The economic impact of major sports events:

a review of ten events in the UK

Chris Gratton, Simon Shibli, and Richard Coleman

Introduction

Over recent years there has been a marked contrast between the discussions
around the economic impact of major sports events in North America on the
one hand and most of the rest of the world on the other. In the USA the sports
strategies of cities in the USA have largely been based on infrastructure
(stadium) investment for professional team sports, in particular, American foot-
ball, baseball, basketball, and ice hockey. Over the last decade cities have offered
greater and greater incentives for these professional teams to move from their
existing host cities by offering to build a new stadium to house them. The teams
sit back and let the host and competing cities bid up the price. They either move
to the city offering the best deal or they accept the counter offer invariably put
to them by their existing hosts. This normally involves the host city building a
brand new stadium to replace the existing one which may only be ten or fifteen
years old. The result is that at the end of the 1990s there were thirty major
stadium construction projects in progress, around one-third of the total profes-
sional sports infrastructure, but over half of all professional teams in the USA
have expressed dissatisfaction with their current facilities.
Baade (2003) argues that since 1987 approximately 80 per cent of the pro-
fessional sports facilities in the United States will have been replaced or have
undergone major renovation with the new facilities costing more than $19 billion
in total, and the public providing $13.6 billion, or 71 per cent, of that amount.
The use of taxpayers money to subsidize profit-making professional sports
teams is justified on the basis that such investment of public money is a worth-
while investment since it is clearly outweighed by the stream of economic activ-
ity that is generated by having a professional sports team resident in the city.
Such justifications are often backed up by economic impact studies that show
that the spending of sports tourists in the host city more than justifies such a
public subsidy. Crompton (1995, 2001) has illustrated that such studies have
often been seriously methodologically flawed, and the real economic benefit of
such visitor spending is often well below that specified in such studies. This is

© The Editorial Board of the Sociological Review 2006. Published by Blackwell Publishing Ltd,
9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA
Chris Gratton, Simon Shibli, and Richard Coleman

particularly the case given the need for such huge infrastructure investment
needed to attract the professional teams.
In Europe, however, city sport strategies have concentrated more on attract-
ing a series of major sports events, such as World or European Championships,
again justified on the economic impact generated through hosting such events.
Whereas many American sports economists (eg, Baade, 1996; Noll &
Zimbalist, 1997; Coates & Humphreys, 1999) now consistently agree that studies
show no significant direct economic impact on the host cities from the recent
stadium developments, it is not so evident that European style hosting of major
sports events is not economically beneficial to the host cities. This chapter looks
at ten major sports events, all World or European Championships hosted by
UK cities over recent years, all of which have been studied by the current
authors. The difference from the North American situation is that these events
move around from city to city in response to bids from potential host cities and
in all ten cases did not require specific capital infrastructure investment to be
staged but rather were staged in existing facilities. Before we look at these events,
however, we briefly review the literature on the economic importance of major
sports events. The biggest by far of such events is the summer Olympic Games,
in particular in the infrastructure investment required to host the event, and the
next section is devoted just to that event before the literature relating to all other
major sports events is considered.

The economic importance of the summer Olympic Games

Despite the huge sums of money invested in hosting the summer Olympics, there
has never been an economic impact study of the type described in this paper to
assess the economic benefits of hosting the event. Kasimati (2003) summarized
the potential long-term benefits to a city of hosting the summer Olympics: newly
constructed event facilities and infrastructure, urban revival, enhanced inter-
national reputation, increased tourism, improved public welfare, additional
employment, and increased inward investment. In practice, however, there is also
a possible downside to hosting the event including: high construction costs of
sporting venues and related other investments, in particular in transport infra-
structure; temporary congestion problems; displacement of other tourists due
to the event; and underutilized elite sporting facilities after the event which are
of little use to the local population.
Kasimati (2003) analysed all impact studies of the summer Olympics from
1984 to 2004 and found, in each case, that the studies were done prior to the
Games, were not based on primary data, and were, in general, commissioned by
proponents of the Games. He found that the economic impacts were likely to
be inflated since the studies did not take into account supply-side constraints
such as investment crowding out, price increases due to resource scarcity, and
the displacement of tourists who would have been in the host city had the
Olympics not been held there. Although no proper economic impact study using

