San Francisco’s Mayor, Gavin Newsom has released a report commissioned by the City assessing the economic impacts of San Francisco hosting the 34th America’s Cup match. If the hyperbole in the opening line of the press statement is anything to go by – the maths is shaky already.
The statement opens with:
The America’s Cup is the world’s third-largest sporting competition, after the Olympics and soccer’s World Cup.
Of course it depends on how you define largest, but the statement doesn’t stand up to a lot of scrutiny. It’s certainly not the 3rd largest in terms of teams, competitors or countries competing, or number of spectators.
It is America though, and sports like Rugby don’t mean much to the population of San Francisco. For example, Deloitte estimates that the Rugby World Cup has the potential to generate up to £2.1 billion (yes that’s GBP) in economic benefits while capital expenditure costs are among the lowest for an event of such magnitude.
In a list of 200 valuable sporting properties compiled by Sports Pro Magazine, the America’s Cup comes in 71st based on the event in 2007, which most agree to be the best ever held.
But the value of the property and the economic impact are different things and an American venue has advantages of spectator and media access. If San Francisco gets it right, then the value to the City could be enormous. Just as Valencia used the America’s Cup to position itself as a city capable of hosting major events and securing an F1 Grand Prix as a result, San Francisco could use the America’s Cup to regenerate parts of the city and create jobs.
The headline numbers from the report released yesterday show that the economic impact of the America’s Cup could total $1.4 billion and create 8,840 jobs.
The report, titled The America’s Cup: Economic Impacts of a Match on San Francisco Bay, was prepared by The Bay Area Council Economic Institute (BACEI) and Beacon Economics.
The report found that the increase in overall economic activity in San Francisco hosting the 34th America’s Cup could be on the order of $1.4 billion, almost three times the estimated impact of hosting the Super Bowl ($300-$500 million). Additional taxes alone to the City’s General Fund are expected to net more than $13 million, based on more than $24 million in revenue, and an estimated $11 million in tourism related costs. The potential increase in employment surrounding the event could be on the order of 8,840 jobs.
Analysis of economic impacts from prior America’s Cups, specifically Valencia 2007 serves as starting point for this analysis. This analysis makes a number of assumptions: the infrastructure costs and spending will be several billion dollars less (Valencia built a massive marina and channel, hotels, transit etc); spectator attendance will be considerably larger (SF is already an established international destination and amphitheater allows for better viewing); the media’s presence will be larger (broadcasting the races is likely to be significantly more desirable for the international media); the presence of super yachts will be smaller (SF not a tradition super yacht destination due to weather and Pacific location).
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