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Dallas TV Reporter Examines the Numbers on Economic Impact

Economists can write papers which illustrate the lack of economic impact from major sports until we're blue in the face.  As long as there is a paid consultant who can supply survey based, multiplier enhanced economic impact analysis, the two approaches:  hypothetical & wishful, vs. evidence & skepticism, tend to cancel each other out in the minds of the public.

But the debate may be advanced when non-economists in the media start turning over rocks and reporting what they find.  Byron Harris of WFAA in Dallas just did that, in examining local tax receipts for the month of February, when the NBA held its all star game at Cowboys Stadium in Arlington.  Here's the story, in both written and video form.  Both are worth a look.

The predicted impact was $152 million in additional spending, supplied by a firm called "Marketing Information Masters."  Here's what Byron Harris found:

Tax receipts from the State of Texas show the game brought in zero.

The numbers are reflected in tax receipts from five North Texas cities which were predicted to post large hotel, restaurant and alcohol revenue increases as a result of the game.

But instead of that boost, year-to-year revenue comparisons with 2009 — during the depth of the economic downturn — show only small increases or decreases during February, the month of the game. The All-Star contest was early in the month, allowing businesses ample time to report their revenues.

Dallas had been predicted to reap the biggest bonus from the game. Marketing Information Masters forecast that fans would spend $22 million on hotels in Dallas for the February game. But state tax receipts show hotel revenue for Dallas was actually down $800,000 from the year before — when the economy was worse.

The consultant said fans would spend $20 million on alcohol in Dallas alone. But tax receipts show people spent $1.2 million less for the whole month than they did a year earlier, when there was no All-Star game in the area.

In short, Harris looked at data on tax receipts and could find no evidence that the NBA all star game -- a game in which attendance was a record 108,713 -- resulted in increased spending in the Dallas metroplex area. It would be a useful exercise for an economist to follow up on this, and examine economy-wide trends with a bit more precision than the Dallas TV reporter; a good project for advanced undergrads or masters students, perhaps.  Despite this potential caveat regarding the bottom line figures that Harris reports, major kudos go his way for getting his hands dirty and reporting the facts.