42 © The Editorial Board of the Sociological Review 2006

 The economic impact of major sports events

primary data has ever been carried out for the summer Olympics, Preuss (2004)
has produced a comprehensive analysis of the economics of the summer
Olympics for every summer Olympics from Munich 1972 using secondary data,
and employing a novel data transformation methodology which allows com-
parisons across the different Olympics.
Despite collecting a massive amount of secondary data, Preuss’s conclusion
on the estimation of the true economic impact of the summer Olympics is the
same as Kasimati’s: ‘The economic benefit of the Games . . . is often overesti-
mated in both publications and economic analyses produced by or for the
OCOG [Organizing Committee of the Olympic Games] . . . multipliers tend to
be too high and the number of tourists is estimated too optimistically’ (Preuss,
2004: 290). Preuss, however, does make some strong conclusions from his analy-
sis. He shows, for instance, that every summer Olympics since 1972 made an
operational surplus that the OCOG can spend to benefit both national and inter-
national sport. Popular stories in the mass media relating to massive losses from
hosting the Olympics have nothing to do with the Games’ operational costs and
revenues. Rather it is to do with the capital infrastructure investments made by
host cities on venues, transport, accommodation and telecommunications. These
are investments in capital infrastructure that have a life of possibly 50 years or
more and yet many commentators count the full capital cost against the two to
three weeks of the Games themselves. Preuss points out that in strict economic
terms this is nonsense:
it is impossible and even wrong to state the overall effect of different Olympics with
a single surplus or deficit. The true outcome is measured in the infrastructural, social,
political, ecological and sporting impacts a city and country receive from the Games.
(Preuss, 2004: 26)

Estimating the true economic impact of a summer Olympic Games properly

therefore requires a huge research budget in addition to the other costs associ-
ated with the Games. Research needs to start several years before the Olympics
and continue several years after they have finished. So far nobody has been
willing to fund such research. There is increasing research output, however, relat-
ing to other major sporting events.

The economic importance of other major sports events

The study of hallmark events or mega-events became an important area of the

tourism and leisure literature in the 1980s. The economic benefits of such events
have been the main focus of such literature, although broader based multidisci-
plinary approaches have been suggested (Hall, 1992; Getz, 1991). Within the
area of mega-events, sports events have attracted a significant amount of atten-
tion. One of the first major studies in this area was the study of the impact of
the 1985 Adelaide Grand Prix (Burns, Hatch & Mules, 1986). This was followed
by an in-depth study of the 1988 Calgary Winter Olympics (Ritchie, 1984;

© The Editorial Board of the Sociological Review 2006 43

Chris Gratton, Simon Shibli, and Richard Coleman

Ritchie & Aitken, 1984, 1985; Ritchie & Lyons, 1987, 1990; Ritchie & Smith,
1991).
Mules and Faulkner (1996) point out that hosting major sports events is not
always an unequivocal economic benefit to the cities that host them. They
emphasize that, in general, staging major sports events often results in the city
authorities losing money even though the city itself benefits greatly in terms of
additional spending in the city. They cite the example of the 1994 Brisbane
World Masters Games which cost Brisbane A$2.8 million to put on but gener-
ated a massive A$50.6 million of additional economic activity in the state
economy. Mules and Faulkner’s basic point is that it normally requires the public
sector to be involved in the role of staging the event and incurring these losses
in order to generate the benefits to the local economy:

This financial structure is common to many special events, and results in the losses
alluded to above. It seems unlikely that private operators would be willing to take on
the running of such events because of their low chance of breaking even let alone
turning a profit. The reason why governments host such events and lose taxpayers’
money in the process lies in spillover effects or externalities. (Mules & Faulkner, 1996:
110)

