Measuring Success 2 - The Economic Impact of Major Sports Events

The 2003 World Indoor Athletics Championships in Birmingham.

The purpose of this report is to consolidate the research undertaken to date on behalf of UK Sport, examining the economic impact of major sports events since 1997. During this time sixteen such analyses have been undertaken at a variety of events, and these have each attempted to establish the economic impact by calculating:

• The total amount of additional expenditure generated within a host city (or area), which could be directly attributable to the staging of a particular event.

The information contained draws on the findings from the individual studies since 1997. Eleven of these events have been part funded via the Lottery under the auspices of the World Class Events Programme (WCEP), with commercially successful events such as Test Cricket and Women's Open Golf plus the Flora London Marathon also being included for general interest. The Marathon in particular provides an example of the potential there is for other cities across the UK to stage their own mass participation road races, and also as will become clearer, the event generated the most significant economic impact of all those evaluated. The events in question are detailed in Table 1:

* Note: The FLM research was commissioned by the London Marathon Limited

This consolidated piece of research builds on the original 'Measuring Success' in 1999 which was based on the premise that major sports events have the potential to achieve significant economic impacts for the host town, city or area, and which reported the findings from the initial six studies in 1997. The economic impact findings from the original research in 1997 strengthened the position of the WCEP and as a result the idea of trying to bid for and attract major events to the UK. Consequently, UK Sport has continued to monitor the economic impact on a range of major events that it has supported through the WCEP, in order to provide a value for money appraisal of its use of Sports Lottery funding and because economic impact is now one of the parameters upon which an event's success is measured.

This report collates the contents of the consultancy reports provided to UK Sport in order to present a detailed evaluation of some of the events that they have supported. Reanalysis of the data helps to demonstrate the success of the Lottery supported WCEP and the headline findings from particular events provide an online resource for practitioners and educationalists alike. Moreover, taking an holistic view of the events allows commonalities to be explored in order to inform the tendering process as UK Sport continues to try and attract further world class events in order to raise the UK's international profile by bringing the benefits of such events to our home based athletes, our sports system and the nation as a whole.

In addition to the sixteen economic impact studies outlined in Table 1, consultants have developed the research by undertaking wider evaluations of some of the events, for example, the 1998 European Short Course Swimming, 1999 European Show Jumping and the 2001 World Half Marathon Championships. Beyond the economic impact generated by an event, these wider evaluations have also examined the public profile achieved by the events and looked in particular at the media value associated with television coverage and place marketing effects linked to such coverage. This report examines the wider benefits that move beyond the economic impact and proffers the adoption of the 'balanced scorecard' approach to event evaluation. Moreover, the data from the first six economic impact studies carried out in 1997 were used to produce an economic impact forecasting model designed to predict the economic impact attributable to an event prior to it taking place. Since the 1998 European Short Course Swimming, consultants have made a number of pre-event forecasts of the likely economic impact attributable to an event on the basis of desk research and interviews with the event organisers. This report examines the accuracy of such forecasts based on the research to date.

The sixteen studies featured in this report have been conducted using essentially the same methodology. This therefore provides the added value of having a dataset in which the events are almost directly comparable. It is the results of cross event comparability and the issues arising from such comparisons upon which this report is primarily concerned. Where methodologies have been modified, reanalyses of the original datasets has been undertaken in order to allow for meaningful comparisons.

Using the data derived from sixteen previous projects; this report will present the following:

• The definition of economic impact, incorporating the event typology;
• Methodology section incorporating multiplier analysis;
• The economic impact attributable to each event with selected comparisons across the events;
• An analysis of the spending patterns of four key groups of participants at major events; competitors, officials, the media and spectators;
• A breakdown and comparison of the categories of expenditure amongst the key interest groups at the events;
• A comparison of the invisible exports associated with the spending of visitors to the events from overseas;
• An analysis of the return on the Lottery investment at the various events;
• An analysis of the predictive qualities of the economic impact forecasting model;
• A comparison of some of the wider benefits associated with certain events where data is available;
• Recommendations for a future research agenda.

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