Archived

This topic is now archived and is closed to further replies.

Stingray

AC: Economic Impacts of a Match on San Francisco Bay

Recommended Posts

This is due to be released on Monday.

 

But we get to see it first, because I found it! :D

 

PDF (61 Pages, 4.6 MB)

 

Economic Impacts of a Match on San Francisco Bay

 

 

Could be a good read.

 

--

 

 

Executive Summary

 

The America's Cup is the world's third-largest sporting competition, after the Olympics and soccer's World Cup.

Securing hosting rights to the Cup is therefore a prestigious and economically significant prize for any community. The economic benefits of bringing the America's Cup to San Francisco would come primarily throughexpenditures by racing syndicates, and through spending on hotels, restaurants, and retail and other services by both domestic and overseas visitors and Bay Area residents. If the competition were to run for three months, this could lead to an additional 2.6 million spectators. While these impacts would be primarily concentrated in San Francisco, nearby counties such as Alameda, Marin, Napa, Sonoma, and San Mateo would also benefit from increased visitor and maritime activity.

 

This report endeavours to provide estimates of the economic impact of an America's Cup match on the San Francisco Bay. Economists have paved the way by providing estimates of the economic impacts of previous America's Cups, including an analysis of the economic impacts of the 32nd America's Cup of 2007 in Valencia, Spain. Starting with that study as a rough guide, this analysis makes a number of assumptions: that infrastructure cost and spending will be several billion dollars less; that spectator attendance will be considerably larger; that the media's presence will be larger; and that the presence of super yachts will likely be smaller.

 

From this, we estimate that the increase in overall economic activity in San Francisco due to hosting an America's Cup could be on the order of $1.4 billion. This is three times the estimated impact of hosting the Super Bowl ($300-$500 million). The potential increase in employment surrounding the event could be on the order of 8,840 jobs. This increase in output and employment would likely yield a benefit to state and local government coffers of nearly $85 million. Additional taxes alone to the City's General Fund are expected to net more than $13 million, based on more than $24 million in revenue, and an estimated $11 million in tourism related costs.

 

--

Share this post


Link to post
Share on other sites

Good find, stinger. Where do they get this from? "The America's Cup is the world's third-largest sporting competition, after the Olympics and soccer's World Cup."

Share this post


Link to post
Share on other sites

Good find, stinger. Where do they get this from? "The America's Cup is the world's third-largest sporting competition, after the Olympics and soccer's World Cup."

From the footnote

 

1 The 2000 Olympic Games were reported to have an economic impact of some $10 billion. According to the FIFA website, the 2006 World

Cup recorded official attendance statistics of 3.4 million people, or 52,491 per match.

 

 

From above

 

"From this, we estimate that the increase in overall economic activity in San Francisco due to hosting an America's Cup could be on the order of $1.4 billion. This is three times the estimated impact of hosting the Super Bowl ($300-$500 million)."

 

 

Big number!!!

Share this post


Link to post
Share on other sites

--

Summary

 

This report has shown that as the third largest economic prize among sports, and a far larger prize than the Super Bowl or an all-star game, the America's Cup brings with it a tremendous economic windfall. Likely lasting three months or more, the America's Cup and the racing leading up to the defense, has the potential to increase spending in San Francisco by nearly $800 million. This increase in spending brings with it a total increase in economic activity of nearly $1.4 million.

--

 

Typo! That should be Billion, with a B. Oops..

Share this post


Link to post
Share on other sites

Great find - and a very detailed, objective and conservative report. Nice that they aren't overselling the event.

 

They should have had you proof read it beforehand :).

Share this post


Link to post
Share on other sites

Great find - and a very detailed, objective and conservative report. Nice that they aren't overselling the event.

 

They should have had you proof read it beforehand :).

Agreed, it is reasonably conservative.

 

The spend amounts by the syndicates is a much larger proportion than what I had realized before. And the cost they are looking at for rebuilds of Piers 30/32 and 50 are in the $100M-$120M range, that is a pretty big number too.

 

I did email a couple of the people listed, alerting them to the typo, hopefully they can get it corrected before wider distribution. Big numbers like this are sure to attract attention and scrutiny.

Share this post


Link to post
Share on other sites

Great find - and a very detailed, objective and conservative report. Nice that they aren't overselling the event.

 

They should have had you proof read it beforehand :).

Agreed, it is reasonably conservative.

 

The spend amounts by the syndicates is a much larger proportion than what I had realized before. And the cost they are looking at for rebuilds of Piers 30/32 and 50 are in the $100M-$120M range, that is a pretty big number too.

 

I did email a couple of the people listed, alerting them to the typo, hopefully they can get it corrected before wider distribution. Big numbers like this are sure to attract attention and scrutiny.

 

My guess is that this is very easy to defend for very specific purposes.