It is not a straightforward job, however, to establish a profit and loss account

for a specific event. Major sports events require investment in new sports facil-
ities and often this is paid for in part by central government or even interna-
tional sports bodies. Thus, some of this investment expenditure represents a net
addition to the local economy since the money comes in from outside. Also such
facilities remain after the event has finished acting as a platform for future activ-
ities that can generate additional tourist expenditure (Mules & Faulkner, 1996).
Increasingly, sports events are part of a broader strategy aimed at raising the
profile of a city and therefore success cannot be judged simply on a profit and
loss basis. Often the attraction of events is linked to a re-imaging process and,
in the case of many cities, is invariably linked to strategies of urban regenera-
tion and tourism development (Bianchini & Schengel, 1991; Bramwell, 1995;
Loftman & Spirou, 1996; Roche, 1994). Major events if successful have the
ability to project a new image and identity for a city. The hosting of major sports
events is often justified by the host city in terms of long-term economic and
social consequences, directly or indirectly resulting from the staging of the event
(Mules & Faulkner, 1996). These effects are primarily justified in economic
terms, by estimating the additional expenditure generated in the local economy
as the result of the event, in terms of the benefits injected from tourism-related
activity and the subsequent re-imaging of the city following the success of the
event (Roche, 1992).
Cities staging major sports events have a unique opportunity to market them-
selves to the world. Increasing competition between broadcasters to secure
broadcasting rights to major sports events has led to a massive escalation in fees
for such rights which, in turn, means broadcasters give blanket coverage at peak

44 © The Editorial Board of the Sociological Review 2006

 The economic impact of major sports events

times for such events, enhancing the marketing benefits to the cities that stage
them.

Methodology

The ten events under survey are detailed in Table 1. All but one of them, the
2002 World Snooker Championship (which was a contract for the host city,
Sheffield), were studied as part of a UK Sport funded research project to esti-
mate the economic impact of the events. UK Sport is the body responsible in
the UK for a ‘World Class Events Programme’ that supports sports governing
bodies in their attempts to bring major sports events to the UK. Financial
support is provided from lottery funding for both the bidding process and the
staging of the event if the bid is successful. Two of the events studies (the World
Boxing Championships in Belfast, and the World Half-Marathon Champi-
onships in Bristol) were joint contracts with both UK Sport and the host cities
(ie, Belfast and Bristol).
The ten studies featured in this chapter were conducted using essentially the
same methodology. This, therefore, provides the added value of having a dataset
in which the events are comparable. It is the results of cross event comparabil-
ity and the issues arising from such comparisons upon which this chapter is

Table 1: Major sports events surveyed in the U.K.

Year Event Abbreviation Host City
1997 World Badminton Championships WBC Glasgow
1997 European Junior Boxing EJBC Birmingham
Championships
1997 European Junior Swimming EJSC Glasgow
Championships
1998 European Short Course Swimming ESCSC Sheffield
Championships
1999 European Show Jumping ESJC Hickstead
Championships
1999 World Judo Championships WJC Birmingham
1999 World Indoor Climbing WICC Birmingham
Championships
2001 World Amateur Boxing WABC Belfast
Championships
2001 World Half Marathon WHM Bristol
Championships
2002 World Snooker Championship WSC Sheffield

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Chris Gratton, Simon Shibli, and Richard Coleman

primarily concerned. The methodology employed in the economic impact

studies was divided into ten stages, which can be summarized as follows:
• Quantify the proportion of respondents who live in the host city and those
who are from elsewhere;
• Group respondents by their role in the event, eg, spectators, competitors,
media, officials etc;
• Establish basic characteristics of visitors, eg, where they live and composition
of the party;
• Determine the catchment area according to local, regional, national or inter-
national respondents;
• Quantify the number of visitors staying overnight in the host city and the pro-
portion of these making use of commercial accommodation;
• Quantify how many nights those using commercial accommodation will stay
in the host city and what this accommodation is costing per night;
• Quantify for those staying overnight (commercially or otherwise) and day vis-
itors, the daily spend in the host city on six standard expenditure categories;
• Quantify what people have budgeted to spend in the host city and for how
many people such expenditure is for;
• Establish the proportion of people whose main reason for being in the host
city is the event;
• Determine if any spectators are combining their visit to an event with a
holiday in order to estimate any wider economic impacts.
Much of this analysis was undertaken using a standard questionnaire survey to
interview key interest groups at an event and the data collected was then
analysed using a specialist statistical software package and spreadsheets to cal-
culate the additional expenditure in the host economy.

