The justification for financing many sport facilities is often based on ?arguments made about the economic benefits that the development will ?have on the local co

1 Economic Impact Analysis

Economic Impact Analysis

Zachary MacMath

Southern New Hampshire University

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2 Economic Impact Analysis

To best analyze the economic impact of a sport facility, using an economic impact

analysis or report on the facility helps to show the economic benefits a sports facility can have on

a particular area. “In the context of sport, economic impact is defined as the net economic change

in a host community that results from spending attributed to a sport event or facility (Turco &

Kelsey, 1992).” (Crompton, 1995) There are five key areas to analyze when considering the

economic impact, construction, employment, supply chain, local income, and events. In order to

get the best use of an economic analysis, it should be done by an independent entity, separate

from the public space or private owner, and have full access to all available data so it can

produce the most realistic numbers to present the overall economic impact of such facility.

To best illustrate an economic impact analysis, a report on the Hays sports complex in

Hays, Kansas. “The proposed complex features eight baseball/softball fields, four football fields

and four soccer fields. In addition to the fields, the sports complex would offer areas to house a

maintenance building, shared concessions, a picnic area, playground facilities, warm-up areas

and ample parking.” ((Brinker & Walker, 2008) This multi-sport complex is typical in suburban

areas and their funding is typically contingent on an economic impact analysis. In this report,

they focus on the potential of the sport facility to host youth sport tournaments that will generate

revenue for the facility and surrounding area. Besides direct revenue brought in from the new

facility, it could also lead to new businesses being started, “Other economic considerations

include the potential for the increased notoriety resulting from the tournaments to draw new

businesses and residents to Hays.” (Brinker & Walker, 2008)

Construction costs take up a vast majority of the funding for a new sports facility, but

also provide hundreds, if not thousands of jobs while the facility is being built. “One of the noted

benefits associated with the construction of a new sport facility is the creation of jobs. Initially,

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3 Economic Impact Analysis

there will be many construction jobs created. Once the construction is complete, individuals will

be needed to run the facility, from ticket collectors to concession stand workers to maintenance

personnel.” (Robertson) Employing locals is an added benefit that economic facility analysis can

gauge when deciding if the construction of a facility will in fact boost the surrounding area.

The impact on the surrounding housing market seems to be a big takeaway in many sport

facilities reports. This is done to help convince locals that their housing values could also benefit

from the constructing of a new facility or stadium. By adding value to the surrounding

neighborhoods, taxpayers feel better about approving a new facility that also boost their home

values.

Having a transparent audit is of the utmost importance to any economic impact analysis.

Using inflated or deflated numbers in a review can be very detrimental for the party’s involved.

“Rather, they incorporate assumptions and adopt methods that facilitate their use as advocacy

documents intended to provide a public subsidy for a sports project with a convincing aura of

economic legitimacy.” (Crompton, 1995) Crompton goes on to say, “Each situation should be

analyzed and assessed independently.” (Crompton, 1995) When numbers are skewed or inflated,

or from different sources, it doesn’t truly represent the study at hand.

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4 Economic Impact Analysis

Bibliography

Crompton, J. L. (1995). Economic Impact Analysis of Sports Facilities and Events: Eleven

Sources of Misapplication. Journal of Sport Management, 9(1), 14-35.

doi:10.1123/jsm.9.1.14

Robertson, R. (n.d.). United States Sports Academy America's Sports University®. Retrieved

July 05, 2020, from http://thesportdigest.com/archive/article/economic-impact-sports-

facilities

Wayne, L. (1996, July 27). Picking Up the Tab For Fields of Dreams;Taxpayers Build Stadiums;

Owners Cash in. Retrieved July 02, 2020, from

https://www.nytimes.com/1996/07/27/business/picking-up-the-tab-for-fields-of-dreams-

taxpayers-build-stadiums-owners-cash-in.html

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