If the increase in direct spending in the local economy is exaggerated as a consequence of incorrectly estimating the increase in overall spending, multiplier analysis only compounds the estimation error. To reiterate, the alleged pyramid of economic benefit identified by some with spectator sports depends absolutely upon the assumption that spending on spectator sports represents an increase in spending overall. Spending will increase in the area of analysis to the extent that fans are attracted from beyond its borders. Clearly, spending in the State of Washington does not increase overall if the Mariners divert leisure spending from other parts of the State to Seattle. Furthermore, since the owners of the team and players are the primary beneficiaries of the stadium subsidy, careful attention must be paid to the extent to which that income is respent in the local economy.
Many players reside in places other than the city in which they play.
Therefore, a substantial amount of the leisure spending undertaken by local fans may leave the local economy as players repatriate their income back to their primary residences. Indeed, had the leisure spending on MLB been directed instead toward leisure firms that are more locally owned and operated, the local economy may well exhibit greater spending overall. Given the complex nature of financial leakages and inflows stimulated by the professional sports industry, performing a prospective, assumption-driven analysis of sports impact without filtering these estimates through past metropolitan experiences does not allow for any perspective on the projections articulated in an economic impact study. All rights reserved.