Multipliers
It is the direct impact attributable to additional expenditure that this research
concentrated upon, in order to allow for meaningful comparisons between
events. That is to say, the comparisons do not include induced impact derived
from the application of multipliers to the additional expenditure calculations.
To do so would be to compare host economies rather than specific events, as
multipliers are specific to a given economy. Moreover, the information needed
to establish a multiplier for a given local economy is not always readily avail-
able. As a result, historically, consultants have used highly technical and ambi-
tious multipliers that are not empirically based and are often ‘borrowed’ from
other sectors (eg, construction), or other economies. This ‘borrowed’ type of
multiplier analysis can be considered only a poor approximation at best and any
findings are most likely to be erroneous – not least because the multiplier is
unique to the prevailing local economic conditions and, to reiterate, this type of
research is about comparing events and not economies. Most of John Crompton’s
criticisms of poor methodology in the carrying out of economic impact studies

46 © The Editorial Board of the Sociological Review 2006

 The economic impact of major sports events

of major events are related precisely to the incorrect choice or use of multipli-
ers (see Crompton, 1995, 2001).

Results

Absolute impact
Graph 1 details the absolute additional expenditure directly attributable to
staging each of the ten events. The most significant economic impact is attrib-
utable to the 2002 World Snooker Championship closely followed by the 1997
World Badminton Championships. Both these events took place over a two-
week period and this extended period for the events did lead to higher economic
impact. The World Half Marathon Championships was different from the other
events in the sense that it did not take place in a stadium or fixed seating area
and there were no tickets sold for spectators. Consequently the crowd at this
event has been estimated in conjunction with the local organizing committee,
city authority and the police. This estimate of the number of spectators, which
has been used to calculate the economic impact, is on the conservative side.
In five of the ten events, the additional expenditure generated in the host
economies exceeded £1.45 m, which might be termed a ‘major’ impact. Although
the majority of the events detailed in Graph 1, however, could be described as
‘major’ in the sporting calendars of those who organize the events, closer inspec-
tion of the figures reveals that it does not follow that a ‘major event’ in sport-
ing terms necessarily equates with having a ‘major’ economic impact. For
example, although the two swimming events, the 1997 Junior Swimming Cham-
pionships in Glasgow and the European Short Course Swimming Champi-
onships in Sheffield, were both European Championships, they made a relatively
small contribution to the economy of the host cities.
In a similar manner to the word ‘major’, the words ‘world championships’
do not necessarily mean that there will be a large downstream economic impact.
The 1997 World Badminton event generated economic impacts of £2.2 million,
whereas the 2001 World Half Marathon and 1999 World Indoor Climbing
Championship generated more modest impacts of £584,000 and £398,000
respectively.

Impact per day

Although the absolute economic impact attributable to a given event is impor-
tant in quantifying the overall benefit that an event might have, it is a somewhat
flawed basis for comparison as the duration of events is invariably different. For
example, the World Badminton Championships took place over 14 days and the
World Half Marathon was over inside one and a half hours. Thus in order to
make a standardised comparison of the economic impact attributable to events
it is useful to examine the economic impact per day of competition. The results
of this analysis are shown in Graph 2.

© The Editorial Board of the Sociological Review 2006 47

 Chris Gratton, Simon Shibli, and Richard Coleman

£2,500,000

£2,265,092
£2,221,130 £2,196,298

£2,000,000 £1,943,715

£1,485,141
£1,500,000

£1,000,000

£583,942
£508,920
£500,000
£397,921
£314,513
£257,802

£-
2002 World 1997 World 1999 European 1999 World 2001 World 2001 World Half 1997 European 1999 World 1998 European 1997 European
Snooker Badminton Show Jumping Judo Amateur Boxing Marathon Junior Boxing Indoor Climbing Short Course Junior
Swimming Swimming

Graph 1: Economic impact of ‘major’ sports events.

£700,000

£600,000 £583,942

£500,000 £485,929

£439,260

£400,000

£300,000

£200,000 £185,643
£158,652
£133,241 £132,640
£104,838
£100,000
£64,451 £56,547

£-
World Half World Judo European World Amateur World World Snooker World Indoor European European European
Marathon Show Jumping Boxing Badminton Climbing Short Course Junior Junior Boxing
Swimming Swimming

Graph 2: Daily economic impact of major sports events.

48 © The Editorial Board of the Sociological Review 2006

 The economic impact of major sports events

In Graph 2 we see that the events with the highest absolute economic impact,
The World Badminton Championships and the World Snooker Championship,
are only fifth and sixth in importance in relation to economic impact per day
and it is the World Half Marathon Championship which is most important on
this measure, where the daily impact and the absolute impact are identical,
closely followed by the World Judo Championships and European Show-
Jumping Championships.

