Sports and Indy

Sports & Indy: Is it good teamwork? Events such as this weekend's Final Four bring estimated $1 billion to Indy, but not everyone thinks it's a bargain One billion dollars. That's how much major sports events and organizations might pull into Indianapolis this year. And that figure doesn't count money spent by Indianapolis-area fans or the added benefit as those dollars circulate through the local economy. It's The Indianapolis Star's tally, based on figures from eight economic studies and estimates from local tourism officials, of how much out-of-town visitors spend on such things as hotels and hot dogs, cab rides and courtside seats. It's roughly the same amount Eli Lilly and Co. pays its more than 14,000 Indianapolis employees. And it's a number that -- after 30 years of work -- affirms Indianapolis as one of the nation's elite sports cities. This weekend's NCAA Men's Final Four is the latest example. "That's real money," said Susan Williams, president of the Indiana Sports Corp., the nonprofit group that bid for and organized Indianapolis' hosting of the Final Four. "That number demonstrates what a market niche we have and demonstrates what the whole sports picture has become to our city's and our region's economy." Or does it? Not only do economists disagree on how beneficial Indianapolis' sports industry really is, but local officials also realize they have to keep pouring resources into sports to keep Indianapolis ahead of the ever-increasing pack of cities trying to duplicate its success. Right now, local leaders are trying to outbid Chicago to permanently host the men's and women's Big Ten Conference basketball tournament, as the city did this year. Indianapolis also might lose the lucrative U.S. Grand Prix Formula One race to Las Vegas. At the same time, local officials dream of landing a Super Bowl or part of the World Cup soccer tournament to keep the city's sports industry growing. In fact, city officials had their eye on a Super Bowl when they pushed to win tax increases to fund a $500 million football stadium for the Indianapolis Colts. Local taxpayers also footed the bill for part of the $183 million Conseco Fieldhouse, opened in 1999, and for part of the Colts' current stadium, the RCA Dome. Some sports economists question the wisdom of spending more money to attract ever-larger events. That's one reason many of the economic studies tallied by The Star were commissioned by sports organizations or the city, which had a clear interest in winning public support for expensive new sports facilities. No comprehensive study has been conducted to measure the overall impact of sports in Indianapolis. And at least one economist, Bruce Jaffee of Indiana University, said the sum total of the piecemeal studies seems inflated. Interestingly, Jaffee said that even if sports' impact on Indianapolis is half as much -- or $500 million a year -- it's a boon. Sports impact disputed But another economist, who did not question the $1 billion figure, doubts very much of it will actually thicken Hoosier wallets. "Undoubtedly, because of sports, $1 billion changes hands in Indianapolis (in a year)," said Victor Matheson, a professor of economics at the College of Holy Cross in Worcester, Mass. "The question is, 'Are the people in Indianapolis $1 billion richer because of that?' That's a completely different story." It's different for two reasons, Matheson explained. First, when big events such as the Final Four come to town, the hordes of sports fans crowd out people who otherwise would have visited the city for business or pleasure. Second, while Indianapolis' hotels and restaurants make a killing on the Final Four, it's unclear how much of those profits stay in Indianapolis. Out-of-state companies own many of the city's restaurants and hotels. Matheson and other sports economists cite an array of economic studies, which say jobs and earnings do not rise noticeably for cities that host major sporting events versus those that do not. "If this is success, I'd hate to see failure," said Robert Sandy, an economist at Indiana University-Purdue University Indianapolis. He said Indianapolis' tax dollars spent on sports could have been better spent on schools or other basic infrastructure. But city leaders say such criticism fails to account for other benefits sports bring to Indianapolis. Williams said Indianapolis gets incalculable exposure from hosting more than 1 million visitors a year for sports events and from being frequently mentioned in news media nationwide. Indeed, attracting direct spending from sports fans was just one of three parts of a deliberate sports strategy put in place 30 years ago by then-Mayor William Hudnut and a cadre of young civic leaders. Another goal was to use sports to vault Indianapolis onto the radar screens of corporate decision makers, said David Frick, who was a deputy mayor under Hudnut. Frick is now heading the building authority that is erecting the new stadium for the Colts and other uses. "Sports plays a critical role in the culture of business decision makers in the state -- where to locate plants, where to grow, where to make investments," Frick said. "Indianapolis is now on the list, where it never was before." Also, Hudnut and others wanted to lure the headquarters of various sports organizations. And the city has done so. Today, 11 sports governing bodies and groups call Indianapolis home. The biggest of these is the National Collegiate Athletic Association, which moved its headquarters to Indianapolis in 1999. Altogether, the 11 organizations pump $63 million annually into Indianapolis' economy in payroll and expenditures, according to analyses by the Kelley School of Business at Indiana University. A winning tradition Indianapolis also has managed a string of big wins in both professional and amateur sports. Beginning