 

Totally agree with the approach - stifle the naysayers right out of the chute. That probably eliminates a lot of SA inputs, although I'm sure some will go out of their way to find fault.

 

The good news is that this is all speculative, and very well quantified as such.

Share this post


Link to post
Share on other sites

... Economists have paved the way by providing estimates of the economic impacts of previous America's Cups, including an analysis of the economic impacts of the 32nd America's Cup of 2007 in Valencia, Spain. Starting with that study as a rough guide, this analysis makes a number of assumptions: that infrastructure cost and spending will be several billion (??) dollars less ..

Share this post


Link to post
Share on other sites

Interesting doc, and good luck to SF...

 

though one would think that todays economies are far different from booming 2007..

 

the syndicates spend then $554.7M.. (doc figures)

 

a wee bit optimistic expecting more cash??? how much harder to raise cash from sponsors?

 

worlds third largest event?.. really? have they heard of the huge population of India and its addiction to Cricket.. am sure there are other examples too - sources would be great..

 

not wanting to piss on the parade but?.. very easy to offside people...

 

Again SF would be great..

 

biggrin.gif

 

Edit from Wiki - hope they don't have google!

 

Worlds largest sporting events

 

1) FIFA World Cup

 

2) IOC Summer Olympics

 

3) ICC Cricket World Cup

 

4) European Football Championships

 

5) UEFA Champions league

 

6) Rugby World Cup

 

7) FIA Formula 1 World Championships

 

8) Tour de France

 

9) IOC Winter Olympics

 

10) Super Bowl

 

 

 

 

Share this post


Link to post
Share on other sites

And the cost they are looking at for rebuilds of Piers 30/32 and 50 are in the $100M-$120M range, that is a pretty big number too.

 

That rebuild cost is similar to what I heard by an expert not too many mos. ago. Folks don't comprehend that these piers are close to derelict. I f you google satelite around those sites- you'll see a field of pilings near 30/32 with no pier- we've used them for mooring points for raftups to watch events at pier 30/32 and kaboom fireworks

 

Thanks for finding the typo- I'll let some folks know too

Share this post


Link to post
Share on other sites

Interesting doc, and good luck to SF...

 

though one would think that todays economies are far different from booming 2007..

 

the syndicates spend then $554.7M.. (doc figures)

 

a wee bit optimistic expecting more cash??? how much harder to raise cash from sponsors?

 

worlds third largest event?.. really? have they heard of the huge population of India and its addiction to Cricket.. am sure there are other examples too - sources would be great..

 

not wanting to piss on the parade but?.. very easy to offside people...

 

Again SF would be great..

 

biggrin.gif

 

Edit from Wiki - hope they don't have google!

 

Worlds largest sporting events

 

1) FIFA World Cup

 

2) IOC Summer Olympics

 

3) ICC Cricket World Cup

 

4) European Football Championships

 

5) UEFA Champions league

 

6) Rugby World Cup

 

7) FIA Formula 1 World Championships

 

8) Tour de France

 

9) IOC Winter Olympics

 

10) Super Bowl

 

 

Biggest by economic impact- not attendance. Indy 500, kentucky derby are big by attendance

Share this post


Link to post
Share on other sites

Before they go and spend all that dough on infrastructure they should take a look at a "rock up and race" event without an "AC village" and all that crap. I bet that the income would be the same. Be way cooler too .

Share this post


Link to post
Share on other sites

Great find - and a very detailed, objective and conservative report. Nice that they aren't overselling the event.

 

They should have had you proof read it beforehand :).

Agreed, it is reasonably conservative.

 

I did email a couple of the people listed, alerting them to the typo, hopefully they can get it corrected before wider distribution. Big numbers like this are sure to attract attention and scrutiny.

 

 

... Economists have paved the way by providing estimates of the economic impacts of previous America's Cups, including an analysis of the economic impacts of the 32nd America's Cup of 2007 in Valencia, Spain. Starting with that study as a rough guide, this analysis makes a number of assumptions: that infrastructure cost and spending will be several billion (??) dollars less ..

 

Good catch, that correction sent too.

 

I got a response late last night. It turns out that someone at the Bay Area Council Economic Institute may by mistake have posted the draft; the link and report were supposed to be added to an inside page that is behind their firewall. It had not yet gone through proof-reading and final approvals. Once Beacon Economics has delivered the final version then I expect the BAEI will update that link. Since it impacted the news, and the news cycle, that person probably should have been a little more careful.

 

But news timing impact aside, the big news is the same in the end. It really is a conservative approach that still results in a very compelling economic impact. Along with the figures for taxes, revenues and sectors affected, let's hope some important people can take it to the bank and make a convincing case for the SF Cup. Because this could potentially be awesome!

Share this post


Link to post
Share on other sites

Before they go and spend all that dough on infrastructure they should take a look at a "rock up and race" event without an "AC village" and all that crap. I bet that the income would be the same. Be way cooler too .

