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On November 2, Beijing time, the Kansas City Royals defeated the New York Mets 4-1 to win the 2015 MLB World Championship. . The entire city of Kansas City is celebrating and bustling with excitement. However, studies by sports economists year after year show that behind the gorgeous scenes and gorgeous statistics is an embarrassment - sports events are a way for the city government to lose money and make a fuss.
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Lanxiong Sports reporter Zhou Fengcun
Weibo: @ Lanxiong Sports
Website: www.lanxiongsports.com
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From an economic perspective, Jeff Pinkerton, a senior researcher at the Central American Regional Municipal Bureau, analyzed that each MLB playoff or finals event can bring 6 million to Kansas City. US dollars (approximately 38 million yuan) in revenue; the New York City Economic Development Department also pointed out that the Mets’ home games average revenue of 11.6 million per game.
Perhaps the media has convinced you to believe that both clubs have reasons to celebrate. However, according to a report by Bloomberg Businessweek, the ticket revenue and tourism revenue brought by the finals are undoubtedly profitable. But if this money is seen as a driver of urban development (providing jobs and growing the economy), the effect is arguably minimal.
6 million and $11.6 million sounds like a successful business, but when put into the context of the city's overall economy, it's fragile. Research results by sports economist David Berry show that in 2014, Kansas City's GDP was US$120 billion, while at the same time, the greater New York metropolitan area's annual GDP reached US$1.6 trillion. Calculated, two Royals games account for 0.0099% of the city's GDP, and three Mets games account for 0.0021% of the Mets' GDP.
▲ New York’s GDP trend from 2001 to 2014 (unit: billions of dollars)
Another sports economist Dennis Coates also has the same view. He wrote in his research on the NFL: "Between 1969 and 1977 , the winner of the Super Bowl can help the city's per capita income increase by $140 through peripheral products, but that's it. Sports events cannot help people improve their quality of life and income. "
What about tourism growth? Coates said: "An international metropolis like New York does not need the finals to stimulate tourism. No one comes to New York just to watch a Mets game. Even if there is, it is disproportionate to the overall number of tourists pouring into New York. .Also, maybe the event can have a greater impact on tourism in Kansas than New York, but these statistics still do not have a big impact.”
More importantly, people misunderstand the meaning of sports profits. "Kansas Business News" pointed out that sports events can increase the revenue of tickets, clothing factories, hotels, restaurants and bars, but this assumption is based on "the money is not spent if it is not spent on the game."
Sports is part of the entertainment industry. Most people don’t spend their money here, but on other entertainment projects. For some businessmen in sports-related industries, the finals have indeed made a lot of money, but from the perspective of the urban economy, this has no significant effect. Coates joked about this: "People buy jerseys and go out to restaurants because the team's performance is good. Obviously if they don't make the playoffs, people will not eat, drink or wear clothes?"
Another huge expense Often overlooked – the cost of running a competition. Increased security, traffic congestion, street closures, and post-game cleanup are all included in public expenses. The team will pay for the parade, but the city government is still responsible for the cost of security and cleaning.
also has unbudgeted expenses - according to ABC, the San Francisco Giants' championship parade in 2014 caused 3,500 students to skip class, causing a loss of $140,000 to the state.
That's not to say people shouldn't be proud of the team's victory, and the financial outlay won't overshadow the Kansas City Royals' victory. But winning trophies for a city doesn't drive economic growth as many people think, don't get the idea confused.
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