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(Pro) Bowling for Dollars

Interesting comments on ESPN.com from the Hawaii Governor Neil Abercrombie regarding state payments to the NFL for the right to host the Pro Bowl. In his words,

You can't do things like give 4 million bucks to a $9 billion football industry and not give any money to children. You've got this spectacle of these multimillionaires and billionaires out there arguing about how they're going to divide it up, and then they come and ask us to bribe them with $4 million to have a scrimmage out here in paradise. We've got to get our values straight and our priorities straight.

Responding to claims that the Pro Bowl brings in 17,000 fans and generates $28.15 million in visitor spending, Acbercrombie responds, ""Oh please. We'll get more out of civil unions in a weekend then we'll get out of those guys."

Abercrombie's comments about civil unions are essentially the "crowding out" argument that we commonly bring up here at thesportseconomist.com. Sports fans displace other visitors who would have come and spent money in Hawaii instead.

Rob Baumann, Chihiro Muroi and I published a paper the the Journal of Sport Economics last year (working paper version here) about this very event. Besides having dreamy beaches, Hawaii also has dreamy data sources for economists. As a remote tourist desitination island, they have really precise visitor arrival data. Our  analysis of daily visitor arrivals finds that the Pro Bowl is associated with roughly an extra 6,000 tourist arrivals. While 17,000 may come to the game from outside the state, their presence crowds out another 11,000 other tourists leading to only a marginal increase of 6,000 visitors. By comparison, the Honolulu Marathon, which receives no funding from the state sports tourism board, is responsible for a similar marginal increase in tourists to Hawaii.

While the tourism effect from the Pro Bowl is real, the numbers appear to be roughly 1/3 that claimed by tourism officials, and at that percentage there is a real question about whether one should give $4 million in payments to the NFL in order to generate $1 million in tax revenue.

Thanks to both Ron Gecan and Skip Sauer for pointing out the ESPN article.