Butler and the Economic Impact of the Final Four

When Butler beat Kansas State Saturday afternoon, it almost certainly had an effect on the economic impact of the Final Four.  Butler University is located in Indianapolis, so most, or all the Butler fans who attend the games will represent local spending, not tourist spending.  Any net economic impact from the Final Four in Indianapolis comes from “export tourism” spending.  That’s all spending on hotels, meals, drinks, car rental, etc. made by visitors from outside Indy who would not have otherwise visited Indy.  My guess is that the majority of Butler’s fans live in the metro Indianapolis area.  So most or all the economic activity undertaken by Butler fans is money that would have been spent on entertainment in the Indy area anyway.

CNBC has an article about this effect.  The usual suspects (me, Vic Matheson, Andy Zinbalist, Mark Roesntraub) have been rounded up for quotes.  Although I dispute the estimate of $50 million in economic impact attributable to the Final Four in the article, the impact of Butler clearly has to reduce the size of the impact.  I would be interested in hearing the reasoning behind Professor Zimbalist’s quote.

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One Response to Butler and the Economic Impact of the Final Four

  1. Dan Rascher says:

    Brad,

    The decrease in EI just because of Butler might not be that large (e.g., 10% instead of 25%) simply because many of the fans at the Final Four are not fans of any specific team and travel to the event regardless of who’s in it. Also, some of the EI comes from the activation of sponsorships, hospitality, NCAA event mgmt spending, media coverage and production, etc.

    — Dan

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