California Assemblyman Mike Davis recently held a hearing of the California State Assembly Committee on Arts, Entertainment, Sports, Tourism, and Internet Media to discuss, “The Impact of Professional Sports Stadium and Arena Facilities on Local Economies.”
“We are here not only to discuss the impact that sports has on the local economy, we are here to also to continue the dialogue of the possibility of the National Football League coming back to Los Angeles,” said Assemblyman Davis.”
Davis led a panel that consisted of: California State Board of Equalization Vice Chair Jerome Horton; Economic Research Associates Senior Associate Jeff Cohen; Anschutz Entertainment Group (AEG) Executive Vice-President Ted Tanner; Los Angeles Sports Council David Simon; and Los Angeles Coliseum Commission General Manager and Chief Administrative Officer Patrick Lynch.
The body, who took questions from various community representatives, stressed that having professional sports teams is beneficial to the economy of Los Angeles and its surrounding areas because it would bring employment and business opportunities.
“Should an NFL team return to this area,” Davis said, “that could provide employment opportunities for those living in the area where the stadium is located. That is good for the economy and good for the surrounding businesses in that area, definitely on the day of the game.
“Our top priority is to strongly support the business of sports in the state of California. It is important for citizens to hear the plans and understand the financial impact of new athletic facilities. These projects will provide jobs as well as entertainment,” noted Davis.
In to a recent Economic Impact of Sports study, the Los Angeles Sports Council and the Los Angeles Chamber of Commerce said that the sporting events industry in Southern California had more than $4.2 billion total economic impact on the Los Angeles/Orange County area last year.
But according to the study, this is an 18 percent drop in revenue generated by sports compared to the previous study two years ago. In addition, the study shows that sporting events had a combined attendance of 20.8 million people in 2009.
“Like most other industries,” explained Los Angeles Sports Council Chairman Alan Rothenberg, “Sports have seen their revenue and attendance impacted by the economy. However, this study shows that even as people are making tough decisions about where to spend their money, they are still invested in the sports industry.”
The study measured the total financial effect of the sports events industry in Los Angeles, Orange, Riverside and San Bernardino counties. Using data obtained confidentially from 55 local sports organizations (excluding high school sports and certain special one-time events), the report authors compiled and evaluated aggregate annual revenue, employment, and attendance figures for the 2009 calendar year.
The survey included professional franchises, sports venues, horse racing tracks, major colleges and universities, as well as annual recurring events such as the L.A. Marathon, the Long Beach Grand Prix, and the Rose Bowl.
Further, Cohen emphasized that a new stadium and NFL franchise in Los Angeles would open up other means of income for the city. “Sports-driven revenues from visitors’ travel expenditures (i.e., hotels, restaurants, and car rentals), retail merchandising, secondary ticket sales, and merchandise manufacturing are all elements that we have not had in our city on a regular basis in the fall since 1994 (when the Raiders and Rams left for Oakland and St. Louis, respectively).”
Additionally, with an NFL franchise in Los Angeles/Orange County, the Southland would be eligible to host Super Bowls. That has been a huge, two-week economic bonus for host cities over the years.
In spite of the declines found in the 2009 study, the local professional and college teams and more than a dozen large-scale annual sporting events continue not only to be a source of rooting interest and pride, but they are also an important catalyst for the city’s economy. “As our region continues on the path of economic recovery,” Tanner said, “sports will certainly play a key role in ensuring our long-term prosperity.”
The Sports Council’s Simon views sports as a great source of energy for the Southland financially and a sense of civic pride. “Even in these tough economic times, sports have continued to be a major contributor to the economy of the Los Angeles/Orange County area. And while we can quantify the economic impact of this industry, we cannot quantify the psychological impact of sports on the people of Los Angeles. Sports goes beyond dollars and cents because of its ability to be a rallying point for the community.”