Teams and entertainers are not the only ones taking center stage at major sporting events such as Super Bowl XXXIV. In the case of major events, the host city works behind the scenes for years before coming to the forefront to showcase itself. Jacksonville, FL is one of only 12 cities (and the smallest city) to ever host the NFL's big game. This year's Super Bowl campaign saw the most extensive marketing plan ever designed to capitalize on economic development opportunities for the host. The Super Bowl was and will continue to be a major economic boost for Jacksonville, FL. Beyond game-week spending, there's a longer-term impact. "We are more methodical because we've never had it," says Jacksonville Mayor John Peyton. "This is a tipping point for the city."
If you are considering an expansion or relocation to an urban center, consider taking an extra look at cities with a significant involvement in major sporting events. These communities have more than likely spent a lot of money getting the infrastructure in place to attract sports franchises and events-improvements that will benefit your business. It is beneficial to area businesses when streets have been repaired, mass transportation is beefed up, and hotels have been added to the immediate area. Conferences and clients are easier to attract once a city is organized and able to handle an influx of short-term visitors. Also, since entertaining the client is important to a lot of business executives, having the option of treating a guest to world-class sporting entertainment can be rewarding. Successful sports development projects have generated substantial economic development activity. Facilities and franchises are enhancing many regions' ability to attract new business and create jobs because they generate substantial economic impact during construction and operation. And for planners with large meetings, city stadiums provide a variety of options for creative events.
Sixty-five percent of the people who attend the Super Bowl are key decision-makers in their companies, according to the Jacksonville Super Bowl XXXIX Host Committee. While the figure for regular season games is substantially lower, the number of business relocation prospects has doubled since the Jaguars came to Jacksonville 10 years ago. "As a host city, we have a unique opportunity to show these businesses considering corporate relocation or expansion, as well as media and the travel and tourism industry, that Jacksonville is a great place to work and live year-round," says Jerry Mallot, executive director of cornerstone, which handles economic development for Jacksonville. "The team creates publicity," adds Mallot. "We get on the short list now."
While it may be prestigious to have your business located in a city associated with major sports, no site selector puts sports at the top of his or her list of location factors. "From the site selector's standpoint some [cities] have, through sports, gained an enhanced perception," says Mallot. "It makes it easier for that person to appreciate and give more credence and confidence to the city. Sports does not by any means make a decision on whether they are going to do a project or not, but what it does do is gain consideration for a community. The community still has to compete on the real key elements on why the decision is made."
Corporate Community
When it comes to attracting a major sports franchise or event, a city will turn its attention to doing the necessary development to improve its image. The changes Jacksonville has made are making a difference in the lives of residents and businesses well after the game ended. At least $60 million has been invested to improve ALLTEL Stadium. Over $5 million has been spent on improving transportation infrastructure. The city has widened highways and major arteries, resurfaced 1,445 miles of road, and built new sidewalks to make it easier to get around. Large business sites are opening throughout the region to attract new companies and accommodate future growth. For example, the city is building the largest industrial site in Florida at Cecil Commerce Center, complete with a two-mile-long runway and five square miles of development area.
Fortune 500 companies including Fidelity National, CSX transportation, Winn-Dixie Grocery, and dozens of major employers have located their headquarters or operating divisions in Jacksonville. The city is also the state headquarters for Bank of America. Jacksonville has not experienced the rapid growth the rest of Florida has experienced, but it has had steady growth due to its diversified economy-including a military presence. "Super Bowl is a great catalyst for celebrating what Jacksonville has to offer and showing that to the world," says Mayor Peyton. Peyton and others in the community are not expecting companies to relocate to Jacksonville overnight, but it is "now in a realm of possibility," he says.
Economic developers believe that sports strengthen a city's national and regional image-both to television viewers and to those who attend sporting events in person. Conventional wisdom among sports financing proponents is that a better, higher-profile image (which can be cultivated through hosting sports franchises and events) attracts more tourists, businesses, and residents, and expands the tax base to boot.
Those cities that have a major national sports team typically get some return on their investment, getting in return more than what they put into it. Those cities that lose a franchise often pay a dear price in image. For the Super Bowl in particular, there is a lasting image legacy for the host city-in Jacksonville's case, the city has now made it to the big leagues.
