Written by: Conner Goodman
The Economic Impact of the World Series
Last Wednesday night 40 million people around the world were tuned in to Game 7 of the World Series. Chicago battled Cleveland on the biggest stage in baseball to win their first World Championship since 1908. Looking back at the game and all the hype around it, I found it appropriate to analyze the the economic impact of the world series and how much more revenue is made in not only , but in all professional sports when a team takes it all the way in there sport. Along with this I will be looking at how positive the effect of a World Championship truly is to the city that hosts it.
The first thing that comes to many people's minds when they think of how much money is made from the world series is generally tickets. People will pay thousands and thousands of dollars to spectate a game. This type of purchase can be looked at as normal good. Infact is is said that this year's world series average ask price for tickets was a staggering $7,397. That is more money than the average household has in income in more than 65 countries worldwide. Setting aside the tickets profit is made on things like hotel rooms, food, memorabilia, transportation etc. The increase of price on hotels in cleveland during the World Series increased on average of 300-400%, turning out to be straight up profit for all the hotels around town. Looking at all of these financial benefits for baseball you would probably assume that the city makes a fortune off of the world series, but some argue that the city hardly breaks even.
A city revolved around baseball is a city not focused on other economic incomes of the city. In an article written by Paul Sisolak he says “Businesses that don’t directly cater to the baseball crowd could actually lose money from a decline in business during the World Series. A few years ago, the New York Daily News reported that the Yankees/Phillies World Series face-off produced revenues averaging $40 to $110 million for New York City; however, some local merchants not capitalizing on baseball took it as a hit to their business.” Other sources state that traffic, lack of infrastructure and security are all things that bring down the amount of money made by the city. With this argument there is a counter argument. One can say the the amount of money lost by non baseball related companies is bad for the economy, but then it can be said that the amount made by baseball related companies overturns the amount lost. When 5 million people come to a city for a World Series Championship parade there will be such a vast amount of people that everybody everywhere will get their shot at catering to their target market of people in town. With this great event comes a great amount of people with people comes money and with money comes a positive economic impact.
Works Cited
"College.holycross.edu." A Fall Classic? Holy Cross, n.d. Web. 8 Nov. 2016.
Http://www.facebook.com/. "Economic Impact of World Series Win for Kansas City." KSHB. N.p., Jan.-Feb. 2015. Web. 08 Nov. 2016.
I found this very interesting especially because this years world series was between two teams that have won in 50 years plus. Also with baseball losing interest this world series intrigued many people. The parade in Chicago was one of the largest gatherings of people in history. Even without game 7 in Chicago the city still attracted millions of people by winning.
ReplyDeleteI found this article interesting in that I hadn't ever thought about the increase in profit for things like hotels due to sporting events. Not only do they maximize their profits by selling out, the demand is so high that they can raise their price by three or four times the normal price. This lead me to think about the potential of an increase in hotels in success sporting cities in the long run. If the city, say Cleveland, continues to have a team reach the finals almost annually (they had the Cavs and the Indians do so this year), then surely more hotels will enter the industry there.
ReplyDeleteI thought about the economic aspect of the World Series before I read your article, so to read your point of view and information you presented shed light on how I thought about it in a completely different way. Especially towards the end, when you explained that surrounding stores and places that have products around the stadium didn't have baseball orientated items for sale and their revenue decreased. I never realize just how influential the sport could be and how it could impact the amount of money a company can make as a whole, and more than just the day of the game or something. Reading the comments above raises an interesting question--What exactly is the jump in the average day for hotels around the city as opposed to hotels on and during game day.
ReplyDeleteThis really caught my attention through the economic profits seen throughout the city holding the World Series game. With Chicago hotel prices already through the roof, I can't even imagine how expensive a room was during the game! I would assume this though solely because I know during Lollapalooza, hotel prices go up if you do not book in advanced. I never thought about how local businesses not associated with baseball would lose profit throughout the week of the games. It also makes me think that even though there are millions of people on Michigan Avenue for the Cubs parade, would they even buy from venues surrounding the place? The lines could be insanely long and they might not even be focused on those venues.
ReplyDeleteThe impact that sports have on local cities is huge. Not only is there an impact for the cities like Chicago and Cleveland during the World Series, but there is an impact felt in cities like Green Bay whenever the Packers have a home game. The amount of revenue that is earned from those eight or more Sundays each season boots the profit for local places whether they are a restaurant or hotel. Additionally, due to the location of Green Bay, suppliers of goods/services reap the benefits of a major surplus as both supply and demand are majorly increased around the days that the Packers have a home game. This is just one example, but every city that has professional sports team sees the economic benefit that comes as a result of the team playing home games.
ReplyDeleteThe impact he world series has on its host cities is huge, bringing in huge amount of revenue for both teams, but all businesses within both cities. Prices of hotels went up due to there being a limited amount of rooms, yet a huge demand. No wonder the price of hotels rose over 300%, everyone want to see their favorite team play in the most important games of the year! People will pay anything to support their team, even if it means paying too much.
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