Hoop dream: Big economic impact

March 26, 2009
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msufansToday starts a big four-day weekend for Indianapolis. Given the sports-business strategy this city is built on and the soft economy, this weekend dotted with NCAA and high school state championship basketball events has more relevance than most in recent years.

Not only is the economic impact crucial for area businesses, but taxes from tickets, hotel rooms, restaurants and other spending linked to the games goes toward paying for the two venues-Conseco Fieldhouse and Lucas Oil Stadium-which have become the center of so much controversy surrounding the Capital Improvement Board.

Already stung by down attendance at the men’s Big Ten tournament, not to mention Indiana Pacers games, downtown is counting on a score from the boy’s high school state finals and the first NCAA men’s regional round the city has hosted since 1979.

The NCAA games will be played Friday and Sunday, but the teams and fans are already arriving. Lucas Oil Stadium is hosting open team practices today. The four boys high school games are sandwiched between NCAA games on Saturday.

The high school finals played at Conseco Fieldhouse have steadily drawn between 30,000 and 34,000 downtown for the two Saturday sessions during the last five years. Many local high school hoops fans decried the fact that no Indianapolis team made the finals. This could actually benefit downtown businesses. Out-of-town visitors are more likely to spend the night in a hotel or eat a meal or two at a restaurant. The high school games could also get an attendance bump from traveling NCAA basketball fans looking for something to do Saturday.

If 32,000 show up for the high school games, that should bring $2 million in direct visitor spending. It wouldn’t be without reason that visitor spending could swell to $3 million. Not bad for a single day during a sluggish economy.

The NCAA games are a much bigger prize. Already, more than 25,000 tickets have been sold. With three of the four teams here coming from the Midwest, that could easily eclipse 30,000. The folks at the Indiana Sports Corp. are being conservative in their expectations, but if Michigan State and Kansas fans travel in the numbers they normally do, and Louisville fans make the trip in droves up Interstate 65, it’s not out of the question that ticket sales could swell to 35,000. Lucas Oil Stadium is configured to seat 40,000.

What’s difficult to predict is how many fans whose team lost in Friday’s games will unload tickets for the final at a cutthroat price. That will certainly hurt this city’s economic impact. Even so, you can bet that many fans traveling in for all or part of this four-day event will spend at least one night in a hotel and eat multiple meals and probably even swill a few beers downtown.

Granted, some of the people buying tickets will be hoops fans from central Indiana. But most will be out-of-towners. If you figure conservatively that each person traveling to Indy will spend $300 here, direct visitor spending of $9 million for the NCAA games is within reasonable reach.

Lots of folks like to talk about economic impact. That number is figured based on multiples of visitor spending. Economic impact takes into account, for instance, that a hotel worker who works more hours and gets more tips will spend money at area stores and restaurants, etc. and so on. So if you like an economic impact figure for this weekend of basketball, I’m predicting a number near $30 million. Either way you slice it, it’s not bad for a medium-sized Midwest market in a sickened economy.
  • Thank you Anthony for calling attention to the incredible economic
    impact sports has had and will continue to have in Indianapolis. As you
    said, major amateur sporting events, like the NCAA Midwest Regional,
    translate into many, many jobs for Hoosiers. And that's especially
    important during these difficult economic times.

    But equally important, all of the major sporting events brought to this
    city and state by the Indiana Sports Corp. for the past 30 years have
    created a positive and valuable brand for Indianapolis -- a brand as an
    amateur sports capital and a brand that many other U.S. cities are
    trying to emulate and capture.

    We are fortunate to have a 30-year head start. Indianapolis has a solid
    reputation for having the best volunteers and sporting-event organizers
    in the nation. And we have a reputation for supporting our sporting
    events, as evidenced by the crowds that poured into downtown
    Indianapolis over the weekend. The attendance at the NCAA Midwest Regional was the fourth-largest in NCAA history for a two-session Regional.

    While the Federal government grapples with creating a trillion dollar
    stimulus package, I'm thankful that Indianapolis had the forethought to
    create a home-grown Hoosier stimulus package through sports. It works!

    Joseph DeGroff
    Partner, Ice Miller LLP
    Chairman of the Board, Indiana Sports Corp.
  • This does offer some proof that the investment of Lucas Oil Stadium is in fact worth it. When you start talking about $10 million in visitor spending here and $10 million there, and a Final Four and Super Bowl on the horizon not to mention all the convention traffic coming, the $20 million more needed to fund operations at the facility, start to look a little more palpable.

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  1. By Mr. Lee's own admission, he basically ran pro-bono ads on the billboard. Paying advertisers didn't want ads on a controversial, ugly billboard that turned off customers. At least one of Mr. Lee's free advertisers dropped out early because they found that Mr. Lee's advertising was having negative impact. So Mr. Lee is disingenous to say the city now owes him for lost revenue. Mr. Lee quickly realized his monstrosity had a dim future and is trying to get the city to bail him out. And that's why the billboard came down so quickly.

  2. Merchants Square is back. The small strip center to the south of 116th is 100% leased, McAlister’s is doing well in the outlot building. The former O’Charleys is leased but is going through permitting with the State and the town of Carmel. Mac Grill is closing all of their Indy locations (not just Merchants) and this will allow for a new restaurant concept to backfill both of their locations. As for the north side of 116th a new dinner movie theater and brewery is under construction to fill most of the vacancy left by Hobby Lobby and Old Navy.

  3. Yes it does have an ethics commission which enforce the law which prohibits 12 specific items. google it

  4. Thanks for reading and replying. If you want to see the differentiation for research, speaking and consulting, check out the spreadsheet I linked to at the bottom of the post; it is broken out exactly that way. I can only include so much detail in a blog post before it becomes something other than a blog post.

  5. 1. There is no allegation of corruption, Marty, to imply otherwise if false. 2. Is the "State Rule" a law? I suspect not. 3. Is Mr. Woodruff obligated via an employment agreement (contractual obligation) to not work with the engineering firm? 4. In many states a right to earn a living will trump non-competes and other contractual obligations, does Mr. Woodruff's personal right to earn a living trump any contractual obligations that might or might not be out there. 5. Lawyers in state government routinely go work for law firms they were formally working with in their regulatory actions. You can see a steady stream to firms like B&D from state government. It would be interesting for IBJ to do a review of current lawyers and find out how their past decisions affected the law firms clients. Since there is a buffer between regulated company and the regulator working for a law firm technically is not in violation of ethics but you have to wonder if decisions were made in favor of certain firms and quid pro quo jobs resulted. Start with the DOI in this review. Very interesting.