 

 

Fuck yeah. Why don't they synthesise the design space for the cant keeler with the Volvo Requirements. That way they could make the America's Cup race just an inport event for the Round the World Race. If they get the timing right the boats could just divert on their Pacific course - enter the Bay for a lap around Alcatraz to determine the Cup Winner and then just fuck-off down to Cape Horn. That way the Cup returns to its Ocean Racing roots and the crews don't even need to stop work to take a Piss in the Bay and infringe any good ol USA bylaws ??

Even better. You should be able to race any boat you like so long as the defender accepts/thinks he can beat you.

Share this post


Link to post
Share on other sites

Looks like they locked the barn door - too bad I didn't save the document. All the same, another notch for SA and SR, definitely

Share this post


Link to post
Share on other sites

The America's Cup is the world's third-largest sporting competition, after the Olympics and soccer's World Cup.

 

 

Complete and utter nonsense. This clearly demonstrates these authors will write any amount of bullshit and twist it into any possible interpretation to make their point. The whole report should be looked upon as total rubbish.

 

Third largest sporting competition, yet they could barely get anyone to show up with their cameras for live TV. They had to pay TV to come. A grand total of almost nobody watched it. True enough, they spent shitloads of money on the event, and true enough Joe's Crab Shack in San Diego had a few new customers, but I'll bet the Marriot next door did even notice them being in town. The economic impact was nearly fucking nothing - in San Diego. I am sure too, it was rather modest in Valencia - a race in the winter when sailors were in the hats and full jackets. It was flipping 8 C those days. Again, no economic impact worth measuring.

 

What a fucking joke this report is - and I haven't even got past the first line! If this report landed on my desk to sway my vote, I'd definately vote 'no' as nothing else in the report could be believable either. Way to lose the trust from the get-go

Share this post


Link to post
Share on other sites

This is due to be released on Monday.

 

But we get to see it first, because I found it! biggrin.gif

 

PDF (61 Pages, 4.6 MB)

 

Economic Impacts of a Match on San Francisco Bay

 

 

Could be a good read.

 

--

 

 

Executive Summary

 

The America's Cup is the world's third-largest sporting competition, after the Olympics and soccer's World Cup.

Securing hosting rights to the Cup is therefore a prestigious and economically significant prize for any community. The economic benefits of bringing the America's Cup to San Francisco would come primarily throughexpenditures by racing syndicates, and through spending on hotels, restaurants, and retail and other services by both domestic and overseas visitors and Bay Area residents. If the competition were to run for three months, this could lead to an additional 2.6 million spectators. While these impacts would be primarily concentrated in San Francisco, nearby counties such as Alameda, Marin, Napa, Sonoma, and San Mateo would also benefit from increased visitor and maritime activity.

 

 

--

 

 

This is why it is of benefit, spreading it out over a period of months vs a week for the Super Bowl. You still retain all the upgrades, apparently to areas that may not have seen development, and would have remained in poor condition and unable to generate revenue.

 

SF should take it, as the world-wide PR is priceless.

Share this post


Link to post
Share on other sites
Guest multitranslation

who gives a fuck about the AC?

Share this post


Link to post
Share on other sites

who gives a fuck about the AC?

 

 

about 35 guys and another four or five billionaires who are bored with having so much money - but no one else.

Share this post


Link to post
Share on other sites

SF should take it, as the world-wide PR is priceless.

Who is going to use the jamboree facilities after the event? Is there a real viable legacy use? VLC piled a whole load of euros into the game and they now have two F1 events around the docks but no AC. Can you hold an F1 race around pier 51 whatever? What's the fall back position? Lower the entry fees, get challengers to find their own facilities and race without the shenanigans. More bangs per buck and a whole load more street cred.

Share this post


Link to post
Share on other sites

Looks like they locked the barn door - too bad I didn't save the document. All the same, another notch for SA and SR, definitely

 

Wow - They did!

 

Yes I did save a copy and many of you will have cached versions still accessible. But since it's apparently a not-for-release draft, I will not be posting it. Please, pretty please with a tablespoon of sugar on top, anyone else hold off posting the old version too?

 

This is potentially important to the SF cause... Which btw is a wind machine that is only a 90 minute flight away for me :)

 

 

I will set an alert on their page and post the new link here soon as it goes up.

Share this post


Link to post
Share on other sites

Wow - They did!

Why so keen to stop others re-posting? Somebody felt your collar SR?

 

 

Can't you read? He wants just the opposite. He first reminds everyone to look in their cache for the doc before reposting it.

Share this post


Link to post
Share on other sites

I will set an alert on their page and post the new link here soon as it goes up.

How do you do this? Is that automated?

Share this post


Link to post
Share on other sites

Wow - They did!

