Final Four Economic Impact

Howdy, folks. Long time reader, first time poster. Anyway, I was in quoted in the Louisville Courier Journal last weekend regarding the economic impact of the Final Four on Indianapolis, and I thought the article made a couple of points that might be interesting to the sports economist community.

First of all, I thought it was a pretty fair article. There is always the danger of being taken way out of context by reporters. For example, I told Ms. Stedman, the writer, “If I were Indianapolis, I would love to host the Final Four every year.” But sure enough, Ms. Stedman followed up with the second half of my quote, “The danger comes when people use these inflated estimates to try to justify a new stadium or other public spending.”

Here’s what is most interesting to me, however. In all of the reports I have heard out of Indy for this weekend’s event, including the numbers from this article, the city is citing a $35-$45 million dollar impact, roughly half the size of previous estimates from San Antonio and other host cities. The reason for this lower number is that Indianapolis has not inflated their number with any type of multiplier and the resulting indirect economic impact. Is it possible that us dismal economists (just call me the Dr. Doom of sports) are getting through a little bit?

Mind you, in Indianapolis, even if we won this battle, we have lost the war, as the city is spending millions on a replacement for the less than 25-year old, but economically obsolete, RCA dome. And perhaps the city simply couldn’t find a skilled economist willing to sell his or her soul to boost up the numbers, but the city had an obivous opportunity to at least double their published estimates and perhaps they chose not to. One can always hope.

Victor Matheson

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Author: Victor Matheson

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