day 2 session 3 chris gratton sheffield hallam uni

7/28/2019 Day 2 Session 3 Chris Gratton Sheffield Hallam Uni

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Sport and EconomicRegeneration

Chris GrattonSport Industry Research Centre

Sheffield Hallam UniversityUK



• What is economic regeneration?

• Economic regeneration through sports events:

- USA experience

- Europe/Australia

• Other routes to economic regeneration throughsport



What is economic regeneration?

Increase in local income and employmentthrough economic activity generated by

sport. This may or may not also includean enhancement of local physicalinfrastructure (sport, non-sport, or both).



City sports strategies in the USA

Many cities in the USA have invested vast

amounts of money on sports stadia on thebasis of arguments relating to theeconomic benefits to the city from suchinvestment. Most of these strategies havebeen based on professional team sports:

American football, baseball, ice hockey,and basketball.



Baade 2003

'... the number of stadiums that have been

built since 1987 to the present isunprecedented. Approximately 80 per centof the professional sports facilities in the

United States will have been replaced orhave undergone major renovation duringthis period of time. The new facilities have

cost more than $19 billion in total, and thepublic has provided $13.6 billion, or 71 per

cent, of that amount.’



Evidence

Baade (1996), Noll and Zimbalist (1997),

and Coates and Humphreys (1999),however, showed no significant directeconomic impact on the host cities from

such stadium development. Crompton(1995, 2001) also argues that economicimpact arguments in favour of such

stadium construction using publicsubsidies have been substantially

exaggerated.



Other Benefits?

Crompton (2001, 2004) goes on to suggest

that there are other possible benefits tocities from such developments: increasedcommunity visibility, enhanced communityimage, stimulation of additionaldevelopment related to the stadium, and

psychic income to city residents fromhaving a professional team in the city.



Europe/Australia

City urban regeneration strategies based

on hosting major sports events (egOlympics, World Cup in soccer, WorldChampionships in other sports) rather thanprofessional team sports



Kasimati (2003)

Kasimati (2003) analysed all impact studies of thesummer Olympics from 1984 to 2004 and found,

in each case, that the studies were done prior tothe Games, were not based on primary data,and were, in general, commissioned by

proponents of the Games. He found that theeconomic impacts were likely to be inflated sincethe studies did not take into account supply-sideconstraints such as investment crowding out,

price increases due to resource scarcity, and thedisplacement of tourists who would have been inthe host had the Olympics not been held there.



Real Evidence

UK Sport since 1997 have commissioned aseries of economic impact studies of major

sports events held in the UK to assess theeconomic impact of hosting major sportsevents.

e conomc mpact n



e conomc mpact nContext

£5,061,786

£2,221,130 £2,196,298£2,068,663

£1,943,715

£1,485,141

£397,921£314,513 £257,802

£176,937

£-

£1,000,000

£2,000,000

£3,000,000

£4,000,000

£5,000,000

£6,000,000

Cricket Test

Match

World

Badminton

European

Show

J umping

Women's

Open Golf

World Judo World Boxing World Indoor

Climbing

European

Short Course

Swimming

European

J unior

Swimming

IAAF

Athletics



The Continuum Between Spectator and Competitor Driven Events

91% 90%

78%75%

72%

51%

31%

9% 8%

9% 10%

22%25%

28%

49%

69%

91% 92%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Cricket Test

Match

Women's Open

Golf

World Indoor

Climbing

IAAF Athletics European Show

J umping

World J udo World

Badminton

European Short

CourseSwimming

European

J uniorSwimming

Spectators Other Groups



Lessons from Event Studies

• Events range across a spectrum from competitor-

driven to spectator-driven

• The more competitor driven the event, the easier it

is to forecast the economic impact

• The more spectator driven the event, the more

difficult the forecasting exercise. Often forecastspectator numbers are huge overestimates.