The estimated economic impact of the Super Bowl is $366 million, according to a 2003 study by Marketing Information Masters. There are 800,000,000 viewers in 229 countries-which is why a 30-second TV spot on CBS went for $2.5 million this year. With a fiscal impact on the host state of $12 to $27 million, average tax revenue comes to $19.5 million.
A modern Super Bowl brings in roughly 100,000 visitors to a region. A city must meet certain minimum criteria in order to host the game: size of the stadium, number of hotel rooms, and mean temperature at game time (for outdoor stadiums) for instance. Also considered is whether the city is capable of covering all the expenses that go along with hosting a Super Bowl. In a sense, choosing a location for the Super Bowl is a decision similar to the one you face with your own company.
Sports Can Spur Development
"There are intangible aspects of this marketing opportunity," says Michael Kelly, President and COO, Super Bowl Host Committee. The economic impact of the Super Bowl for Jacksonville may be difficult to analyze in some respects. Unlike nine-time host New Orleans, in which most of the incoming money related to the Super Bowl was spent directly in the city, a significant amount of money this year found its way out of Jacksonville to the outer-lying communities. "It's the nature of our infrastructure," says Kelly. "Jacksonville will still be the big winner in terms of economic impact. It will get the most immediate impact. The other towns will see a little bit of the impact as well."
Jacksonville is growing faster than any city in the Southeastern U.S. Site selectors probably would not have thought of Jacksonville nearly as often before 1993, when the Jaguars NFL franchise came to town. "We are now at the top of the radar screen," says Wayne Weaver, owner of the Jacksonville Jaguars. Weaver, former president and CEO of Nine West, is also Chairman of Shoe Carnival, Inc., based in Evansville, IN, and Chairman and CEO of Liz Claiborne Shoes, which is headquartered in Jacksonville.
Weaver says that Jacksonville having been on Monday Night Football and other national media outlets has certainly gotten the city much-needed publicity. Weaver also says that though the football franchise alone doesn't deserve all the credit for the city's raised profile, "[The Jaguars] are the biggest economic engine for this city. And most business people will tell you that."
Sports Scores In Indianapolis
About 30 years ago, public and private leaders in Indianapolis, IN formulated a plan to use sports as an economic development tool. They stepped up to the line and did some hard work. Today Indianapolis, the urban center of a multi-county region, has a vibrant, thriving downtown thanks in no small part to the vision of those community and business leaders more than a quarter century ago.
Since 1979, Indianapolis has hosted more than 400 national and international amateur sporting events with a cumulative economic impact in excess of $2 billion. In addition, three professional sports venues built since 1984 have become the centerpieces of a revitalized downtown, adding hundreds of millions of dollars each year to the local economy.
The effort began with construction of the $7 million Indianapolis Tennis Center in 1979. The center is home each summer to the RCA championships, chosen by professional tennis players as "Tournament of the Year" for 10 consecutive years, 1988 to 1997, and again in 2001. In 1982, the Indiana University Michael A. Carroll Track & Soccer Stadium and the Indiana University Natatorium opened at costs of $5.9 million and $21.5 million, respectively. The Carroll Track hosted the U.S. Olympic trials in 1988 and the USA Outdoor Track & Field Championships in 1997. The natatorium swimming and diving facility has hosted 14 NCAA Championships and 11 major U.S. Olympic Trials. In 2000, the Natatorium was the site of the U.S. Olympic Team Trials for Swimming for the fourth time.
Following the completion of the track and swimming venues, in 1982 Indianapolis hosted its first major amateur sporting event, the National Sports Festival (now called the U.S. Olympic Festival), which set the stage for a watershed event five years later-the Pan American Games.
"Hosting the National Sports Festival helped us get the bid for the Pan Am Games," says Jeb Conrad, executive director of Indianapolis Economic Development, a not-for-profit organization that works to bring new businesses and jobs to the city.
The Pan American Games in 1987 brought nearly 4,500 athletes from 38 countries to Indianapolis. The Games are the second largest multi-sport event in the world next to the Olympic Games. The Pan American Games put Indianapolis in the international sports spotlight and galvanized the community behind the notion of sports as prosperity-more than 37,000 volunteers turned out for the event.
In 1984, construction wrapped up on the RCA Dome at a cost of $77.5 million and the NFL's Indianapolis Colts moved to town from Baltimore, MD, giving Indianapolis a second high-profile sports franchise (the first being the NBA's Indiana Pacers). The city of Indianapolis plans to build a new stadium for the Colts by 2008 with an eye toward hosting the Super Bowl and, by 2010, expand the nearby Indiana Convention Center onto ground now occupied by the RCA Dome.
