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10. Impact of Major Sporting Events
University of East Anglia
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ECO-6004A Business and Economics of Sport
Impact of Major Sporting Events
(Week 10)
Outline of today’s lecture
- Understand the rationale for public funding of
sport facilities and events.
- Demonstrate an understanding of how to
assess the impact of major sporting events
and to be able to assess this from both
tangible and intangible perspectives.
Introduction
However before we discuss some of the approaches used to assess the impact of sporting events we must first have some broad understanding as to why decision-makers such as national governments intervene in the provision of sporting activities.
Public Financing of Sport
Governments intervene in the provision of a whole range of sporting activities from grass-roots participation to international sporting events. Some examples:
- Development of sporting facilities (via Lottery funding, for example)
- Elite sport programs (UK Sport)
- Bidding, planning and implementing of international sporting events
- Antidoping and antihooligan initiatives
Public Financing of Sport
The basis of government policy towards participatory sport is the merit good argument, subject to two potential sources of market failure:
- Efficiency –under-provision by private and voluntary markets produces less than the socially optimum output (e. positive externalities - reduces the health costs associated with sedentary lifestyles.)
Public Financing of Sport
The basis of government policy towards participatory sport is the merit good argument, subject to two potential sources of market failure:
- Equity – Intervention to promote fairness (e. differences in participation between social groups)
Therefore governments invest in sports and physical activity in promoting health. It has been argued that, along with other measures, sport can help reduce crime, improve education and generate greater social inclusion. Again, see the evidence provided in the first lecture.
Public Financing of Sport
As well as playing sport and being active recreationally, there are also arguments about the benefits generated from:
(2) hosting hallmark (major) events;
- Legacy of facilities
e. Commonwealth Games 2002 (Manchester), and 2012 London Games
Public Financing of Sport
As well as playing sport and being active recreationally, there are also arguments about the benefits generated from:
(3) sport acting as a catalyst for urban renewal
Small-scale Building stadia or arenas to host professional team sports - Relocation of stadia - “Disneyfication” of facilities
Economic Assessment of Sporting
Events
As we will see there are significant costs associated with hosting major sporting events but it has been argued that there are also a number of benefits.
First and foremost, hosting a (major) sporting event attracts visitors.
Economic Assessment of Sporting
Events
Economic Assessment of Sporting
Events
Economic impact can be defined as the measure of the spending and employment effects of a specific project. In the case of the London 2012 Games, the total economic impact can be considered to be the sum of direct, indirect, and induced impacts resulting from the Games.
The direct impact of the Games includes the purchases of Games organisers in the preparation and execution of the Olympic and Paralympic Games.
Economic Assessment of Sporting
Events
Economic impact can be defined as the measure of the spending and employment effects of a specific project. In the case of the London 2012 Games, the total economic impact can be considered to be the sum of direct, indirect, and induced impacts resulting from the Games.
Indirect impacts are experienced by those companies and individuals who operate in the goods and service industries that supply the industries that receive expenditures by Games organisers.
Economic Assessment of Sporting
Events
In contrast to economic impact analysis, cost-benefit analysis attempts to provider a broader assessment of major sporting events by better reflecting opportunity cost and including a broader range of potential benefits.
Economic Assessment of Sporting
Events
Conventional cost-benefit analysis would include:
Benefits
Income generated by event related investment
direct impact: investment incomes for local construction firms
multiplier effects: initial investment injection leading to further spending in the region.
10. Impact of Major Sporting Events
University: University of East Anglia