Visitor and organizational spend

Generating economic impact is not UK Sport’s rationale for attracting major
events to the UK. As previously suggested, however, it is a useful device by which
to justify the funding of an event in economic terms. Therefore in order to be
able to forecast economic impact it is essential to understand the components
that create economic impact. In broad terms these can be identified as:
• Organizational expenditure, ie, expenditure made directly by the organizers of
an event in the locality where the event is taking place.
• Competitor or delegation expenditure, ie, expenditure made directly by those
taking part in the event and their support staff in the locality where the event
is taking place.
• Other visitor expenditure ie, expenditure made directly by those people
involved with an event other than the organizers and delegations. Other visitor
groups include officials, media representatives and spectators.
In the interest of simplicity the three types of expenditure can be collapsed
into two categories, ie, organizational expenditure and visitor expenditure (del-
egation and other visitor expenditure combined). Using the ten events in the
sample, the relative amounts of expenditure attributable to organizational and
visitor expenditure can be seen in Graph 3.
Graph 3 indicates that for all except one of the events (the European Junior
Boxing Championships), the economic impact attributable to organizational
expenditure was a minor part of the total economic impact with a highest per-
centage score of 26% (World Amateur Boxing Championships) and a lowest
percentage score of 0% in the European Junior Swimming (not illustrated). The
European Junior Boxing Championships was a relatively small event which did
not attract significant numbers of spectators.
For the events included in this sample, the vast majority of the economic
impact (greater than 80%) was caused by visitors and therefore it is logical to
concentrate the subsequent secondary analyses on visitor expenditure. The
reason why the majority of events in this research have relatively low levels of
organizational expenditure is because they were all events that took place within
existing facilities and existing infrastructure. There was no need to build or
upgrade existing facilities and therefore virtually all expenditure incurred by
organizers was on revenue items necessary for the operational running of the
event.

© The Editorial Board of the Sociological Review 2006 49

 Chris Gratton, Simon Shibli, and Richard Coleman

100%
7% 7% 8% 9% 10% 12% 13%
90%
26%

80%

52%
70%

60%

50%
93% 93% 92% 91% 90% 88% 87%
40%
74%

30%

48%
20%

10%

0%
European Short World Indoor World Snooker World Judo European Show World Half World Badminton World Amateur European Junior
Course Climbing Jumping Marathon Boxing Boxing
Swimming
% Visitor spend % Organisational spend

Graph 3: The relative proportions of visitor and organizational spending at

major sports events.

Visitor expenditure
At this point it is worth disaggregating total visitor expenditure into its
component parts of spectator, competitor (delegation) expenditure and other
visitor expenditure. In 1997 the six events studied were illustrated along a
continuum of ‘spectator’ to ‘competitor and others’. Using the results of the
ten events studied since 1997, this continuum can be upgraded to indicate the
composition of visitor expenditure at an event. The revised continuum is shown
in Graph 4 and this disaggregates the expenditure of ‘others’ from that of
‘competitors’.
From Graph 4 it can be seen that at five of the ten events featured, the major-
ity (at least 51%) of the economic impact can be attributed to spectators and
these would be categorized as ‘spectator driven’ events. By contrast, at the
remaining events the economic impact was driven by other groups (principally
competitors), in particular at the two swimming events. The Short Course and
Junior Swimming events are characterized by having large numbers of com-
petitors staying in commercial accommodation and relatively small numbers
of spectators (990 and 640 admissions respectively) most of whom are either
the friends or families of the competitors; such events are categorized as
‘competitor driven’.

50 © The Editorial Board of the Sociological Review 2006

 The economic impact of major sports events

100%
6%
12% 12% 10%
15%
90% 19%
22% 24%
28%
9% 35%
80% 13% 28%
4%

70% 36%

60% 33% 44%

40%
50% 81%

40% 78%
74% 56%
72%
66%
30%
51%
43%
20%
37%
32%

10%
9% 8%
0%
World Indoor World Snooker European Show European World Judo World Half World Amateur World European Short European
Climbing Jumping Junior Boxing Marathon Boxing Badminton Course Junior
Swimming Swimming
Spectator Competitor/Delegations Other

Graph 4: The continuum between spectators’ and other visitors’ expenditure.