Why so keen to stop others re-posting? Somebody felt your collar SR?

Yes, a gentleman at the BAC responded to me, his web person posted it to the wrong place.. right before leaving town for the weekend! Along with the typo's I sent him a link to the FP, pointing out how it's already out there and - being an economist and so probably a bureaucrat/egghead - my guess is he looked at that and thought 'Sailing What?' Lol :)

 

Like I say, my personal/selfish motivation is to help, not hurt, the SF Cup venue cause because I think it could be great. Let's allow the pro's to (try) get 'er done right. Fingers crossed..

 

It is likely only a matter of hours before they re-stage it. We have the general thrust of the piece posted above anyway. The $1.4B will not shift over the weekend.

Share this post


Link to post
Share on other sites

I will set an alert on their page and post the new link here soon as it goes up.

How do you do this? Is that automated?

That's a good question. Am on Mozilla 3.6.6 this weekend, anyone know?

 

The link to watch is

http://www.bayeconfor.org/keypub.html

 

But I will likely see it in the normal Google News alerts anyway, via email, once the rest of the world catches up.

Share this post


Link to post
Share on other sites

Looks like they locked the barn door - too bad I didn't save the document. All the same, another notch for SA and SR, definitely

Haven't even had the chance to have a look at it, just returned home :angry: . I hope it didn't contain the huge exaggerations these reports usually try to sell to people as being the truth, like spectator numbers and such.

 

Well, if it helps the cause...

Share this post


Link to post
Share on other sites

Looks like they locked the barn door - too bad I didn't save the document. All the same, another notch for SA and SR, definitely

Haven't even had the chance to have a look at it, just returned home :angry: . I hope it didn't contain the huge exaggerations these reports usually try to sell to people as being the truth, like spectator numbers and such.

 

Well, if it helps the cause...

After seeing some of the data being banted around when RAK was a consideration I had the same concern.

 

I read the entire 56 page report and think you will be pleasantly surprised when it gets released. I'll refrain from posting the draft copy as requested but will share this statement; "We have consciously made an effort to be conservative in our analysis. This conservative approach reduces the estimates of the impact, but given the size of the numbers, it still presents a very compelling case for substantial local economic benefits".

 

They spend a fair amount of time quantifying their assumptions with facts/industry data as well as explaining the reasoning behind the assumptions as they apply locally.

 

If anything the report is objective and steers clear of making any outlandish claims.

Share this post


Link to post
Share on other sites

This report is great fun.. the deal must have been done, with this as a bit of paper to wave around..biggrin.gif

 

I hope this is just a first draft else it will get hammered..

 

The 'sensitivity' analysis only increases the 'impact'.. !!! no gfc!.. 2 pages out of 54?

"From this, it is reasonably clear that the impact could be substantially greater than the $1.4 billion presented

above. These three changes result in an increase in expenditures of just under $200 million, with an associated

increase in overall impact of $326 million, creating an additional 2,000 jobs. It is similarly possible that the impact

could be reduced to the extent that our assumptions are overly aggressive."

They really need to do a 'risk' analysis including some downside...am sure the SF taxpayers are up for a bucketload, so deserve some respect!

 

Again they are sure the AC is the world's third largest event - "The America's Cup is the world's third-largest sporting competition currently in existence. This is true whether measured by number of spectators or by the amount of economic activity generated by spectators and those directly involved in the competition" This statement does not do justice the rest of the report...

 

 

They also need to address the points made in these easily 'googlable' reports which rip apart the methodology of economic multipliers and assoc benefits..

"Cities routinely offer to spend large sums of money in order to attract these events in large part

based upon these exaggerated claims of an economic bonanza, but a skeptical public should

beware of economists bearing reports showing great benefits from mega-events"

 

"Critics of economic impact studies that purport to show that mega-events such as the

Olympics bring large benefits to the communities "lucky" enough to host them frequently cite

the use of inappropriate multipliers as a primary reason why these impact studies overstate the

true economic gains to the hosts of these events. This brief paper shows in a numerical example

how mega-events may lead to inflated multipliers and exaggerated claims of economic benefits." - http://209.16.100.8/..._MegaEvents.pdf

 

 

Plus others - http://www.imf.org/e...f/zimbalist.pdf

 

http://www.newstates...h-africa-events

 

 

As said hopefully a first draft, a bit a re-write, inc some vision of the event and post event, and should come up well... go SF

 

Nothing loike polishing a turd! biggrin.gif

Share this post


Link to post
Share on other sites

Sorry to say, but this sort of material and analysis is the standard preliminary to a financially backed bid being placed (bearing in mind that prior to 2007, there was no such thing as venue rights fee, and GGYC gets placed in the tricky position of demanding a venue fee from their home town - which can get very awkward. It is more likely that there will be no venue fee for SFO, but all commitment on infrastructure. However that gets difficult if other exotic venues start ponying up large amounts for the venue fee, with the same commitments on infrastructure.)

