Good for the Team, Bad for the City

The unlikely appearance by Butler in the Final Four has raised questions over just how profitable the event will be for local merchants.  Surprisingly enough to outsiders, Indianapolis’s local economy is built on tourism.  Between the race, conventions, and sporting events, the city’s brain-trust came up with a plan about 30 years ago to make Indy a hub for tourism, and especially sports tourism.

Imagine for a moment that Butler knocks off Michigan State on Saturday night.  Most of the Butler fans will just drive home, whereas the MSU fans might have stayed the weekend in a hotel.  The mere fact that one of the teams is located in Indianapolis will automatically reduce the number of people traveling, staying in hotels, and eating out twice a day downtown.  Considering that one of the primary arguments for building the Luke was a long term agreement with the NCAA to host the Final Four, the city is counting on big money to flow to offset the admittedly exorbitant cost of the building.

Now, in the case of Butler, there’s a flip side.  This is tremendous publicity for the city as a whole.  This Final Four has become about Butler and about Indianapolis.  That’s incredible publicity and it would  be easy to argue that it could offset some of the financial losses felt by the Bulldogs playing at home.

There’s a bigger problem looming for the city, however.  Let’s assume for a moment that the 2012 Super Bowl actually gets played.  I know that the NFL’s labor crisis could scuttle everything the city has worked so hard for, but assuming cooler heads prevail, we all know that the Colts ought to be a viable contender to make the game.  That’s because they have been for a decade now and show no signs at all of slowing down.

The Super Bowl is a much bigger economic plum than the Final Four.  The impact of the Super Bowl is expected to be upwards of $200 million dollars compared with just a quarter of that for the Final Four.  Part of the reason in the disparity is that the Super Bowl is one of the world’s largest corporate events.  People come and stay for several days attending parties instead of just game day.  Because two of the teams go home on Saturday night, a high percentage of the visitors for the Final Four may not even stay one night in town.

So, having spent $700 million on a beautiful stadium, the city is counting on that $200 million to pump big money into the local coffers.  However, should the Colts be the first team to play a Super Bowl in their home stadium, the results could be catastrophic for the city’s economy.  First of all, ticket prices for the game would sky rocket.  Not only would demand be high from Colts’ fans, but because they wouldn’t have to spend any money for hotels and flights, fans would be able to pay far more for tickets than fans from other cities.  All that money would go to scalpers and ticket holders, most of whom live outside the area.

As much as I want to see the Colts play in a Super Bowl at the Luke, I have to admit that it would be disaster for the city.  Worse yet, if they happened to play a regional NFC team like the Bears, Lions, or Packers, the impact could be even worse.

I’m obviously not saying we should root against the Colts making the 2012 Super Bowl, but I’m saying we have to be careful what we wish for.  What’s best for the team could be what’s worst for the city.

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