Key determinants of economic impact

In order to investigate the relationship between the absolute scale of an eco-

nomic impact and the number of people who generated it, we now examine eco-
nomic impact against the total number of spectator admissions as shown in
Graph 5. This does not include events which were not staged in stadiums and
where the spectator admissions were approximations, as there were no audience
data available (eg, the World Half Marathon). Graph 5 indicates that there is a
very high correlation (r = 0.91) between the number of spectator admissions at
an event and the economic impact attributable to that event. Therefore it can
be concluded that if economic impact is an important consideration in deter-
mining whether or not to support an event, then the number of spectators is the
principal determinant of absolute economic impact. As a consequence of this
finding it can be concluded that in elite level sport (ie, the type of event likely
to be supported by UK Sport), ‘competitor driven’ events are unlikely to gen-
erate as much economic impact in absolute terms compared with ‘spectator
driven’ events.
It could be argued that if all or most of the spectators attending an event
were local people, then the economic impact attributable to that event would be
relatively small as there would be only a small net change in the economy ie,
most expenditure would be ‘deadweight’. In order to investigate this possibility

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 Chris Gratton, Simon Shibli, and Richard Coleman

£2,500,000
Correlation coefficient r = 0.91
Snooker
Badminton
Show Jumping

£2,000,000
Judo

Boxing
£1,500,000
Economic Impact

£1,000,000

Junior Boxing
£500,000
Indoor Climbing
Short Course Swimming
Junior Swimming

£-
0 5000 10000 15000 20000 25000 30000 35000 40000 45000
Spectator Admissions

Graph 5: The relationship between spectator admissions and absolute

economic impact.

further, we examine the relative proportions of local to non-local admissions as

detailed in Graph 6.
According to Graph 6, there was only one instance of local admissions
exceeding those of non-local people: the World Half Marathon Championships.
The World Half Marathon had 55% of spectators from the local area. This was
a direct result, however, of the Bristol Half Marathon running alongside the
elite event, hence there were many people from Bristol supporting family and
friends in the mass participation event. Moreover, of the remaining events, the
event organizers at the European Show Jumping and the World Amateur Boxing
interfered with the market conditions, in that significant numbers of compli-
mentary tickets were passed to local people in order to increase the attendance
at the events. Hence it is reasonable to conclude that the majority of spectators
to events come from outside the local area and this therefore confirms the earlier
assertion that absolute economic impact is critically dependent on the number
of spectators attending an event – a point emphasized still further when one
considers that the correlation between non-local admissions and absolute
impact while still high (r = 0.87), is not as high as the correlation using total
spectator admissions.
The key points emerging from this initial results section can be summarized
as follows:
• The most appropriate way to compare the economic impact attributable to
various events is on an economic impact per day basis;

52 © The Editorial Board of the Sociological Review 2006

 The economic impact of major sports events

100%
9%
13%
17%
90%
25% 27%
34%
80% 38%
45%
55%
70%

60%

50% 100%
91%
87%
83%
40%
75% 73%
66%
30% 62%
55%
45%
20%

10%

0%
European Junior World Indoor World Judo European Short World Snooker European Junior World Amateur World Badminton European Show World Half
Swimming 990 Climbing 5,444 16,000 Course 33,276 Boxing 1,690 Boxing 18,300 21,702 Jumping 40,000 Marathon 15,000
Swimming 640

Visitors Locals

Graph 6: The relative proportions of non-local and local spectators at events.

• Spectator driven events are likely to have a higher economic impact than com-
petitor driven events;
• The key determinant of total economic impact is the number of spectators
attending an event;
• For most major sporting events, visitors from outside the immediate area are
likely to account for the majority of admissions.

Additional benefits

The Balanced Scorecard approach to event evaluation

This final section may interest event organizers and practitioners, as well as
social scientific analysts, in that it acknowledges that the benefits associated with
events are far reaching and not merely confined to economic impacts. This
section uses the ‘Balanced Scorecard’ approach to event evaluation (see Figure
1) developed from original work at Harvard Business School.
Apart from an event’s economic impact, additional aims and benefits might
arise in the form of media value linked to coverage at home or internationally.
Moreover, linked to such coverage may be place marketing benefits for key
aspects of the host city or area, which could ultimately impact upon tourism by
increasing the number of visitors to the area in future as a result of media cov-
erage afforded to an event. Public perceptions of places can also improve as a

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Chris Gratton, Simon Shibli, and Richard Coleman