 

The politicians need a document like this to be able to justify pumping money and resources into the event. It is just a matter of being able to justify how much and when.

 

It doesn't mean that SFO has the event, although everyone would be gob-smacked if that were not the case.

 

The document is really just the blank check on which the numbers and dates will be written.

 

The only thing that could pull it down would be knowledge of a low competitor turn out - which has been offset to some extent by saying there is only limited space available (8-10 challengers) and the preliminaries can be held elsewhere, like Valencia which does have the existing infrastructure for the European and established teams, while SFO comes together.

 

It will be interesting with the preliminaries if they run off the Volvo model of having a CSS counting event (VOR=Stopover), if you have a boat entered in the AC, or if it is just some money driven junket, designed solely for the pleasuring of event sponsors.

 

RG

Share this post


Link to post
Share on other sites

I hope it didn't contain the huge exaggerations these reports usually try to sell to people as being the truth, like spectator numbers and such.

 

 

If anything the report is objective and steers clear of making any outlandish claims.

 

Don't want to rain on the parade and just glanced through the document before it got locked, BUT I found it singularly underwhelming - something a couple of summer interns might put together over the week-end.

Granted, my pauperist self may have been put off by the assumption that AC visitors will stay in $180 a night hotels -while I've never disbursed more than $70 in off-airport motels.

 

But the gist seems to be: as previously mentioned by alert SA readers, SF hotel occupancy is already at 85% over the summer. Ergo, the AC would just bring in saturation in terms of hotels / restaurants - an admittedly questionable plus. OTT, there's team and ACRM local expenditures, but I'd tread very carefully there.

 

OTOH, the City is only asked to invest $100M in infrastructure - presumably redoing the pier piling, something it would have to do sooner or later to remove an eyesore - and that could be recovered from the post-AC permanent commercial exploiter.

 

On the face of it, a sweetheart deal for the City and one it should grab eagerly - assuming it's not irredeemably balkanized.

 

I keep noticing there's no mention of venue money. Fine, as long as somebody else takes care of this insignificant detail ..

Share this post


Link to post
Share on other sites

This report is great fun.. the deal must have been done, with this as a bit of paper to wave around..biggrin.gif

Clearly I am missing something because I cannot understand why people should assume that because this report has been written, a deal must have been done. Surely a report like this must be the first thing anybody would want to see when trying to decide how much to put into their bid to host the event. Every city bidding will have one of these reports. It certainly wouldn't be commisioned after the fact!

 

Now, I accept that one might read something into the fact that it was even posted anywhere, but it seems a little premature to get too excited at the moment.

Share this post


Link to post
Share on other sites

This report is great fun.. the deal must have been done, with this as a bit of paper to wave around..biggrin.gif

Clearly I am missing something because I cannot understand why people should assume that because this report has been written, a deal must have been done. Surely a report like this must be the first thing anybody would want to see when trying to decide how much to put into their bid to host the event. Every city bidding will have one of these reports. It certainly wouldn't be commisioned after the fact!

 

Now, I accept that one might read something into the fact that it was even posted anywhere, but it seems a little premature to get too excited at the moment.

 

If you are going to spend hundreds of millions of taxpayer dollars. Esp with such high UE rates in US. You would need a much more detailed report, that does outline the 'risks', the full societal impact, opportunity costs, details whether the jobs will all be for Barristas over a weekend? etc etc etc..

 

This report does NOT do that, however does have reams of figures which seem to be after a casual read pretty much unsupportable.. though will impress those who like figures!!

 

So either must be a very rough 'draft' or those involved might have been given the 'nod' and are skimping on a report that they can honestly expect to stand up to public scrutiny..

 

I can see it now.. the mayor on the steps of the town hall.. The Cup, The Cup, We will host the cup, billions of dollars of incoming cash!, everybody will have a job, no more homeless etc etc, whilst waving around this doc!!..

Perhaps I am just getting too cynical! but then again is the AC! - the greatest experts in this game of 'economic benefits' would be the teams themselves no?

 

SF would be great so I hope they do a final draft that will do justice to their 'investment'

 

 

biggrin.gif

Share this post


Link to post
Share on other sites

This report is great fun.. the deal must have been done, with this as a bit of paper to wave around..biggrin.gif

Clearly I am missing something because I cannot understand why people should assume that because this report has been written, a deal must have been done. Surely a report like this must be the first thing anybody would want to see when trying to decide how much to put into their bid to host the event. Every city bidding will have one of these reports. It certainly wouldn't be commisioned after the fact!

 

Now, I accept that one might read something into the fact that it was even posted anywhere, but it seems a little premature to get too excited at the moment.