in 1977, Hudnut toiled to boost ticket sales and then to find a local buyer to keep the Indiana Pacers from moving out of town. The mall-owning Simon brothers bought the struggling team in 1983. By 1996, the Pacers were pumping $34.6 million a year into Indianapolis, according to a city-commissioned study. In 1980, Indianapolis hosted its first men's Final Four. Two years later, it hosted the National Sports Festival, where organizers first learned how to run a big event. In 1984, Hudnut, Frick and others persuaded the Baltimore Colts to move to Indianapolis. Twenty years later, the NFL team attracts $44 million a year in visitor spending into Indianapolis, according to a PricewaterhouseCoopers study. Indianapolis' biggest single event was the Pan American Games in 1987, which marshaled nearly 40,000 volunteers and showed off the many facilities the city had spent millions building -- for swimming, tennis, football, rowing and other sports. Since then, Indianapolis has hosted a slew of world championships, in swimming, diving, rowing, gymnastics, basketball and other sports. The biggest economic boosts, however, came not from the efforts of city leaders, but from the Indianapolis Motor Speedway expanding its franchise. IMS added the Brickyard 400 stock-car race in 1994 and the U.S. Grand Prix Formula One race in 2000. Combined, those two races bring in nearly $400 million annually to Indianapolis, according to a 2000 study commissioned by the Speedway. The Indianapolis 500 brings in $336 million on its own, the study said. The question now for sports advocates is how to keep growing. The Indiana Sports Corp., created in 1979 to promote amateur sports, was the first sports commission of its kind in the nation. Now, about 150 cities have similar organizations. Bidding for the crown jewel of sports tourism -- the Olympic Games -- has become so competitive it led to scandal before the Salt Lake City Winter Games in 2002 and led to major losses for Athens, Greece, which hosted the Summer Games in 2004. Indianapolis leaders don't plan to bid for the 2016 Summer Olympics. But they do recognize they need to attract new events to keep bringing in visitors and their dollars. "Just like Kings Island has to have a new ride every year or so, we need to have a new thing," said Fred Glass, president of the Capital Improvement Board, which owns Conseco Fieldhouse, the RCA Dome and the new Lucas Oil Stadium. Williams, of the Sports Corp., plans to keep leveraging the city's relationship with its hometown sports organizations. The NCAA has promised to bring a Final Four event here every five years. And Williams thinks there's a chance to organize sports championship festivals for other NCAA sports besides basketball. But whatever the strategy, Frick thinks more taxpayer dollars will have to be spent to keep Indianapolis in the lead pack of sports cities. "I'm not sure we as a community are spending the kind of resources we need," Frick said. "The public sector needs to step forward. And I think that's a good use of public dollars because this activity creates jobs." ECONOMIC IMPACT OF SPORTS IN INDY: A TALE OF THE TAPE Major sporting events and organizations could pull more than $1 billion into Indianapolis' economy this year, according to a tally of figures from various economic studies. The Indianapolis Star arrived at the figure by compiling data from eight economic studies and other sources. The figures relate to how much visiting fans -- not Indianapolis-area residents -- are expected to spend on such things as tickets, beds, grub, drinks, trinkets and transportation. Here is a list of the events and organizations and the visitor spending they are expected to draw. All data come from the most recent estimates available. Events • Feb. 23-28: NFL Combine, $2.5 million. • March 2-6: Big 10 Women's basketball tournament, $3.5 million. • March 4: IHSAA girls basketball championships, unknown. • March 9-12: Big 10 men's basketball tournament, $6.5 million. • March 10-12: Hoosier Midwest Qualifying volleyball tournament, $8 million. • March 25: IHSAA boys basketball championships, unknown. • April 1-3: NCAA men's Final Four, $33.3 million. • May 6: Indianapolis Life 500 Mini-Marathon, $1.2 million. • May 28: Indianapolis 500, $336.6 million. • June 16-18: Midwest Regional League soccer finals, $2 million. • June 22-25: USA Outdoor Track & Field Championships, $4.5 million. • July 2: U.S. Grand Prix, $170.8 million. • July 15-23: RCA Championships, $4.2 million. • July 19-23: U.S. Rowing National Championship Regatta, $500,000. • July 19-23: Circle City Equestrian 500, $1.6 million. • August 6: Allstate 400 at the Brickyard, $219.5 million. • Oct. 7: Coca-Cola Circle City Classic, $9 million. • Nov. 24-25: IHSAA football championships, unknown. • Dec. 16: John Wooden Tradition (November): $1.2 million. • Indianapolis Raceway Park events: $60 million. Total: $864,900,000 Miscellaneous • 10 amateur sports groups: $13 million annually in payroll and expenditures. • NCAA headquarters: $50 million annually in payroll and expenditures. Total: $63,000,000 Professional sports teams Note: It is difficult to determine how much local sports teams attract in spending from fans and businesses that are outside the Indianapolis area. The Pacers, Colts and Ice have all been part of economic impact studies, and those annual numbers are listed below. • Indianapolis Colts: $44 million in outside visitor spending. • Indiana Pacers: $35 million in payroll and expenditures • Indiana Ice: $5 million in payroll and expenditures. • Indiana Fever: unknown. • Indianapolis Indians: unknown. • Indiana Tornados: unknown. Total: $84,000,000 GRAND TOTAL: $1,011,900,000 Sources: Indiana Sports Corp., Indianapolis Convention & Visitors Association, Capital Improvement Board, individual organizations, Star research>