Report challenges economic benefit argument for major sporting and cultural events

A new report from the What Works Centre for Local Economic Growth challenges the idea that major sporting and cultural events and facilities bring long-term economic benefit to their localities through wages and jobs.

The impact evaluation and evidence review – Sports and Culture: The Impact of Major Events and Facilities –considered 36 post-event evaluations from across the UK and other OECD nations, and assessed the local economic impacts of staging major events on employment, wages and property prices. While acknowledging the many other intrinsic benefits and motivations behind hosting such events – including health, wellbeing, prestige and cultural enrichment – the review found very limited evidence to justify claims of stimulating local economic growth.

“Longer-term economic benefits are an increasingly cited reason for hosting major sporting and cultural events and facilities. And yet, it appears that in many instances, there is no empirical basis for these particular claims,” said Professor Henry Overman, Director of the What Works Centre for Local Economic Growth.

Key findings:

• The overall effects of staging major sporting or cultural events on the wider local economy are unlikely to be large, and are often negligible. Any impacts on wages were found to be generally small, and limited to the immediate area. 
• Facilities constructed for events are more likely to produce economic benefits than the events themselves, likely due to their longevity and their potential to be repurposed, although their impacts tend to be highly localised and felt most strongly on property prices in the immediate surrounds. 
• Any increases in trade imports and exports, such as a tourism, which may occur as a result of such events, tend to be short-lived.
• A further key finding of this review was the paucity of existing impact evaluations. In particular, smaller and cultural projects were underrepresented in the evaluations, meaning the findings are most applicable to major sporting events. There is also a lack of evaluations addressing recurring festivals and events, or exploring the potential of events to encourage net increases in long-term visitor numbers to a particular area,” said Professor Overman.

“Regardless, the evidence we have reviewed demonstrates the importance of having realistic expectations of what sporting and cultural projects can achieve in terms of longer term economic growth. This should encourage leaders to focus directly on the financial viability of the project itself as well as the many other benefits of such events in the public realm. It also raises interesting questions about who should pay for these projects.”