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SPORTS in LOS ANGELES and ORANGE COUNTIES: an Economic Impact Analysis

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SPORTS in LOS ANGELES and ORANGE COUNTIES: an Economic Impact Analysis SPORTS IN LOS ANGELES AND ORANGE COUNTIES: An Economic Impact Analysis INSTITUTE FOR APPLIED ECONOMICS SPORTS IN LOS ANGELES AND ORANGE COUNTIES: An Economic Impact Analysis JUNE 2019 The Los Angeles Sports Council commissioned this research. The LAEDC Institute for Applied Economics specializes in objective and unbiased economic and policy research in order to foster informed decision-making and guide strategic planning. In addition to commissioned research and analysis, the Institute conducts foundational research to ensure LAEDC’s many programs for economic development are on target. The Institute focuses on economic impact studies, regional industry and cluster analysis and issue studies, particularly in workforce development and labor market analysis. Every reasonable effort has been made to ensure that the data contained herein reflect the most accurate and timely information possible and they are believed to be reliable. This report is provided solely for informational purposes and is not to be construed as providing advice, recommendations, endorsements, representations or warranties of any kind whatsoever. Dr. Somjita Mitra John Ramsey Dr. Jack Caress Special thanks to Samantha Jordan, Jerry Papazian student intern for LA Sports Summit, Wendy Disch University of Michigan INSTITUTE FOR APPLIED ECONOMICS 444 S. Flower Street, 37th Floor • Los Angeles, CA 90071 www.LAEDC.org/IAE © 2019 Los Angeles County Economic Development Corporation Collectively Advancing and Los Angeles Sports Council. All rights reserved. Opportunity and Prosperity for All LOS ANGELES SPORTS COUNCIL SPORTS IN LOS ANGELES Los Angeles Sports Council The Los Angeles Sports Council is a private, nonprofit organization that encourages economic and community development through the promotion of spectator sports programs in the Los Angeles and Orange County area, including support of our local teams and the attraction of AND ORANGE COUNTIES: events to the area. On behalf of the community the Sports Council bids against other cities for An Economic Impact Analysis the right to host major sporting events, often staging or helping to stage events after successful bids. The Sports Council’s efforts represent more than $1 billion in overall economic impact for the region and range from NCAA championships to the Super Bowl and from U.S. Olympic trials to the FIFA World Cup. The Sports Council is also the brainchild behind the LA Sports Awards, an annual televised awards gala that celebrates outstanding sports achievements, athletes and coaches in the Los Angeles/Orange County area. In June 2019, the Sports Council will stage its inaugural LA Sports Summit, a first-of-its-kind, sports industry conference. Southern California Committee for the Olympic Games TABLE OF CONTENTS Formed in 1939, the Southern California Committee for Executive Summary the Olympic Games (SCCOG) is a non-profit organization 1 whose mission is to promote the Olympic movement in 1. Introduction 2 Southern California. SCCOG is closely aligned and shares 2. Professional Teams 5 offices with the Los Angeles Sports Council. 3. Collegiate Teams 9 In furtherance of its mission, the organization has 4. The Fans 13 engaged in many Olympic-related projects over the years, ranging from organizing sporting events and conferences 5. Local Organizations and Events 16 to partnering with the City of Los Angeles on bids to host 6. Community Impact 21 the Olympic Games. 7. Women in Sports 24 SCCOG’s long-term commitment to youth is most 8. Conclusion 26 evident through its Ready, Set, Gold! program which Description of Industry Sectors 27 places dozens of local Olympians and Paralympians into LAUSD public schools to promote fitness and to motivate students to adopt healthy habits. 01 ECONOMIC IMPACT ANALYSIS Here in Los Angeles, we know sports are more than just good entertainment — they drive our economic dynamism and expand opportunities for Angelenos and families across our region. Our city is one of the world’s truly great sports towns — and this report reaffirms that what happens in our arenas, ballparks, and fields helps us create jobs, attract investment, and stimulate economic growth. ERIC GARCETTI Mayor, City of Los Angeles EXECUTIVE SUMMARY t is often said that only in Los Angeles can vitality of the region while creating significant one spend the morning surfing and the economic contributions. The LAEDC Institute for evening skiing. Not only are Angelenos active Applied Economics has quantified the significant participants in sports, a key component of a economic impact of the sports industry in Los healthy lifestyle, but we also support sports Angeles and Orange County in 2018.w in