Beware stories that seek to quantify the economic benefit to an area of hosting an event. Too often they overstate the dollar amounts.
We speak of this because today’s Johnstown Woke Tribune headlines on Page A1 the “$2M windfall” to be realized by the area because Johnstown is hosting a kids wrestling tournament over the weekend.
Sounds good and it is good, but this good?
The story refers to an estimated 800 wrestlers who, combined with their families, will provide the “windfall.” Even without enlisting the aid of my son the math teacher, I divided $2 million by 800 and came up with $2,500 per family.
The number seems high to me.
For reference, the mayor of Glendale, Ariz., told ESPN that his city LOST $1 million hosting the Super Bowl in 2008.
Since then, the topic of economic windfalls from hosting Super Bowls, certainly the most high-profile event in domestic sports, has come under fire with economists debating just how much economic benefit is provided once costs of hosting are deducted and the NFL’s cut is factored into the calculations.
There also is what I will call the Orange Bowl factor to be considered regarding hosting events. Back in the early 1980s, when Florida State was becoming a national power in football, and when bowl games were not all aligned with conferences, the Orange Bowl people felt pressured to invite Florida State, and did for both the 1980 and 1981 games.
There is a famous anonymous quote from one of those Orange Bowl types, noting that the average Florida State fan arrives wearing a pair of jeans with a $5 bill in a pocket, and doesn’t change either during the time spent in Miami.
Translation: They weren’t big spenders from far away, jetting in to enjoy the sunshine and entertain themselves, price be damned.
I will guess that many of these Johnstown tournament wrestlers and their families who have descended upon the city are not from all that far away and so may just drive in each day, watching costs all the time. Nothing wrong with that, unless you’re projecting $2,500 a family in economic benefit.
An accompanying story in the paper’s sports section today seems to bear out the local wrestler angle. It refers to 11 wrestlers from Bishop McCort Catholic in Johnstown. There’s even a quote about wrestlers being able to sleep in their own beds between days of the competition.
The story goes on to detail names of more than 70 other area participants from Cambria, Bedford, Indiana, Westmoreland and Somerset counties.
There likely are even more from nearby counties such as Clearfield, Centre and Fayette, all of whom might forego hotels, presumably the largest part of that $2,500 per family calculus.
I further will presume that many who do stay overnight are not looking to take rooms at high-end hotels and might be eating more fast food than partaking of fine, sitdown dining. Maybe they are subsisting on snack bar food at what I continue to call the Cambria County War Memorial Arena.
Some events attempting to determine economic impact actually survey participants before and after to determine spending. Was this done in the case of this wrestling tournament? If so, it was not mentioned in the story, which just sort of threw in that $2 million economic impact as having been “estimated” by the local tourism people.
Attributing a number to a source is a familiar journalistic method that presumably absolves the writer of blame should the information prove to be incorrect and also negates the need to research the calculation oneself.
Was this estimate based on the tourism peoples’ questioning of participants, or not? It is not clear.
A lot of this stuff is derived by formula, the kind of thing that gives us seasonal adjustments of more than 400,000 jobs in periodic government estimates, often to be walked back at a later date.
One of the basics of economic impact estimation is to factor in money velocity. The $10 I spend at a local restaurant, gets spent again to pay utilities, rent, or vendors to restock the food larder. That $10 gets respent again and again and if you count the same money at each turnover, a small total multiplies quickly into a large one.
If this the case with this “windfall” amount? Who knows? Details are lacking.
To sum up: I’m glad the lights are on at the War Memorial this weekend and paying customers are in town for an event.
But I’d love to be educated on how that adds up to a $2 million “windfall” for “Johnstown and the wider Cambria County region.”