Sports Tourism Can't Save You

PLUS: Pima County, Arizona, moves to rein in secret deals.

Photo credit: Roderick Eime

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The state of Louisiana is going to spend $7 million to entice a LIV golf event, currently slated to occur in summer 2026, to New Orleans. LIV Golf is a professional golf circuit, launched in 2021, that competes with the PGA Tour. It’s owned by Saudi Arabia’s public investment fund, which holds nearly $1 trillion in assets. Of the $7 million, $5 million will go directly to LIV as a hosting fee.

If that sounds like a sub-optimal use of public money, well, it is — and that’s leaving aside the ugliness of directly subsidizing the Saudi regime with American tax dollars.

Louisiana Gov. Jeff Landry defended the subsidy as a way to get people to come to New Orleans in the hot, steamy, southern summer. “We wanted to try to get something in the city during the summertime,” Landry said. “We want New Orleans to be a city where people come January to December.” He also claimed the event would boost tourism from parts of the world that are perhaps less familiar with the charms of The Big Easy.

These are the typical justifications used by political leaders across the country to rationalize spending public dollars on private sports events, be it the Super Bowl, World Cup, NCAA tournament, NASCAR races, or many smaller events that still pull in serious taxpayer funding.

But all of this rhetoric is based on a big lie: Sports tourism doesn’t provide a meaningful boost to local economies, either in the form of one-off events such as those described above or via travel to see professional sports franchises, such as NBA or NFL teams. Despite the glowing headlines from pliant media and state tourism boards, travel for pro sports simply doesn’t justify the public dollars spent in its name.

In addition to the LIV event, Louisiana has budgeted taxpayer money this year for a U.S. Bowling Congress Tournament, an Ultimate Fighting Championship event, next year’s Southeastern Conference Gymnastics Championship, and the U.S. Gymnastics National Championships. In the past, it has used public money to woo Super Bowls and NCAA Final Fours.

And New Orleans and Louisiana are by no means unique. Leaders across the country crow about enticing pro and collegiate sporting events big and small using public dollars, and the outsized impact those events supposedly have on their local economies. Many states have some sort of fund, as Louisiana does, for drawing in major cultural events. Here, for instance, is a recent piece on Illinois’ efforts to woo and keep NASCAR.

And the propaganda employed to bolster that spending goes back decades: For instance, the Baltimore Orioles claimed in the 1950s that their relocation from St. Louis drove a spending influx to the city.

But as I explained in my book, all the independent research available shows that events such as the Super Bowl, World Cup, or NCAA tournaments do not provide a meaningful economic boost to the communities that host them. In fact, those localities can even see a drop in tourism, as major events crowd out other tourism that would have occurred anyway and scare people away who would have visited under normal circumstances.

And even if that didn’t happen, these type of events — though they look large on television! — are actually too small to affect a major metro area economy in a meaningful way. Even if we trust the upper bound of estimated economic impact for a major event such as the Super Bowl (which, to be clear, we should not), it amounts to a fraction of 1 percent of the annual GDP of the typical large metro area.

It’s not that the net impact of these sort of events is zero (which is what some critics allege folks like me think) or that some individual businesses don’t benefit from them: It’s that boosters blow their actual impact all out of proportion in order to extract public subsidies, and politicians use those bloated, false numbers to claim they’re helping the local economy when they’re really not.

For smaller sporting events, the impact numbers are even less impressive and even less worthy of public spending. For example, Louisiana officials estimate that the LIV event will pull in about 50,000 tourists and have an economic impact of about $40 million. If those numbers are taken at face value (which, again, they should not be) they equal about one-quarter of one percent of New Orleans’ total tourism last year, and about 0.05 percent of its GDP.

The event will effectively disappear into the wash. And the number of people who are going to see the LIV tournament and decide to subsequently visit New Orleans is going to be next to nothing, I’d wager.

In this instance, then, Louisiana taxpayers (most of whom do not live in or around New Orleans and will not attend the LIV event) will be purchasing a meaningless economic boost for the metro area, while helping a notorious regime bolster its image on the world stage and diversify its economy.

That is not a trade worth making, to me. And the way in which Landry is talking about New Orleans — as if its not worth visiting in the summer absent some sort of sporting spectacle — will quite possibly undermine any positive PR the city receives for hosting the event.

Even over the course of a long professional sports season, there’s little reason to believe any sort of meaningful tourism boost occurs. A recent study by economists J.C. Bradbury and Frank Stephenson, for example, examined the 2017 move of the Atlanta Braves from their stadium in Atlanta proper to Truist Park, located in the suburbs of Cobb County. While officials argued at the time that tourism would be juiced as a result, there wasn’t even a tourism-related blip:

At both the county and localized levels, the results indicate that Truist Park had no economically meaningful positive effects on the hotel market; thus, predictions that the ballpark’s relocation to Cobb County would generate 100,000 or even 300,000 additional room nights per year have proven to be grossly incorrect. In total, our findings are consistent with existing research that indicates devoting public funding to a sports venue in the hope of generating sufficient returns through increased economic activity from imported visitor spending is not a sound justification for taxpayer support.

That’s just one team in one place, but it fits within the wider world of research showing how little professional sports can bolster a local economy.

Again, it’s not that professional sports have no economic impact whatsoever or that there aren’t decent, non-monetary reasons for wanting to host major cultural events in a particular city. There’s simply no way that sports-related tourism is going to offset the often substantial sums dedicated to winning those events. In a just world, politicians would have to come up with some reality-based justification for their desire to blow public money on what are effectively sports-adjacent parties.

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UPDATE: I wrote recently about how Amazon attempted to use corrupt nondisclosure agreements to push through the approval of a new data center in Tucson, Arizona, but was defeated after significant community pushback. In the wake of that episode, Pima County, Arizona, which also played a part in the approval process, has put new restrictions on when and for how long those nondisclosure agreements can be in force.

The most promising reforms are 1) a requirement that full details of the project in question be available to the public 90 days before county supervisors vote on it, and 2) that certain details pertaining to public resources, such as water and power use, can not be classified as proprietary.

This is, as far as I know, the first jurisdiction to affirmatively reform its economic development nondisclosure process in the wake of a problematic deal. They didn’t go as far as I would, but this is still a very good step in the right direction and should be applauded.

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SIMPLY STATED: Here are links to a few stories that caught my eye this week.

• A bipartisan pair of Ohio state legislators want to more tightly regulate corporate entities that oversee utility submetering, which is the practice of divvying up a utility bill amongst residents of an apartment complex or mobile home park.

• In a similar vein, residents of a Tucson, Arizona, mobile home park, will receive refunds after Attorney General Kris Mayes found they’d been systematically overcharged for submetered water.

• Economic development subsidies have become an issue in South Dakota’s gubernatorial primary.

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— Pat Garofalo