International Handbook on the Economics of Mega Sporting Events
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International Handbook on the Economics of Mega Sporting Events

Edited by Wolfgang Maennig and Andrew Zimbalist

From the Olympics to the World Cup, mega sporting events are a source of enjoyment for tens of thousands of people, but can also be a source of intense debate and controversy. This insightful Handbook addresses a number of central questions, including: How are host cities selected and under what economic conditions? How are these events organized, and how is local resistance overcome? Based on historical and empirical experience, what are the pitfalls for the organizers of these events? What are the potential economic benefits, including any international image effects? How can the costs be minimized and the benefits maximized for host cities and countries? How do these mega events impact the challenges of globalization and what is their environmental legacy?
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Chapter 15: Economic Impact of Sports Events

Philip K. Porter and Daniel M. Chin


Philip K. Porter and Daniel M. Chin 1 INTRODUCTION In March 1997 sports economists Robert Baade, Philip Porter and Andrew Zimbalist offered testimony in the trial Poe v. Hillsborough County. At issue was the constitutionality of Hillsborough County, Tampa, Florida and the Tampa Sports Authority using their taxing power and credit to build a stadium for the Tampa Bay Buccaneers.1 Florida law forbids government using either its taxing power or credit in support of private individuals unless such a project serves a ‘paramount public purpose’.2 The trial set the stage for a decade of research by economists into the claims of teams and sporting event sponsors. The National Football League (NFL) in conjunction with Hillsborough County and Tampa City offered testimony from two individuals: one reporting the annual economic impact on the community generated by the presence of the Tampa Bay Buccaneers and the other reporting on research conducted by the Arizona Office of Tourism and the Super Bowl Host Committee about the impact of the 1996 Super Bowl in Phoenix. Tampa was being offered a Super Bowl if they built a new stadium for the team. Zimbalist’s testimony set the stage, describing the NFL, how it obtained monopoly power and could force communities under threat of departure to subsidize team stadium costs. Baade testified that ‘professional sports teams generally have no significant impact on a metropolitan economy’ and ‘sports investments appear to be an economically unsound use of a community’s scarce financial resources’ (Baade, 1994). Porter testified that hosting...

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