In 1996, Victory Field opened as the new home of the Indianapolis Indians, the city's Triple-A baseball franchise since 1902. Immediately, park attendance nearly doubled to 600,000 fans per season for the first five full seasons. Fans and observers praised the $18 million "retro" style ballpark. In 2001, Sports Illustrated named Victory Field, "the best minor league ballpark in America," and that year Indianapolis hosted the 14th Annual Triple-A All Star Game, which was televised on ESPN2.
Finally, in 1999, work was finished on Conseco Fieldhouse, a $183 million facility that serves as the home of the Pacers and a venue for music concerts and other large events. With that project, the triad was complete. All three sports facilities-the RCA Dome, Victory Field, and Conseco fieldhouse-are virtually within sight of each other downtown.
"It's one of the best sports downtowns anywhere in America," said NBC sportscaster Bob Costas in March 2000. "I mean, you've got the Colts ballpark right there, the new arena for the Pacers is there, and Victory Field all within walking distance. I don't know of any other town in America where you can literally stroll from one to another."
Besides Conseco Fieldhouse, something else happened in 1999 that had an enormous impact on sports economic development in the city-the NCAA moved its headquarters and Hall of Champions museum to White River State Park near the heart of downtown Indianapolis. The lease agreement with the city runs through 2039 with three 10-year options extending through 2069. As part of the deal, the NCAA designated Indianapolis as the permanent backup site for NCAA Final Four college basketball championships, should the primary host city be unable to hold the event.
That is, when Indianapolis is not hosting the Final Four itself. The city is scheduled to host the Women's Final Four in 2005 and the Men's Final Four in 2006 and 2010. The agreement with the NCAA calls for the city to host a Final Four, the First/Second Rounds of the Division I Men's and Women's Championship Games or Regional Games, and the NCAA Annual Convention at least once every five years for the life of the NCAA's lease on its Indianapolis headquarters.
The agreement helped address several of the NCAA's needs; the most important of which was to have a back-up site available for larger events. "The fact that our staff is here, the quality of Central Indiana's venues…made this the logical place," said NCAA President Myles Brand when he announced the agreement with Indianapolis in February 2004.
An economic impact study in 2003 by KPMG LLP found that the presence of the NCAA's headquarters alone generated nearly $64 million annually and created 857 new jobs for the city. The study also found that the NCAA saved $4 million each year by moving its headquarters to Indianapolis.
Historically, of course, the city has long been known for the Indianapolis 500, arguably the most famous motorsports racing event in the world. Built in 1909, the Indianapolis Motor Speedway (IMS) in recent years has become the home of two other well-known races, the Brickyard 400, a NASCAR Nextel Cup Series race, and the U.S. Grand Prix, the only Formula One race held in the United States.
The three racing events together bring in more than $700 million each year into the Indianapolis economy, according to the IMS. And now economic development leaders are turning their attention to the business aspect of motorsports and intend to grow this exciting, newly defined economic cluster.
A study completed in 2004 for The Indy Partnership, a private economic development group that works to bring new businesses and jobs to the Indianapolis region, found that the economic impact of motorsports in the region extends far beyond the races themselves. The underlying motorsports industry-the companies and small shops that manufacture components of the race cars, the racing teams, testing facilities, and other entities-employs at least 8,800 workers in the region and generates more than $425 million each year in wages alone.
The study also noted that those employment and wage figures are conservative estimates and that the motorsports industry has significant growth potential.
"[The] study validates what many economic development professionals in the Indianapolis region have long believed-the motorsports industry is a big part of our local economy and is an economic cluster well worth developing," says Greg Schenkel, President and CEO of The Indy Partnership.
Newly elected Indiana Governor Mitch Daniels has named an executive director for motorsports development, and The Indy Partnership has been working with state and local officials, the city of Indianapolis, educators at Purdue University and Marian College, and the IMS to create a coordinated plan to grow the region's already substantial motorsports industry.
Amateur and professional sports have truly scored for the Indianapolis region, and will continue to provide job growth and income to the local economy because business and government leaders a generation ago-and those today-realized that simply put, what's good for sports is good for business.
"The more successful [the events] are, the more successful the community is," says Ron Greene, director of public relations for the IMS.
