Your city recently won the bid to host its first NCAA Final Four men's basketball championship. Part
Question:
Your city recently won the bid to host its first NCAA Final Four men's basketball championship. Part of the costs of hosting the event were paid from a tax fund created to attract major events. A local TV station ran a story about the potential economic impact on their news broadcast that included an interview with a beaming mayor of the city, who stated "This is going to be a huge economic windfall for our city, all of our hotels will be full and think about all of the people going to those games and the media attention. We are in the big leagues. This is a huge event and I've been told by the organizers that economists say the economic impact will be over $200 million for the city".
As an expert on sport management and finance, you've been asked to help conduct an independent economic impact assessment of the upcoming Final Four. There has been increasing scrutiny in the media and taxpayers rights' groups about economic impact studies. Therefore, the study must be conducted and the results reported as accurately as possible.
Conducting an expert analysis of previous Final Four events, you come up with the following assumptions:
Total Projected Attendance: 150,000
Total Visitors: 95,000
Direct Spending Estimates (Per Person) & IMPLAN coefficients for your city
Spending Category | Avg. Per Person Spending for Final Four Weekend | Sales (Output) Coefficient | Personal Income Coefficient |
Food & Beverage | $300.00 | 1.60 | 0.65 |
Shopping | $150.00 | 1.35 | 0.75 |
Hotel | $550.00 | 3.50 | 0.45 |
Other Expenses | $100.00 | 1.25 | 0.55 |
1. Based on your calculations and assumptions, what would you report as the expected actual economic impact of hosting the Men's Final Four to your city?
2. Following the event, the mayor and the chairperson of the local organizing committee were interviewed by local media and declared that the actual economic impact of the event were in line with projected estimates and could come in between $300 and $500 million. How does your results compare to theirs? Why.
Business Law The Ethical Global and E-Commerce Environment
ISBN: 978-0071317658
15th edition
Authors: Jane Mallor, James Barnes, Thomas Bowers, Arlen Langvardt