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Big-league sports boost Phoenix economy

The Phoenix metro area boasts a team in all four big-league sports, making it one of only a dozen metropolitan areas that can make this claim. And, of course, ASU has a high-level athletic program that draws hundreds of thousands of fans every year. Taken together, the greater Phoenix area arguably has the most dynamic, year-round schedule of sports attractions in the nation. Participants in the first annual sports symposium hosted by the W. P. Carey School’s Sports Business Association talked about the ways sports industry contributes to the economy.

2014-05-01

You don't need a doctorate in economics to understand the impact and value of sports to the greater Phoenix area. All you have to do is check the numbers. The Valley of the Sun will host the Pro Bowl and the Super Bowl next year and, in 2016, will host the second post-BCS college football national title game. Based on past estimates, the economic impact of the Super Bowl and the college bowl alone will be several hundred million dollars. Baseball's spring training — half of Major League Baseball's teams train here — has been consistently estimated at $200 million-plus impact annually. The Cactus League has been drawing about 1.7 million fans, many from out of state, to games the past two years. The Valley boasts a team in all four big-league sports, making it one of only a dozen metropolitan areas that can make this claim. And, of course, ASU has a high-level athletic program that draws hundreds of thousands of fans every year. Taken together, the Greater Phoenix area arguably has the most dynamic, year-round schedule of sports attractions in the nation. But the value of sports in Arizona goes beyond the numbers. Participants in the first annual sports symposium hosted by the W. P. Carey School’s Sports Business Association talked about the additional factors that make athletics special.

A sense of place

When the Phoenix Suns enjoy a good season, they are often featured on nationally televised games, and viewers see “PHX” on their screens, pointed out panelist Andy Bagnato, a sports consultant. “There is a certain value to that: it's that idea that Phoenix is a major city — a destination,” he commented. “Think about all those shots on the late TNT game in the middle of the winter, where people are arriving at the Purple Palace in flip-flops for a Suns-Lakers game. There's a value to that for Phoenix that you can't always quantify.” Then there's the unquantifiable asset called having a good time. For example, the Phoenix Regional Sports Commission puts on the Grand Canyon State Games, a series of about 50 events for Arizona residents spread throughout the year. One of those events, a baton-twirling competition, took place recently at ASU. “I thought we'd get six or seven baton twirlers,” said Alan Young, the commission's new executive director and an ASU graduate. Instead, “There were over 300 little girls having the time of their lives. There are 50 sports just like that.” Sports may be particularly important for the Phoenix area in part because the Valley is home to only a few major corporations, panelists suggested. “In Phoenix, instead of maybe Fortune 500 companies, we have Fortune 500 (sports) events,” Bagnato said. And because few such corporations are headquartered here, “What happens ... is that the non-profit world has to pick up the slack for what a lot of those major corporations would have given back to a community,” Robin Milne, executive director of Phoenix Suns Charities, pointed out. “So .... among large metropolitan areas, we probably have the highest number of non-profits of any major city,” said Milne, an ASU graduate. And that's where sports organizations come in. They are among the best-known of all local companies who donate to charity. The Suns make more than $1 million in grants to non-profits. In addition, have adopted Central High School as a special project in which Suns' staffers encourage students to go onto college. And when the Yarnell Hill Fire disaster took place in June, 2013, the Arizona Diamondbacks were the highest profile group to deal with raising money for the families of the firefighters who lost their lives. “The Diamondbacks were amazing,” Milne said. “They mobilized immediately and raised tons of money. They responded in a fabulous way and made the whole state look amazing. Firefighters across the country were watching what was happening.” For Arizona, the idea that the sports world would be a significant force in charitable giving started in post-statehood days, said Michael Mokwa, a W. P. Carey professor and former longtime marketing department chairman and the panel's moderator. In the 1920s, professional golfers traveled from one city to the next, promoting their sport. In each new town they would promise to share generously with local charities. “That was the first example of giving back to your communities for the privilege of being in that community and developing partnerships,” Mokwa said. Today, the Waste Management Phoenix Open, for years known as the Phoenix Open, is the largest and best-attended professional golf tournament on the PGA tour. The Thunderbirds — a prominent civic organization in Phoenix — is active in organizing the event, using part of the proceeds to fund the Special Olympics in the city. Next came the Suns, who were born in 1968 and developed “a strong commitment to the general community,” Mokwa said. Other franchises picked up the baton as they integrated themselves into the Valley. Of course, the big events — and the big numbers of dollars they generate — remain the attention grabbers. The 2015 Super Bowl in Glendale will be the Valley's third. In 2009, the last time Arizona hosted, the big game the economic impact was estimated at about $500 million, said Mokwa who has been involved in the economic-impact studies of these events. As for the 2015 game, “I would say we will do at least that well,” Mokwa said. “I would be very surprised if we didn't.”