various environments from high school to college to professional. Sports are synonymous EXHIBIT ES-1 with the outdoorsy, active culture of the greater Economic and Fiscal Impact of Sports Industry 2018 Los Angeles area, which makes the region so desirable for residents and attracts thousands of Total Economic Impact: visitors from around the world. Output ($billions) $6.2 Employment (jobs) 39,100 Whether it is cheering for a high school football Direct 22,600 team on Friday nights, supporting local college Indirect and induced 16,500 football teams on Saturday afternoons or rooting Labor income ($ billions) $3.2 for professional football on Sunday evenings, Angelenos are entrenched in the culture and Total State and Local Taxes ($millions): $327.6 environment of sports. Source: Estimates by LAEDC Moreover, the development of the Los Angeles Stadium at Hollywood Park to house the Los Angeles Rams and Los Angeles Chargers, the likely Economic and Fiscal Impact development of the Clippers Arena, the refurbishing of the Los Angeles Memorial Coliseum and other In 2018, the sports industry in greater Los Angeles capital investments indicates the ongoing significant generated considerable economic activity by adding investment in supporting the thriving sports $6.2 billion in economic output and supporting nearly industry in greater Los Angeles. 40,000 jobs with a total labor income of $3.2 billion. These jobs translate roughly to 34,100 full time jobs. While these events are a source of great pride for We estimate this activity added over $327 million in many Angelenos, they also contribute to the cultural tax revenues for state and local governments. w 02 LOS ANGELES SPORTS COUNCIL INTRODUCTION rom waves to stadiums, on the green or on the turf, Los Angeles and Orange County offer competitive sporting events in almost any athletic event imaginable. The region’s ability to offer a perfect package of weather, entertainment, dedicated fans and state of the art facilities make it the sports capital of the country. Indeed, the area is home to two teams in every major professional league, Division I college teams and nationally accredited high schools. This report quantifies the total economic impact (including direct, indirect and induced effects) of the sports industry in the Los Angeles and Orange County region. The economic and fiscal analysis is taken in three parts. First, the value added by professional teams within the region. Second, we look at collegiate level teams, which bring in nearly as much attention as national-level teams. The third aspect analyzes local organizations, usually responsible for organizing and maintaining the venues and leagues that these teams and athletes use for competing. Only in LA can a marathon unite people from 140 countries that speak Economic Impact Analysis 224 languages! As runners race from Economic impact analysis is used to estimate the Dodger Stadium to Santa Monica, overall economic activity, including spill-over and they run through neighborhoods multiplier impacts (often referred to as indirect showcasing LA’s unique diversity and and induced activity), which occurs as a result of a particular business, event or geography (direct cultural resources. An event of this activity). magnitude would not be possible without the willing cooperation of The initial economic activity related to the operations of professional teams, collegiate various stakeholders in the region athletic departments, local organizations, and and illustrates our ability to host ancillary activities is the purchase of goods and world-class sporting events including services from local vendors and the wages and benefits paid to local workers. the up-coming 2028 Olympics! This injection of funds into the region circulates MURPHY REINSCHREIBER from the owners of the teams and schools, as CEO, Los Angeles Marathon well as the employees of establishments that help supply the goods and services that the stadium and franchises purchase. These suppliers in turn Institute for Applied Economics 03 ECONOMIC IMPACT ANALYSIS hire workers and buy goods and services to Approach and Methodology facilitate their business. conomic impact analysis typically The magnitude of the multiplying effect differs begins with an increase in demand from one region to another depending on the for an industry’s output, such as a extent to which the local region can fill the purchase of football game tickets, demand for all rounds of supplying needs. For concessions, legal services, or rent and example, the automobile manufacturing industry utilities. Alternatively, analysis may be has high multipliers in Detroit and Indiana since conducted using detailed expenditures, such as these regions have deep and wide supplier team spending on employees, medical care, rent, networks, while the same industry multiplier in legal costs and so on.
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