Economic Impact

Event Media & Sponsor

Sports Development
Aims Evaluation

Place Marketing Effects

Figure 1: The ‘Balanced Scorecard’ approach to evaluating events.

result of people’s experiences at major sports events, which in turn might lead
to repeat visits as evidenced by qualitative feedback from spectators at some of
the events. Furthermore, an immediate benefit of staging an event might involve
some form of sports development impact which could encourage more people
to take up a sport being showcased. The long-term effect of any increase in par-
ticipation could be tracked, although it may be difficult to prove causality. To
illustrate some of these points, examples are drawn from three events: the Euro-
pean Short Course Swimming Championship, World Amateur Boxing and
World Half Marathon.

Examples of additional benefits

Apart from revealing an economic impact on Sheffield of almost £315,000, the
research into the European Short Course Swimming Championships at the time
also audited the public profile by analysing the television coverage of the event.
In addition to the UK television coverage the event was also shown across
Europe in Germany, Finland, Italy and Croatia. Audience data and broadcasts
were confirmed by the Broadcasters’ Audience Research Board (BARB) and cal-
culations using industry standard methodologies were made relative to:
• Percentage Share: The proportion of people watching a given programme
expressed as a function of the total number of people watching television at
that time.
• Television Rating (TVR): This is the key performance indicator of the size of
an audience for any given programme. TVR is expressed as the percentage of
all the people in a country with access to a television actually watching the
programme or programme segment in question.

54 © The Editorial Board of the Sociological Review 2006

 The economic impact of major sports events

Table 2: Television coverage of the European Short Course Swimming

Championships
Indicator UK Other European Total
Number of Programmes 6 12 18
Total Duration (Minutes) 369 718 1,087
Cumulative Audience (000s) 5,451 2,522 7,973
Highest Share Achieved 23.0% 9.8% 23.0%
Highest TVR Achieved 4.9% 9.0% 9.0%

Using the five countries from which the broadcast and audience data were avail-
able, the European Short Course Swimming Championships attracted a cumu-
lative audience of 7,973,000 of which 5,451,000 were UK viewers as summarized
in Table 2.
The data has two practical applications:
• For event promoters, in order to acquire a greater appreciation of the com-
mercial value of the event in terms of related advertising and sponsorship
sales. Commercial revenues contribute to the operating costs of an event and
hence achieving value for money is the key when advertising and sponsorship
sales are being made.
• For host venues, advertisers and sponsors, who can evaluate the return on their
investment. For example, the total value of the Sheffield City Council support
of the event was £25,000. This can be traded off against the value of the place
marketing achieved. Using the data in Table 2, a degree of quantitative eval-
uation of place marketing can be made. A ‘Sheffield National City of Sport’
advertising board was on display at pool deck level alongside the advertising
board of the main sponsor (Adidas). Using sponsorship industry standard
methodology, it is relatively easy to calculate the proportion of the 1,087
broadcast minutes during which the board was on full view promoting the city
of Sheffield.
The World Amateur Boxing Championships in Belfast achieved a total cumu-
lative audience of 6.6 million in the UK, which included 330,000 young people
under the age of 16 (ie, potential for a sports development impact). Across 13
programmes (mainly on BBC2), the event was screened for a total of 551
minutes (9 hours 11 minutes), with live feed and highlights screened to more
than 20 countries. The UK viewing figures peaked at 2.06 million with the audi-
ence share at this point being 22%.
Based on analyses of the television coverage using specialist sponsorship eval-
uations, estimates suggested that a major sponsor enjoyed media exposure worth
£51,014 in the UK alone. Data such as this provides a sound baseline against
which sponsors can assess the extent to which they have achieved a return on

