Target Field All Star Game
The recent news that the MLB All-Star Game delivered much less than the promised $75 million economic impact to the region is hard to interpret. After all, the revised estimates of $21 million to $55 million are nothing to sneeze at. Until you remember that the area offered countless millions in secret subsidies, plus added costs in public services like police and security.
Now that the Super Bowl and Final Four are coming, we’re going to be treated to even more coverage about the economic impact those sporting events will bring. But here’s the reality: These events are a boon only to the extent that they can bring new dollars into the local economy.
Sales tax receipts for the region were flat during the All-Star Game, which is worrisome. The question now is whether most of the spending during the ASG was robbing Peter to pay Paul. For example, my family allocated a few hundred bucks to buy tickets and spend at the ASG events. But like most of you, we have a limited entertainment budget and those dollars were merely reallocated from other spending.
What that means is maybe I spent less on Timberwolves tickets this winter. Or maybe we ate out less or more cheaply this fall. And therein lies the problem: I reallocated spending from privately owned, non-subsidized businesses to an event taxpayers were helping bankroll. Is that good public policy? No, it is not.
Now we’re told that the national profile of these events brings wonderful attention to the region that pays off long-term, but I’ve never seen any hard data that definitively shows previous Super Bowls, Final Fours, or ASGs changed MSP’s tourism profile or long-term visitor counts, so I don’t buy those assertions.
So the basic question is whether these subsidized events are bringing new dollars into the region, or are they merely transferring that money from other local businesses? The Super Bowl—more than any other sporting event—is global in scale. Most of the tickets will be sold to out-of-town heavy hitters. Frustrating as that may be, it’s the type of event that is likely to pour “fresh” spending into the area.
Out-of-town visitors eat meals in restaurants, spend nights in hotels, and do a lot of shopping at Mall of America. Those are dollars that might have otherwise been spent outside MSP. That kind of spending is worth subsidizing, even if those folks never return.
On the other hand, subsidies for events that prime the economic pump by merely compelling locals to spend have to be understood for what they are: economic transfers. Most of us have a finite pool of recreational dollars. In an era of flat incomes and slow inflation, those pools are not growing.
But as much as we enjoy attending ASGs and take pride in hosting events, we have to address the fact that much of the spending that supports those events is often at the expense of small local businesses. It’s economic Darwinism at its starkest. Until you remember that those events aren’t paying their own way and taxpayers are making them possible.
At that point, it’s no longer capitalism, but something far more muddled and difficult to endorse.