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Is the World Series a boon for the hosts’ economies?

Nova Safo Oct 21, 2014
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The Major League Baseball World Series gets started Tuesday in Kansas City, between that city’s Royals and the San Francisco Giants. And, as in past years, both cities involved are hoping for an economic boost.

In Kansas City’s case, as much as $50 million dollars could potentially be made once business from the run-up to the World Series and the games themselves are all added up, says Ronnie Burt, CEO of the Kansas City Convention & Visitors Association. He says businesses have already been reporting improved sales.

“Hats, T-shirts, jerseys have just been selling like hotcakes,” Burt says enthusiastically. “As well as restaurants and bars, year-over-year sales have dramatically increased.”

But there are many costs associated with hosting a massive sporting event such as the World Series games, says Robert Baade, an economics professor at Lake Forest College who co-authored a report which looked at three decades’ worth of World Series economics.

“The economic impact of mega-events are exaggerated,” Baade says. “We are much better at keeping track of the benefits than we are the costs.”

For example, in 2012 the city of San Francisco spent $225,000 on a victory parade, and that’s after the Giants footed the majority of the parade bill by spending a million dollars.

There are other costs, as well, Baade says, such as the cost to police departments for providing additional security, traffic and crowd control, clean-up costs, and the price of staffing additional transportation officials.

“And so there will be negative impacts from hosting a World Series, and those have to be taken into account,” says Baade.

The amount of money spent on World Series related expenditures may also be misleading, because some of that spending may be offset by non-spending in other areas of the economy.

“The normal course of commercial activity is often disrupted,” says Baade. “And if you have people in the community, residents of the World Series host, changing their normal activities — commercially speaking — that may detract economic activity in the community overall.”

Add it all up, and Baade says the study he co-authored concluded there was an overall economic benefit to cities hosting World Series games. But the benefit was modest and temporary.

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