Super Bowl XLIX

The University of Phoenix Stadium in Glendale will host the Pro Bowl and the Super Bowl next year. It’s a chance to focus international attention on the Valley — an opportunity that the Super Bowl Host Committee plans to leverage. The committee is putting together a “visiting CEO program,” said panelist Devney Preuss, the senior director of the committee. “This is an opportunity to bring in 30 or 40 CEOs from around the world, who might be interested in relocating or at least expanding their business to the area,” she said. “It's our time-share pitch. Come in for three or four days .... let us take you to events and learn more about the region and why you should bring your business here.” In 2016, Glendale will be in the news again as the host for the college football national title game. It will be the eighth for the Valley that will decide who's No. 1 in the college game. According to studies carried out by W.P. Carey the economic impact of the 2006-07 bowl season — including the Insight Bowl (now the Buffalo Wild Wings Bowl), the Fiesta Bowl and the national title game between Ohio State and Florida — had a combined impact of $401 million, Bagnato said. In the 2010-11 bowl season, which took place in a down economy, the impact of the bowls (including the title game between Auburn and Oregon), had a combined impact of $354 million, Bagnato said. Add in the other Fiesta and Insight bowls between these years and the total estimated impact over the five-year span was $1 billion. The studies are based on out-of-state visitors only. “The [Arizona resident] buying a ticket in Glendale to go to the game does not count in the economic impact,” Bagnato said.

A shining attraction

How does the greater Phoenix area attract such events? It's not just the weather. The new light rail system (which wasn't complete for the last Super Bowl), Phoenix Sky Harbor International Airport's convenience and the still-gleaming stadium in Glendale were convincing, panelists suggested. “Sky Harbor Airport is an amazing asset,” Bagnato said, noting the people who pick the sites are frequent fliers. Phoenix is a hub for air travel.  “It's hard to fly into New Orleans; it's really hard to fly into Jacksonville and San Antonio,” Bagnato said, pointing to some of the Valley's competitors for the college title game. Bagnato, who worked on the successful bid for the 2016 college championship game, said the area offers other destinations that make a Super Bowl trip more than the game alone. “We can pitch events at Tempe Beach Park, the Civic Center downtown and Old Town Scottsdale,” he said. “The first two are linked by light rail, which we didn't have before. You can get massive numbers of people between these specific strategic places. The vision of people being stuck on freeways … that’s the usual negative perception of the Sunbelt. Phoenix has done a lot to battle that, and it’s a huge advantage.” On the downside, just because the Valley has had great success so far in attracting mega events doesn't guarantee much for the future.

What price fame and fun?

Attracting big sports events is an expensive business. This time, Super Bowl Host Committee raised $30 million from private sources. “Who knows what the number will be next time?” Devney said. Panelists hope that governmental bodies will find sources of funding. Other cities understand the economic value of these events, Bagnato said. And, if they can make the Super Bowl work in the middle of a New York winter, then cities like Phoenix will have to work harder to win them. “It's not just about sunshine anymore,” he said. — Artist rendering courtesy of Sun Devil Athletics

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