It’s notoriously difficult to establish, with any degree of certainty, the economic impact a particular sporting event, art exhibition, or even a box office hit at a city centre theatre might have.
For instance, America’s Super Bowl is often credited with bringing great riches to the metropolitan area in which it is staged each year. Estimates of its economic benefit have varied from $300 million up to $600 million, although earlier this year, one study concluded that at best, no more than $30 million in benefit could be attributed to hosting it.
The problem with attempting to estimate the economic impact of a mega sporting event is whether the money spent on it, primarily by governments, could have been put to better use elsewhere. Perhaps this explains the bureaucratic penchant for highlighting tenuous ‘longer-term’ benefits.
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It would appear then that, as a rule of thumb, the bigger the occasion or event, the greater the margin for error. It follows that estimates of benefits, economic or otherwise, are likely to be more accurate when smaller, or shorter, sporting events are considered.
Starting from the premise that spectators buy their tickets because they’re attracted by the prospect of being entertained, should a sporting event stretch over several days, they’re more inclined to stay in an hotel, visit local bars and restaurants, use public transport and taxis. One-day visitors too must eat, drink, buy a programme and perhaps a souvenir or other merchandise, all extras on top of their ticket and travel costs.
Given that these actions are easier to predict, the economic impact of smaller, or shorter events are less prone to exaggeration.
Earlier this week, Edgbaston Stadium and Marketing Birmingham (the body responsible for the excellent Visit Birmingham website) announced that next year’s Third Ashes Test could provide a boost in excess of £26 million to the local economy. More than 120,000 spectators are expected to attend the game between July 29 and August 2, which suggests that the economic forecasts have an unmistakable ring of integrity about them.
A similar exercise was undertaken last season, before Edgbaston hosted five ICC Champions Trophy matches, when their direct impact upon the local economy was put at more than £15 million. In addition, post-Test match studies completed at Durham and Lord’s last season found that a five day Test match generated an economic benefit of around £20 million (in Durham) and more than £8 million per day at Lord’s.
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In other words, there is a clear commercial benefit which accrues to the stadium and the city in which it’s situated when it hosts a high-profile Test match.
Tom Marlow of Marketing Birmingham explains that the forecast is assembled using visitor surveys and by extrapolating data from economic activity monitors designed specifically to chart tourists’ expenditure patterns.
“Our figures for next year’s Test match assume that approximately 95 per cent of spectators will be day visitors, while the balance will spend at least one night in a city hotel,” says Mr Marlow.
“We take account of this and of other factors, such as the variation in ticket prices [the fifth day of a Test match is always significantly less expensive to attend], as well as likely expenditure patterns to come up with our figure of £26 million.”
As Mr Marlow points out, the figure stands comparison with similar studies. “Following the recent Conservative Party Conference, for example, which around 14,000 delegates attended over four days, we found that their collective, direct economic impact exceeded £17 million. This may appear high, but we took account of the fact that most delegates spent three nights in hotels, so boosting their impact.
“The forecasted economic boost we expect to be provided by two Rugby World Cup matches at Villa Park next year is also around £17 million.
“Although more people [around 90,000] are expected to attend the games than visited the Conservative conference, significantly fewer will stay overnight.”
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As for next year’s Ashes Test, Colin Povey, Warwickshire’s chief executive, said: “We’re [anticipating] a record five-day attendance. Day three has already sold out and we expect the last few tickets for day four to be snapped up within the next few days.”
Edgbaston has hosted almost 50 Test matches, although next summer’s Ashes duel will be the first since the £32 million redevelopment of the ground’s south stand was completed.
Emma Gray, Director of Marketing Services at Visit Birmingham, said: “Sporting events are great opportunities to show off the city’s highlights to visiting fans, dignitaries and a global television audience. With significant investments being made to our transport infrastructure – including the redevelopment of New Street Station – we are creating an even more welcoming backdrop for future England cricket fixtures and showpiece international tournaments.”
Ms Gray’s comment highlights another, potentially longer-term economic benefit (showing the city off to an international television audience), a timely promotion of the city and Edgbaston.
In December, the ECB will announce details of England’s international home fixtures to 2019, a period which includes the Cricket World Cup and the 2017 Champions Trophy. Next April, it is scheduled to reveal England’s fixtures to 2023. Edgbaston has bid to host a series of high-profile matches over the next nine years and hopes to be rewarded with what many would say is a fair share of fixtures considering the investment it has made in facilities.
Of course, we can sometimes get carried away when looking at longer-term estimates of economic benefit. After all, there’s more to life than profit and loss and it’s always worth bearing in mind that very few, if any, pre-Olympic or World Cup projections of economic benefit prove anywhere near accurate, which is why politicians always focus on the longer-term ‘legacy’ benefits.
If the awarding of a major one-day cricket series or a batch of Test matches confers enjoyment on cricket fans and local businesses benefit as well, who is to say that the latter is greater than the former?
All the same, should a tangible economic benefit accrue to the city too, there’s no doubt it’ll be welcomed with open arms.