There has been much debate over how much a sports team’s success translates into economic impact. Sports economist Daniel Rascher (partner, OSKR) explained, “The usual issue is the confounding factor. Unless something is super clear, [economists and data scientists are] often going to say it’s not happening.”
But Craig Richard (president and CEO, Tampa Bay Economic Development Council) insists hosting four championship events over the last 18 months has undoubtedly been a boon to the market. In addition to any short-term effects realized, he says the uptick in corporate relocations that have occurred since the city became known as “Champa Bay” will benefit the region for years to come. The Tampa Bay EDC chief reports business recruitment leads (an economic term for business development), excluding companies merely expanding their footprint within the market, are up 33% in 2021 over FY20.
Our Take: While perhaps in the minority amongst sports economists and social scientists (a rather skeptical demo by nature), Rascher tends to believe there is a direct effect to hosting marquee sporting events. “If more people are coming into the city to attend these games and spending money that wouldn’t have [otherwise] occurred, then there is definitely going to be an impact in the short-term,” he said.
He surmises that many of his counterparts do not subscribe to the idea because “a lot of the economic research just can’t pick up [the amount spent],” he said. “It is a small number relative to the overall economy in the area. They’re looking for a needle in a haystack.” But just because the impact is comparatively small does not mean it does not exist.
The Tampa Sports Commission has yet to release an economic impact report on the Super Bowl (or the recent World Series and Stanley Cup appearances for that matter). But Tampa Mayor Jane Castor suggested spending on “tickets, the hotel rooms, the restaurants, airlines, those types of things,” did in fact provide an immediate net benefit to the local economy (Tampa Sports Commission estimates SB LV brought in $14 million-plus in hotel revenue). Considering Tampa did not have to construct any new venues to host the championship events, it is almost certain the city came out ahead. For reference, the 2020 Super Bowl Host Committee stated the game generated an economic impact of $571.9 million dollars.
The longer-term effects, however, “are harder to see,” Rascher said. While Castor insists people who saw the city featured prominently on television or those who experienced it in person over the last year and half will come (or come back) for vacation, the sports economist isn’t convinced. “The idea of more tourism in the future is the argument for hosting the Olympics. That people will see [a city], and they will travel there,” he said. “Does anyone make the decision to visit [a place] because they watched TV? That is the part we really don’t know. There are so many reasons why people choose places for vacation.”
It is hard to isolate sporting success as the primary factor in tourism or corporate relocation trends. But the spotlight Tampa has enjoyed would seemingly have contributed. As Castor noted, “The novelty of the [Tampa Bay Lightning championship] boat parade garnered national news and gave people a view of Tampa they may not have seen or even been aware of before.” EDC data reflected a dramatic increase in the number of visitors to their LinkedIn page in the 24-hour period after the Lightning claimed their second consecutive Stanley Cup (+450% on web, +575% on mobile).
Playing host to Super Bowl LV (which coincidentally featured the hometown Bucs) brought a lot of positive attention to the city, as well. More than 96 million people caught a glimpse of the city during the broadcast. That type of exposure is “invaluable,” Castor said. “Those shots of the Tampa Bay area—including St. Petersburg, Clearwater and Tampa—pique individuals’ interests and that turns into people moving here individually or bringing their businesses here.”
But, of course, not every market that hosts a Super Bowl or sees one of its teams wins a championship experiences an uptick in corporate relocations. The difference with Tampa, perhaps, is that it was featured at a time when people were actively considering moving. The warm weather does not hurt, either. “Tampa has experienced a population boom over the past year because of the pandemic,” Richard said. “People have decided when you can work anywhere, why not live in a place that is going to offer [an improved] quality of life?” And as business owners move to the market, so do their businesses. LinkedIn ranked Tampa the fourth most popular city to move to during the pandemic.
Richard acknowledged it is likely the teams’ success would not have driven the same level of interest in corporate relocations had it occurred prior to the pandemic. “Timing has a lot to do with it. The timing of everything. Economic cycles, population trends and sports championships,” he said. But added that it would be unfair to characterize Tampa Bay as “lucky.” “Luck is when opportunity meets preparation, and we have been preparing for this opportunity,” he said. “When you look at the development projects that occurred over the last few years, many of which had the Super Bowl as their due date, they included not just hotel rooms but housing units and office buildings” (infrastructure necessary for growth).
For what it’s worth, the winning has not spawned any new development projects. “Things don’t work that fast in the development arena,” Castor said.