our ground and let them move to LA in some sort of righteous anger, in 10 years, we'd end up paying 100% of the cost of a $2 billion stadium to get the Jags to move here. (See the Minnesota Wild).

 

[WoodburyTim]

If we don't build the stadium, the Vikings leave. You might think it shouldn't be that way, but it is. Many Viking season ticket holders come from out of state (ND, SD IA). All the revenue they spend is lost x 10 games a year x 30 years. All the jobs the Vikings directly create disappear. Some of the $$ in-state fans spend now goes out of state. No Super Bowl. No Final Fours. Etc. Etc.

Does all of this equate to the 50% cost the public put in? It's debatable. The quality of life issue is impossible to quantify exactly, but there's no question that having pro sports makes MSP a more attractive place for large companies to locate and attract talent. They don't flock to Omaha. Keep in mind the same bill that funded US Bank Stadium, also renovated Target Center.

And to top it all off, if we stood our ground and let them move to LA in some sort of righteous anger, in 10 years, we'd end up paying 100% of the cost of a $2 billion stadium to get the Jags to move here. (See the Minnesota Wild).

I think two things can be true in this debate. It can be a good thing that a state or municipality that pays for a stadium to keep or get a team because we simply want that addition to our entertainment options. It can also be true that it is not an economic victory.

I think too often proponents of a stadium get caught up trying to justify it on economic terms and there isn't a lot of hard evidence to back that up. But like it or not our governments are involved in many services and projects that aren't suppose to make money.

 

[Gophers_4life]

then how this is a long term benefit to the community as opposed to those business owners?

It's a quality of life improvement. Exactly the same way that a nice park or a nice bike trail is. No one views those are profit generating mechanisms or investments. But they're nice to have.

The stadium should be viewed exactly the same way.

But then some people get pissed off that there are a few men who get rich off it. That is not untrue, and I don't have many words to say to comfort such angry people. All I can say is that having the stadium is a good thing, like having a park is a good thing. Both cost money, but both also provide (intangible) benefit.



I get what you are saying, but this is a non sequitur.

if workers earned a temporary job or a few more shifts to accommodate the short term labor force and tourism, has that lifted them in any impactful way that was impossible without the super bowl?

Of course no worker's life was changed by the (extra) work they got from the Super Bowl or FF. I highly doubt anyone would claim otherwise, certainly not me.

But it's not nothing. It was something. That really is all that's being said here.

It was part of the sales pitch, and it largest was accurately predicted. Good to know.

 

[Gophers_4life]

I think two things can be true in this debate. It can be a good thing that a state or municipality that pays for a stadium to keep or get a team because we simply want that addition to our entertainment options. It can also be true that it is not an economic victory.

I think too often proponents of a stadium get caught up trying to justify it on economic terms and there isn't a lot of hard evidence to back that up. But like it or not our governments are involved in many services and projects that aren't suppose to make money.

Exactly!

 

[howeda7]

I think two things can be true in this debate. It can be a good thing that a state or municipality that pays for a stadium to keep or get a team because we simply want that addition to our entertainment options. It can also be true that it is not an economic victory.

I think too often proponents of a stadium get caught up trying to justify it on economic terms and there isn't a lot of hard evidence to back that up. But like it or not our governments are involved in many services and projects that aren't suppose to make money.

It doesn't have to be an economic "victory" but those who claim we just "wasted" $500 million on a stadium are simply wrong. We re-coup a good portion of that $500 million. We can debate how much and whether it's worth it. But the net economic impact is not $0. Also the Vikings paid for 50%, which is more than the average NFL team has paid in the last 20 years or so.

I agree on the second point.

 

[bottlebass]

I don't like that we helped pay for that stadium but I like that it has brought in events that have stimulated the local economy. That is good for everybody who lives here.

 

[GopherJack]

At least with a stadium, I can see something tangible. I can touch it, feel it, hug it, attend games in it. How the heck do I know that if we don't build the stadium and use that money for education, that little Johnny out in Windom is benefitting?