Mega-Events: Is Baylor Football to Waco What the Super Bowl is to Houston?

Abstract

Using monthly data describing 23 cities in Texas from January, 1990, through December, 2008, the net impacts of various professional and collegiate sporting events on sales tax revenues are estimated. Contrary to the rhetoric offered by those who argue in favor of public subsidies to host professional sports franchises and mega-events, the authors find that regular season and many postseason games actually correspond with net decreases in economic activity in the host city, from which we infer that a professional sports franchise generates considerable substitution effects for the local population. The authors find that college football games have a positive impact on local host-city tax revenues and that the relative impact of a season of college football might be roughly equivalent to the relative impact of the Super Bowl.