Monday, May 26, 2014

More Thoughts on Silliness of Rays' Spring Training Economic Impact

More research on Charlotte County's economic impact report claiming $21 million of benefit from Rays' spring training games: I have since spoken to the author of the report, as well as USF economist Philip Porter.

I had to first apologize to author Walter Klages out of Tampa for using a few false assumptions in my initial reaction post.  Fortunately, he was about as friendly and as polite as can be.

But I had to ask him about my big problem with the study - that it failed to take into account baseball fans who would have likely visited the Gulf Coast anyway - even if there was no baseball in Port Charlotte.

Klages' response: His study sure didn't take those things into account; it was never designed to do that.

He added that the majority of overnight visitors who went to Rays games while in Charlotte County likely came to the area for the beaches and weather.  And while he suspected baseball was a factor, he saw it "more like dessert on the platter, rather than the (main course)."

Basically, spring training is a nice bonus for visitors who come to Florida each spring, but there's no economist in his/her right mind that would suggest the Rays added $21 million to the Charlotte County economy last year.  Making the assertion even more ludicrous was the failure to take into account how much of the baseball-related spending was cannibalized from other local tourist attractions and businesses.

Meanwhile, Porter will never earn a living writing lucrative economic impact studies; he's actually made a reputable career debunking them.  So when I asked him to review some of the Charlotte County findings, he concluded that the Rays' economic impact was zero (or potentially negative).

Porter suspects the county's economy in recent years grew at the exact same rate as the state's, suggesting spring training had no overall positive impact there.

He also believes baseball had a negative impact since locals and tourists alike are choosing to send their disposable income to an out-of-town business (the Rays), rather than spending it within the county, where it can get spent several more times over.  Porter says this one of the great mistakes in any sports economic impact study.

Finally, since counties use tax dollars to pay for stadiums (tax dollars that could otherwise be used for schools, police, roads, etc), the only fair economic metric to use in comparisons would be tax receipts, not tourist spending.  That's because you cannot pay debt service with ticket sales, memorabilia sales, and restaurant receipts.

So while the estimated $13.8 million in direct spending is all well and good, if Charlotte Co. and the state collect 7% tax on all of that (they likely didn't), that's only $963,000 the Rays are actually generating for the state and county in tax revenue.

At the end of the day, even if business is booming around the Charlotte Sports Park each spring, the Rays are doing much more for the county's reputation and morale than they are for its bottom line.

No comments:

Post a Comment