© The Editorial Board of the Sociological Review 2006 55

Chris Gratton, Simon Shibli, and Richard Coleman

their investment. In this instance the sponsor invested £63,000 and in return they
received exposure that would have cost more than £51,000 to purchase in the
commercial marketplace, ie, 81% of their total investment. In addition to UK
television coverage, broadcasters from other countries also bought the rights to
screen the event and thus there would be additional media value obtained for
the sponsor from this worldwide exposure. Although the worldwide television
exposure was not analysed in this instance, it is possible to access the audience
data as demonstrated by the European Short Course Swimming Championships
example, or alternatively where this is not possible, sponsorship evaluation com-
panies can apply a ‘rate card’ based on a flat rate for 30 seconds of advertising
time on a particular channel.
A similar methodology can be adopted in order to estimate the place mar-
keting effects associated with television coverage. At the World Half Marathon,
Bristol City Council was responsible for underwriting the event and for a sig-
nificant proportion of the running costs. In return the place marketing benefits
linked to the exposure of the ‘Bristol’ brand, amounted to a notional £42,000
of exposure. In order to maximize any place marketing benefits for a particular
location, event organizers should consider working closely with the host broad-
caster in order to ensure the showcasing of key local attractions as the back-
drop to human-interest features around the event coverage. Sheffield City
Council used such human interest features (known as ‘postcards’) to great effect
during a major snooker event in 2002 such that the combined place marketing
effects for the city were a notional £3.2 million, ie, the commercial cost of the
exposure created by the event, based on the cost/1000 viewers of a 30 second
television commercial.
Apart from media value and place marketing, the ‘Balanced Scorecard’
approach also refers to sports development effects and these were analysed
during the research at the World Amateur Boxing in Belfast. In the run-up to
and during the championships a community development programme with
boxer Wayne McCulloch entitled ‘Train with Wayne’ provided young children
and potential future champions with the opportunity to become involved in the
sport of boxing. Up to 100 youngsters participated during the televised build
up to the Championship. During the event ‘Come and Try It’ sessions were
enhanced by concessionary tickets to the event, school visits and discount pack-
ages. Furthermore, training for potential young boxers was also strengthened
through the involvement of 300 local volunteers in the event, training for tech-
nical officials, time-keepers, judges, medical personnel and competition man-
agers. This event has therefore left a broad legacy of enhanced skills which
maybe used to maintain the impetus provided by the staging of the event.
As well as the economic impact attributable to the World Amateur Boxing
(£1.49 m), the profile of Belfast as a city of world-class sport was enhanced
through the marketing of the event and the televisual exposure of the ‘Belfast’
brand throughout the world. Collectively, the boxing and the previous success
of the World Cross Country Championships provided the catalyst to formulate

56 © The Editorial Board of the Sociological Review 2006

 The economic impact of major sports events

an events strategy for Northern Ireland, designed to help re-image the Province
through sport.
In summary, given the complex aims and objectives increasingly associated
with major sports events, in future more detailed analysis and evaluation will be
necessary to satisfy the needs of different partners. Adopting a methodology
linked to (for example) the ‘Balanced Scorecard’ could move beyond simple
economic impact studies, to include TV, media and sponsorship evaluations as
well as sports development, home soil advantage and other legacies.

Conclusions

This chapter has provided a detailed overview of ten economic impact studies
undertaken at major sports events, all World or European Championships, in
the UK since 1997. Each study represents a value-for-money appraisal of an
event, by quantifying the net change in the host economy that is directly attrib-
utable to the event and measurable in cash terms using detailed audit trails. The
evidence presented vindicates (in economic terms) the decisions made by UK
Sport to use Lottery funding via the World Class Events Programme to attract
many of the events. Moreover, the detailed database of event evaluations pos-
sessed by UK Sport provides the evidence to inform future strategic decisions
relative to the type of events that the UK may consider bidding for in years to
come. According to such evidence and in order to maximize potential economic
impact, the following should be considered prior to bidding:
• The ability of the event to attract people from outside the host area and
thereby reduce the ‘deadweight’ percentage of those attending;
• Generally the greater the absolute number of spectators the more significant
the economic impact and junior events are likely to have the smallest impacts
as they rarely attract many spectators;
• The economic impact is not necessarily a function of the status of an event
in world sporting terms;
• The number of days of competition and the availability of local commercial
accommodation to allow visitors to extend their dwell times in the host area.
Beyond the development of the economic impact model, this chapter has
demonstrated how the event evaluations have evolved and should continue to
evolve in order to better understand the likely legacies of events long after any
medals have been presented. These legacies could be in terms of media value,
place marketing effects for the host area, as well as sports development impacts
which may stimulate young people to get more involved in sport. The evidence
presented above suggests that the European model of attracting major sports
events to cities that do not require additional infrastructure investment in
order to host the event can generate significant economic benefits to the host
cities.

© The Editorial Board of the Sociological Review 2006 57

Chris Gratton, Simon Shibli, and Richard Coleman

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