Final Four’s Economic Impact Questioned

An estimated 100,000 basketball fans flocked to Atlanta this weekend.

Mark Vaughan of the Atlanta Convention and Visitor’s Bureau says each dollar spent by fans has a ripple effect, ultimately adding up to the $70 million figure.

“It’s everything from hotels to restaurants, merchandise, limousines, taxis – there’s a lot of the multipliers that take place on a big event like this.” 

But Holy Cross economics professor Victor Matheson argues these types of estimates are usually exaggerated. He studies the local impact of major events like Finals Fours and Super Bowls.

“We look at things like GDP for the city, employment for the city, taxes collected during the month – any sort of data we can get our hands on and time and time again we just don’t see these big bumps that are being claimed.”

Matheson doesn’t doubt Atlanta benefited from hosting the Final Four, but he says the dollar amount is likely a fraction of what the city is claiming.

“Basically you’ve replaced your normal visitors with sports fans. If you don’t count out that crowding-out effect then you’re going to get a good estimate of the gross impact of an event.”

Plus, Matheson argues much of the spending this weekend was pocketed by the NCAA or hotels and other companies with corporate headquarters based outside Atlanta. 

Vaughan, however, stands by the $70 million figure, while touting the additional benefits.

“I don’t know if you can pinpoint a dollar amount of being the lead story on every newspaper and television/radio station in the country but there has to be some benefit that the world knew the Final Four was being held in Atlanta, Georgia and that speaks volumes.”

The dispute over the Final Four’s impact comes as the city moves forward with a new retractable-roof stadium partly funded by taxpayers. Mayor Kasim Reed has justified the use of public funds by promising the new stadium will help stimulate the local economy and attract more events like the Final Four.