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Sports Business

Local economy takes lumps with Colts failings

January 6, 2016
KEYWORDS Sports Business

The economic impact of professional sports has long been debated.

One thing most of us can probably agree on is that there won’t be more money spent in central Indiana this weekend because the Indianapolis Colts are not hosting a home playoff game—as they have done the last two years.

There will most certainly be less money spent. It’s only a question of how much less.

The NFL doesn’t put much out on the economic impact of individual playoff games and team estimates vary from $6 million to $20 million. Lots, of course, depends on the market those games are played in.

The Colts commissioned a study in 2004 that found a season of home games had a $150 million economic impact on Indianapolis. With eight regular season games and two preseason games, that would equate to a $15 million economic impact per home game.

There is a big difference between economic impact, which uses a multiplier effect, and direct visitor spending. While visitor spending for a Colts home playoff game is likely well below $15 million, it’s still probably a healthy seven-figure amount.

There is the argument that an NFL home playoff game doesn’t so much generate new spending as move spending around—namely from the suburbs and doughnut counties to downtown.

But that argument doesn’t entirely hold water. First, it’s clear that Colts fans come to Indianapolis for home games from as far as Fort Wayne and Evansville.

But we’ve also seen sizable groups come in from other states to see playoff games in Indianapolis. Colts fans might not like sitting next to rabid New York Jets or Kansas City Chiefs fans at Lucas Oil Stadium, but those fans are a big part of the real economic impact of an NFL playoff game here.

The dual migration helps sell out most if not all downtown hotels for each Colts home game. That’s nearly 8,000 rooms.

Hotels often sell out-of-town guests two-night packages—especially for the playoffs. In 2010, downtown hotels reported having 100 percent occupancy for the nights of two home playoff games and 85 percent occupancy for the night before each of those games.

The spending on hotels, meal and merchandise also scores the city and state added tax dollars—likely a low seven-figure sum for each home playoff game.

Certainly Colts Coach Chuck Pagano and the team’s general manager, Ryan Grigson, have lots of incentive to get back to the playoffs next year. But they’ll be far from the only beneficiaries if that goal is met.

This year, I guess we’ll have to rely on Star Wars to boost our economy.


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