Rounding down the roundball multiplier
Impressive-sounding economic impact estimates have become a staple of every major sporting event. See, for example, the Detroit Free Press story mentioning a $30 million to $50 million benefit from the NCAA men’s basketball championship, and our own story about St. Louis’ $20 million bounce from the women’s version. For the multiplier effect to work, however, most of the fans must come from out of town.
With the unexpected success of the Michigan State Spartans, that didn’t happen in Detroit. The Free Exchange blog wonders how much that reduces the economic boost in a city that really needed some help:
The economic benefit deteriorated further when Michigan State won the semifinal round of the tournament. Attending a Final Four tournament as a fan generally involves buying tickets to all the games in advance and arranging flight and hotel before knowing whether your team will win. Once Michigan State won in the semifinals, the school’s fans sought out disappointed ticketholders from Connecticut and Villanova …. I spoke to a non-trivial number of Connecticut fans who ended up turning a profit from the weekend and left early. That meant less revenue for the Michigan as out of town fans left and took their money home with them. A Michigan State victory might have been worth the foregone money, but the Spartans ended up being beaten in the finals by North Carolina. Yet another blow for a state already down on its luck.
Whew! Good thing the Billikens aren’t in the women’s Final Four.
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David Nicklaus has covered St. Louis business for more than 25 years. His column appears three days a week on the Post-Dispatch business page. 
Recreation dollars spent in one place are usually recreation dollars NOT spent somewhere else. All that these tournaments do is to shift the location around.
The REAL economic impact of professional sports (for which college sports are the entryway) is the highly negative one of inducing kids (mostly poor black males) to value athletics way above academics. One of the most hopeful benefits of having the Obama family in the Presidency is to make it clear to all low income people — but blacks in particular — that the way out of poverty is through parental responsibility in the timing and number of children, and dedication to their education in subjects other than sports.