Economic Impact of Indian Wells Tourney is 406 Mil

[marc45]

if you like a bit of a dry deep dive into the economics of a tournament...

http://bnpparibasopen.com/en/media-and-news/news/2017/10/18/2017-bnp-paribas-open-economic-impact

2017 BNP Paribas Open Economic Impact Tops $406 Million



OCT 18, 2017

Increase Of More Than $32 Million Seen From 2014 Study; Inclusion of Indian Wells Tennis Garden Renovations Pushes Economic Impact Over $466 Million

The 2017 BNP Paribas Open generated an estimated total gross economic impact on the Coachella Valley regional economy of $406,602,107.

This represents an increase of more than $32 million since 2014 when the last BNP Paribas Open economic impact study was conducted and the estimated total gross economic impact was $373 million. Since the 2006 study, there has been an increase of more than $187 million in economic impact.

Total gross economic impact is derived by calculating the direct ($262,323,940) and indirect and induced ($144,278,167) economic impacts and then adding them together to show the incremental spending above and beyond what would have been expected had the BNP Paribas Open not been held in the area. Direct spending includes money spent by out-of-town visitors, vendors, sponsors, and the tournament organization to a business in the region. Indirect and induced impact is the re-spending of this money by the regional businesses in the regional economy.

The tournament also studied the impact that the renovations to the Indian Wells Tennis Garden had on the 2017 tournament, and when this is factored into the equation, the gross economic impact rose to $466,943,364. Based on the total direct economic impact, the full-time equivalents of those employed by the event is estimated at 5,015 and 5,759 when considering the facility construction as well.

A total of 439,261 fans attended the tournament over the two-week period earlier this year. On average each person attended the tournament 3.09 days. An impressive 87 percent of all unique spectators traveled from outside the region equating to 123,675 out-of-town visitors from which the economic impact is calculated.

The total fiscal impact of the BNP Paribas Open on the Coachella Valley was estimated at just over $19,000,000, generated through tax revenues for city and county governments in the form of sales tax, TOT (Transient Occupancy Tax) and property tax.

The study, conducted by The George Washington University, uses estimates for direct and indirect impact that are based on industry standard methodology, visitor survey results, and the data provided by the organizers and sponsors.

Supporting Quotes

Richard Balocco, Mayor, City of Indian Wells:
“The positive impact of the BNP Paribas Open on the city of Indian Wells and the entire region continues to grow each year, bringing not only economic but also cultural and social benefits to our residents, visitors and guests. We look forward to working together with the tournament for years to come to continue showcasing all that Indian Wells has to offer and providing a top-notch experience for all tournament patrons.”

Scott White, President and CEO, Greater Palm Springs CVB:
“Beyond the impressive economic impact of the BNP Paribas Open to the destination, the event serves to promote the outdoor lifestyle brand of Greater Palm Springs both internationally and domestically. As a destination noted for year-round outdoor recreation and scenic beauty as well as world-renown annual events, the BNP Paribas Open epitomizes those attributes that attract 13 million visitors to our valley each year.”

Piero Pierattoni, Owner, Piero’s PizzaVino and Mamma Gina:
"The BNP Paribas Open consistently attracts record-breaking numbers of visitors from all over the country and the world who come to the Indian Wells Tennis Garden to experience the best in not only tennis, but also dining and entertainment. We’re thrilled to deliver on those expectations year-after-year, and look forward to the continued mutual growth and success.”

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2017 BNP Paribas Open Economic Impact Tops $406 Million
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[Bartelby]

I'm sure this is reasonably accurate, but It still doesn't contribute to exports.

The general trend toward spruiking the benefits of sport as an industry seems to always forget that.

Britain makes money out of F1 events, but more importantly it makes money because engineering teams are located in England churning out technological improvements.

 

[Bobby Jr]

Economic impact reports are always, and I mean always, highly misleading. They make it sound like, for example in this case, $400m of economic benefit occurs because of the tournament... but it's probably a net local benefit of like a tenth of that in true terms.

For example, a person spends $50 on food in the nearby town while on the way to the night session. That $50 is included in the economic impact report. But a person has to eat daily so somewhere elsewhere is now missing that spend. The net gain state-wide could be $0 but they count it as $50. Worse, they then go: staff got paid a that business and they earned collectively, say, $15 component of that original $50. So now the number in the economic report is $65 for $50 actually spent because wages are an economic benefit. And then those wages incurred income tax too of (just guessing 20%) which is another $3 to the total. And then it's assumed they got $5 of tips too which also goes on the report.... It's now $72 for $50 spent. And so on and so on... A small spend can be extrapolated into much larger numbers - you just need to remember that economic "activity" does not mean "money contributed."

Economic reports of this nature (ones to demonstrate the value of an event to a city/region) are always mostly vague estimates using methodology which would sound wrong to any reasonable person you explained it to.

 

[Bartelby]

Yes, all this is certainly true. The real benefit is if you can drag people from overseas specifically for this event. But most events simply attract further-afield locals.

Economic impact reports are always, and I mean always, highly misleading. They make it sound like, for example in this case, $400m of economic benefit occurs because of the tournament... but it's probably a net local benefit of like a tenth of that in true terms.

For example, a person spends $50 on food in the nearby town while on the way to the night session. That $50 is included in the economic impact report. But a person has to eat daily so somewhere elsewhere is now missing that spend. The net gain state-wide could be $0 but they count it as $50. Worse, they then go: staff got paid a that business and they earned collectively, say, $15 component of that original $50. So now the number in the economic report is $65 for $50 actually spent because wages are an economic benefit. And then those wages incurred income tax too of (just guessing 20%) which is another $3 to the total. And then it's assumed they got $5 of tips too which also goes on the report.... It's now $72 for $50 spent. And so on and so on... A small spend can be extrapolated into much larger numbers - you just need to remember that economic "activity" does not mean "money contributed."

Economic reports of this nature (ones to demonstrate the value of an event to a city/region) are always mostly vague estimates using methodology which would sound wrong to any reasonable person you explained it to.

 

[Mainad]

Wonder if Larry Ellison commissioned this report to try and persuade the ITF and ATP that Indian Wells should become the 5th Slam?

 

[Deleted member 77403]

Wonder if Larry Ellison commissioned this report to try and persuade the ITF and ATP that Indian Wells should become the 5th Slam?

I don't know how you can have two USO events. What he can do is try to wrestle away the slam from NYC, highly unlikely that will happen also.

 

[jaggy]

Extra run on blue hair rinses at the local hairdressers brings in some bank also

 

[ollinger]

Economic impact reports are always, and I mean always, highly misleading

Generally agreed. What's been studied and written about sports economics is that events and local teams generally add little if anything to a local economy. Economists find that people are going to spend a certain amount of money on entertainment, and if they don't spend it at one venue, they'll spend it at another. And those other venues don't generally require the same police overtime and other expenses that a sporting event entails.