Is All-Star Game really worth $80M to San Diego?

Posted at 12:22 PM, Jul 11, 2016
and last updated 2016-07-11 15:23:25-04

SAN DIEGO -- San Diego city officials are anticipating a big economic windfall from Tuesday's All-Star Game at Petco Park.

In a presentation to the City Council in December 2014, city staff said the game and related events, including FanFest at the San Diego Convention Center, could generate an overall economic impact of $80 million.
Citing estimates from the San Diego Tourism Authority, the city said about 160,000 people will attend the game and other events. About 60,000 of those fans are expected to come from outside San Diego, generating an estimated $1.2 million in hotel room taxes. The city also estimated the All-Star Game would generate $1 million in sales tax revenue for the city’s general fund.
But some sports economists caution that advance estimates of an event’s financial impact are overly optimistic. They point to the substitution effect, where large events may lead to increased revenue for some businesses but lower earnings for others. Robert Baade, an economics professor at Lake Forest College in Illinois, said that means with downtown packed with fans for the All-Star Game, some tourists may stay away from the area and spend their money elsewhere.
Baade studied two decades of All-Star Games and found the economic impact of the game could be negative.
“Although hotel rooms during a mega-event may be filled with baseball fans, if hotels in the host city are normally at or near capacity during the time period in which the event is held, it may be that mega-event visitors are simply crowding out other potential visitors,” Baade wrote in a report in 2001.
Baade discusses the value of an All-Star Game to host cities on KPBS Midday Edition on Monday.