 

 

It's not that anybody thinks this is a 'done deal' but that the proposal seems very strong, positive, and the agencies are on-board with making this work if possible. It is a large hurdle to be crossed before SF can seriously be considered as the venue, which GGYC and BOR want.

 

A solid start with a ways to go yet...............................

Share this post


Link to post
Share on other sites

It's not that anybody thinks this is a 'done deal' ....................

Have you read the front page. Look under the heading "done deal". Then read what has been posted above. For instance, snorky says

 

the deal must have been done

 

Now, do you wish to rethink your statement :P

Share this post


Link to post
Share on other sites

It's not that anybody thinks this is a 'done deal' ....................

Have you read the front page. Look under the heading "done deal". Then read what has been posted above. For instance, snorky says

 

the deal must have been done

 

Now, do you wish to rethink your statement tongue.gif

 

 

Wrong word choice............should have been 'everybody'.

 

 

Do you believe everything from the front page?wink.gif

 

 

So we have what...............two out of how many that are jumping the gun?

Share this post


Link to post
Share on other sites

Do you believe everything from the front page?wink.gif

Shouldn't that read "do you believe anything from the front page :D

Share this post


Link to post
Share on other sites

As others have suggested, above, there's simply no science behind the concept of economic return resulting from the massive spending necessary to entice a private event. Worse yet, there's plenty of analysis of such reports that debunk most of their claims. That's not to say that there's no return, just that no one knows what the return is or how it can be accurately measured.

 

And there are plenty of clear instances of such spends resulting in massive, long-standing economic disasters.

 

I continue to maintain that while San Francisco Bay is an ideal venue for racers, it's not very practical for spectating. I'm ambivalent about it as a host city for the AC, largely because I believe that sailing (thankfully) isn't appealing to the masses and I don't believe that AC34 will change that.

 

As I've said before, there's simply no rationale that can possibly justify a spend of even $100M by the City of San Francisco, the County of San Francisco, the State of California or the Federal Government for a sporting event.

 

If you advocate spending the money, at least be realistic and position it as a special-interest hand out that might generate some international je-ne-sais-quoi at a time when the country clearly needs some. But please don't insult us by trying to suggest it's a wise investment with solid return given the current state of affairs in San Francisco, California and the USA.

 

Good grief!

Share this post


Link to post
Share on other sites

sailing (thankfully) isn't appealing to the masses and I don't believe that AC34 will change that.

WTF? This is a seriously bad attitude. Sailing will never hit the big time with this mindset. The rest was correct on state expenditure. They'll spend your money quick enough to get a junket that makes them feel good about themselves but can they guarantee a legacy? No way unless they have an end user lined up before kick off. The "AC Village" area will be cleaned up and the taxpayer will be cleaned out at massive expense by favored state contractors and leave the taxpayer with a headache.

Share this post


Link to post
Share on other sites

As others have suggested, above, there's simply no science behind the concept of economic return resulting from the massive spending necessary to entice a private event. Worse yet, there's plenty of analysis of such reports that debunk most of their claims. That's not to say that there's no return, just that no one knows what the return is or how it can be accurately measured.

 

And there are plenty of clear instances of such spends resulting in massive, long-standing economic disasters.

 

Very well said

 

I continue to maintain that while San Francisco Bay is an ideal venue for racers, it's not very practical for spectating.

 

Why? I was already picturing myself with binoculars at Vista Point ..

 

 

I'm ambivalent about it as a host city for the AC, largely because I believe that sailing (thankfully) isn't appealing to the masses and I don't believe that AC34 will change that.

 

The last of the great optimists, uh? biggrin.gif

 

As I've said before, there's simply no rationale that can possibly justify a spend of even $100M by the City of San Francisco, the County of San Francisco, the State of California or the Federal Government for a sporting event.

 

If you advocate spending the money, at least be realistic and position it as a special-interest hand out that might generate some international je-ne-sais-quoi at a time when the country clearly needs some. But please don't insult us by trying to suggest it's a wise investment with solid return given the current state of affairs in San Francisco, California and the USA.

 

Aw c'mon, $100M is chump change by today's standards - and it doesn't go toward a white elephant but to redoing piling that would be needed anyway - and can be recouped immediately after the event (meaning when Oracle loses and the Cup moves elsewhere tongue.gif )

I realize the November elections will probably save the US from the current socialist abyss (or is it nazi, PA is split on that) and Carly Fiorina likely hates Larry's guts, but if SF cannot come up with that measly amount then let's forget the whole idea and go back to VLC.

AND it's got to be from the City, State, Federal, CIA Black Fund for all I care - but leave the "special-interest hand outs" to provide financial support for the teams.

Share this post


Link to post
Share on other sites

Who really cares if the AC is #3 or #53. Bottom line here is that the Cup will be raced HERE in the Good Ole US of A !!!! Let's put things in perspective....imagine if Valencia was picked ?? or some A-Rab hell hole ??? Than you all would really have something to Bitch about. So PLEASE stop your whineing!!