Events Typology

• Type A Irregular, major international spectator eventsgenerating significant economic activity and media

interest (e.g. Olympics, World Cup)• Type B Major spectator events, generating significant

economic activity, media interest and part of an

annual domestic cycle (e.g. FA Cup Final,Wimbledon)

• Type C Irregular one-off major spectator/competitor event

generating uncertain level of economic activity (e.Grand Prix Athletics, World MastersChampionships)

• Type D Major competitive events generating little economiactivity and part of an annual cycle (e.g. NationalChampionships in most sports)



2002 Manchester Commonwealth Games:

Expenditure• £ 200 million in sporting venues in Manchester

• £ 470 million investment in transport and other

infrastructure

• Legacy activit ies were funded under the 2002 North

West Economic and Social Single Regeneration

Budget Programme, operating from 1999 to 2004




Benefits• Economic Impact on East Manchester: 2000

new FTE jobs

• Economic Impact on rest of Manchester: 2900

FTE jobs

• Economic Impact on rest of Northwest: 2080

FTE jobs

» [Cambridge Policy Consultants, 2003]




Benefits

Employment change in East Manchester between 1999 and

2002: 1450 jobs (including both full and part-time) or 4%increase on 1999 level

- 23% increase in construction jobs

- 23% increase in distribution, hotelsand restaurants jobs

- 24% increase in other services jobs(mainly in recreation, culture and sport)

» [ Faber Maunsell, 2004]



Legacy Benefits

• East Manchester now home of Manchester CityFootball Club and the headquarters of the English

Institute of Sport

• Further major sports events planned for the future

• Manchester moved up European Cities Monitor from19th in 2002 to 13th in 2003

• Asda Wallmart superstore has moved into EastManchester occupying 180,000 square feet andemploying 760 FTE staff



A Framework For Evaluating Major Sports Events

Economic Impact

EventAims

Media & SponsorEvaluation

Sports Development

Place Marketing Effects



Place Marketing Effects

• Positive images of host city

• Verbal mentions of city / facility

• 2002 World Snooker in Sheffield



The "Value" of Place Marketing Effects To Sheffield

The Crucible Theatre Sheffield Total

Theoretical value of verbal mentionson BBC television

£2,197,724 £525,329 £2,723,053

Theoretical value of postcards onBBC television

£ 343,928 £144,665 £488,593

Total £2,541,652 £669,994 £3,211,646



Total Economic Benefit Of 2002 World Snooker

Championship £5.47m

Summary Of Benefits Of Hosting 2002 World Snooker Championship

£2,260,092£2,197,724

£525,329

£144,665

£343,928

£-

£500,000

£1,000,000

£1,500,000

£2,000,000

£2,500,000

Economic Impact Verbal Mentions -

Crucible

Verbal Mentions -

Sheffield

Postcards - Crucible Postcards - Sheffield

L Eff t B l 10



Legacy Effects: Barcelona 10 years

after the Olympics1990 2001

Hotel capacity (beds) 18,307 34,303Number of tourists 1.74m 3.38m

Number of overnights 3.8m 8mAverage room occupancy71% 84%

Average stay 2.84 3.17% non-Spanish tourists 49% 69%



Best cities to locate a business

RANK 1990 2002

London 1 1Paris 2 2Frankfurt 3 3

Brussels 4 4Amsterdam 5 5Barcelona 11 6

.. ..

.. ..Athens 22 28



Employment in sport in Cornwall

SPORT FULL TIME PART TIME TURNOVER

Cycling 100 60 £5,000,000

Diving 200 200 £17,500,000Fishing 154 31 £7,000,000

Golf 418 190 £32,000,000

Horse Riding 158 170 £6,000,000

Pilot Gig £2,500,000Sailing 322 92 £52,000,000

Surfing 1036 571 £64,000,000

Other Water sports 240 240 £19,000,0002628 1554 £205,000,000

day 2 session 3 chris gratton sheffield hallam uni

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