It seems with the excitement of a game, the entire town gets an energy which sparks talk and later, action. Some believe sports facilities lead to community pride and solidarity. Greene says that a city rich in sports heritage is beneficial to its businesses because it offers employees the chance to see world-class sporting events. It gives companies opportunities to entertain in unique settings.
"The strongest attraction [for companies] is the people," says Greene. "Having a lot of volunteers [at city sporting events] sends a message to companies that they are moving to a city with a strong community." Indianapolis is unique in that it relies on volunteers at its three main racing events.
One of the significant benefits of sports facility development is the new money generated from major special events. NCAA basketball championship Final Fours now generate over $50 million in direct economic impact per event as they continue to be played in large domed facilities like those in Minneapolis, Atlanta, St. Louis, Indianapolis, and St. Petersburg, FL.
"Sports help portray a vitality, a dynamic, certainly a status," says Bill Benner, vice president of communication for the Indiana Sports corporation. "Indianapolis is much better perceived as a city because it has the Colts and the Pacers. It has a better reputation among cities. We can attract the Final Fours, World Championships in track and field and gymnastics. In the same way the city competes for sports, it competes for business.
"We don't have mountains or a beach, so we look for unique ways to set ourselves apart," adds Benner. Referring to the Colts, Benner says "We have gained some business along the way because sports were a component on the menu of opportunities. It's just the distinction of being an NFL city."
Pros And Cons
Some say that before San Diego got its first Super Bowl 1988, it just wasn't the San Diego it is today. The notoriety of the big game spurred a lot of economic development that other cities were and are jealous of; for example, San Diego's success with PETCO Park is used as a positive example in the argument currently being made for a West Side stadium in New York City. There, city leaders use the argument that a stadium is not just about a ballgame (the stadium would host the NFL's Jets team).
New York City is still weighing the pros and cons of building this new arena in what some call an already overdeveloped area. After all, direct expenditures on the part of a city benefit the local economy only when they cause an increase in spending in the area by people from outside the area, cause local residents to spend money locally rather than elsewhere, or generate re-spending that is new to the community. Public officials often believe that revenues generated from a new stadium will spill outside the venue into the surrounding neighborhoods, and increase economic activities in other parts of the city-making a new stadium a worthwhile public investment.
The effects of a new sports facility are extremely hard to estimate due to the intricacy of the task, flawed methodology, and inflated expectations of those administering a sports development project. This often results in impact studies that are overly optimistic. New stadium technology, such as the auctioning off of the stadium's name to a private client, increased in-stadium advertising, and more concessions have made a greater private contribution to sports financing possible.
The opening of PETCO Park in 2004 indicated the first stage of the larger infrastructure development surrounding San Diego's downtown Gaslamp Quarter. The city provided $143.8 million of the $294.1 million cost of the stadium itself. The Centre City development corporation invested $60 million for land and infrastructure, coordinating the transformation of a 26-block section of the city's most blighted area. Area land values have soared from $35 to $200 per square foot. Economists project $3 billion in development by 2020 in the surrounding 100-block East Village.
"The goals of redevelopment agencies [are not] the same goals as a sports team," says Peter Hall, president of the Centre City development corporation. "Site selectors are seeking a fairly well established, no risk location. The goal of redevelopment is to initiate a catalyst of change. The sports franchise and redevelopment folks have to agree that it's more than a sports venue-it's a means to an end."
Many community leaders believe that sports teams and facilities provide intangible benefits such as image enhancement and community pride. Sports teams also provide valuable consumption benefits to a local community. These benefits include the chance for local residents to follow and enjoy a home team, an increase in community spirit, and a potential means to draw people to downtown areas.
"We have taken the San Diego downtrodden area and are making it the hottest area in the region," says Hall. "We ask ourselves, are these proper economic development tools, are they beneficial? For us, yes." The value of putting $300 million into the immediate nine-block area of the ballpark's footprint is now four times that, says Hall. "It's been not just a homerun, but a grand slam."
These types of entertainment facilities are controversial and complex. Execution requires considerable support from business, political, and civic leadership. But once these facilities are developed, they can provide substantial economic and psychological benefits for the entire region for years to come.
Your employees can take advantage of the increasing number of world-class venues. A new stadium or sports entity is as valuable to quality of life as other local consumption activities, such as concert halls, zoos, parks, and golf courses. These facilities can be viewed as components of long-term regional infrastructure development, more than just vehicles to satisfy the needs of professional sports teams.
See this related press release for evidence of the impact of the Super Bowl.