 

If you want to see the "New" AC your gonna have to go to San Fran.....pack your bags!!

Share this post


Link to post
Share on other sites
If anything the report is objective and steers clear of making any outlandish claims.

 

 

Such as: "America's Cup is the third largest sporting event"? lolololololol

Share this post


Link to post
Share on other sites

This study was the definitive facts-based look-back at AC 32 Valencia. By any measure, the impact was huge:

 

http://www.ivie.es/n...1.php?idioma=EN

 

"The study estimates that the total impact on the Valencian Economy's income is of 2,767.9 million euros, with the creation or sustainability of 73,859 jobs in three years."

 

The Allianz Report suggested even larger numbers

http://www.gizmag.com/go/7306/

 

 

The draft we saw (which I do not expect will change much, if any) pointed out the population difference between the SF and Valencia regions, in discussion of possible local attendance. It was something like 7.5 million versus 2.3 million. The $1.4B figure is big, but even ~if~ they were off by 40% somehow (seems very unlikely.. being largely based on the above actual-numbers study) then the overall impact is ~still~ big!

 

Since the city of SF had the independent Bay Area Council commission the study (who in turn used Beacon Economics) then as the client, the city will likely announce the results, during their business hours on Monday.

 

I bet the EI Report gets a lot of coverage, this is potentially a big deal even for a SF.

Share this post


Link to post
Share on other sites

I am very suspicious WRT these reports, have seen too many of them and even contributed too much to similar reports, to not to know the backgound, agendas and real purposes. Nevertheless I like the trueley conservative, even careful estimates.

 

One big shortfall tho is that the whole report is based on other reports (VLC and Auck) for comparison and basic figures, and we may assume that these contain extreme exaggerations to justify the investments made. In addition and by the nature of the game, all figures are estimations which are based on either the already mentioned previous reports or... on what? I am afraid that there is actually no real content; and that malicious minds wouldn't have a hard time to prove the contrary of what the report wants to achieve.

 

A big thanks to those Anarchists who provided me the info and ruined my Sunday, which I now spent reading this thing ;).

Share this post


Link to post
Share on other sites

A flashback to what Michael Cohen of the SF mayor's office told Stuart Steuli recently:

 

--

 

SS: How do you balance what the city will put into this versus what you will get back?

 

Cohen: One of the things we are doing is we've commissioned an Economic Impact Analysis that's being done as we speak, to be able to more directly quantify the economic impacts. But there are a number of folks who believe, and we are going to vet this, that the AC is third only to the Olympics and the WC for having the most profound economic impact. Because SF is such a beloved destination already and because it provides such a spectacular venue for spectators related to sailing, we believe that the potential is there for this to be the most watched America's Cup by a huge margin.

 

--

Share this post


Link to post
Share on other sites

If you really want to get down to brass tacks, we really don't know how much or how little the AC will affect SF or anywhere.

 

On thing to consider when looking at the report and the previous numbers used to base it on is this:

 

The world-wide economy was much different in '03 & '07; '03 on the up-swing side, '07 on the early stages of the down-swing. Money was flowing much better back then.

 

We have no clue yet to where the economies will be in '13 or '14 when the 34th is held. Just look back to the malaise of the '70's and if we continue through this decade as it did back then, then the numbers will most likely be way off.

 

If SF is smart in how they invest for this event, putting in facilities with a planned after-life beyond the America's Cup, then this event can be held and provide a value to the city. If they get too specific in the infrastructure for the AC teams and support functions, then re-re-development will be a cost at some point in the future.

 

The event can be a boon for SF, if they play their cards right and do things smart.

 

 

 

 

Share this post


Link to post
Share on other sites

"$100M is chump change"

 

Well it's 1,500 teachers, firemen and policeman's jobs which SF and CA are losing. That money goes right into the economy with known high economic multipliers.

 

Ellison should kick in the $100M and be able to recoup on sale of the piers and infrastructure afterward or ten years from now if GGYC keeps winning. If there really is a positive economics too it, a smart business man like Ellison would see it. If Ellison doesn't see a nice return, it's not there. The economics for cities to invest in sports is not there as many well done economics researchers have demonstrated again and again.

 

I'm a big AC fan and hope it's in SF but Ellison could put up the $100M to build the venue without breaking a financial sweat and, guaranteed by the city to share in commercial resale of the venue in the future, it is just a good long term investment for Ellison.

 

 

Share this post


Link to post
Share on other sites

I am very suspicious WRT these reports, have seen too many of them and even contributed too much to similar reports, to not to know the backgound, agendas and real purposes. Nevertheless I like the trueley conservative, even careful estimates.

 

One big shortfall tho is that the whole report is based on other reports (VLC and Auck) for comparison and basic figures, and we may assume that these contain extreme exaggerations to justify the investments made. In addition and by the nature of the game, all figures are estimations which are based on either the already mentioned previous reports or... on what? I am afraid that there is actually no real content; and that malicious minds wouldn't have a hard time to prove the contrary of what the report wants to achieve.

 

A big thanks to those Anarchists who provided me the info and ruined my Sunday, which I now spent reading this thing wink.gif.

 

Fortunately, or unfortunately, I haven't read the report. Shame on Stingray. Anarchy tamed for a few tainted bucks...

 

In any event who are these people:

 

About the Bay Area Council

The Bay Area Council is a business-sponsored, public-policy advocacy

organization for the nine-county Bay Area. The Council proactively advocates for

a strong economy, a vital business environment, and a better quality of life for

everyone who lives here.

 

I would not expect these businesses (list at their website) to do anything but pump the prospects of the bay area as a host city. Wild speculation of benefits, why not? No real downside, but of course there isn't any downside!

Share this post


Link to post
Share on other sites

page A1, SF Chronicle

--

 

 

America's Cup in S.F. a $1.4 billion anchor

 

by JOHN COTE, San Francisco Chronicle

 

Sailing may not be as popular as football in this country, but hosting the world's premier regatta would pack at least three times the economic punch for San Francisco as a Super Bowl.

 

That's the assessment of a new economic study obtained by The Chronicle that found that holding the next America's Cup here in either 2013 or 2014 would infuse $1.4 billion into the Bay Area's economy - the vast majority of it in San Francisco - and generate 8,800 jobs, from prep cooks to engineers. Hosting a Super Bowl generates between $300 million and $500 million on average.

 

All told, including statewide and national impacts like extended tourism, the series of yacht races in San Francisco Bay would generate $1.9 billion in economic activity and create about 12,000 jobs, according to a city-commissioned report by the Bay Area Council Economic Institute and Beacon Economics, which is to be released today.

 

"This is not just a big deal for San Francisco," Mayor Gavin Newsom said. "It's a big deal for the entire state of California, and, one could argue quite appropriately, for the country."

 

The figures are notably less than the $9.9 billion projected in a report that international insurance conglomerate Allianz Group released in 2007. That report included about $4.5 billion from future tourism and tech investment after the race, factors that the economic institute's analysis does not count.

 

While taking note of that earlier study, the authors of today's report said they "consciously made an effort to be conservative in our analysis" and focused on "direct, quantifiable benefits."

 

"We asked these economists to take a conservative approach, because even under the most conservative scenario, the benefits of this event are quite staggering," said Michael Cohen, head of the city's economic development office. "We want to make sure the economic benefits to San Francisco are reliable and certain."

 

The 159-year-old sailing race ranks behind only the Olympics and soccer's World Cup in terms of spectators and economic activity, said the report from the council, a privately supported public policy group.

 

Software billionaire Larry Ellison, who owns a home in San Francisco and whose BMW Oracle Racing team captured the cup in February in races off the coast of Valencia, Spain, has said he's eager to bring the contest to his home waters for the first time. As winner of the last cup, Ellison's team, sponsored by San Francisco's Golden Gate Yacht Club, gets to choose where to defend it.

 

But Ellison, co-founder of Redwood City's Oracle, is committed to picking the best venue for the 34th America's Cup, a team spokesman said. Spain, Italy, France and Portugal are also vying for the coveted race. A venue should be chosen by the end of the year.

 

 

Years of benefits

 

A main economic driver behind hosting the competition for the oldest active trophy in international sports is the several hundred staff members from the various racing teams and their families that generally move to the area, sometimes up to two years before the competition, the new report said.

 

Those extended crews, along with potentially millions of spectators, would patronize hotels, restaurants and stores, the report said. Piers would be upgraded to host the boats and their crews - infrastructure benefits that would remain with the city for years to come. Piers 30-32 and Pier 50 are the leading sites for a sailing village.

 

The city would also be showcased to an international television audience watching the contest play out in the shadow of the Golden Gate Bridge.

 

Ten or more boats typically compete over a period of months prior to the main contest, and qualifying events all over the world are envisioned over the next several years.

 

Just how many races will be held at the cup's host city is still under negotiation, said Tim Jeffery, spokesman for BMW Oracle Racing.

 

The report found that if the pattern largely seen over the past 30 years, including in 2007 when the cup was also held in Valencia, holds true, "it seems reasonably clear that the bay would see perhaps a month of racing in each of the years leading up to the America's Cup and between three and four months of racing in the final year."

 

In terms of output, the economic impact of the 2007 America's Cup in Valencia was just shy of $7 billion, according to the Valencian Institute of Economic Research.

 

A three-month competition would attract 2.6 million spectators on top of the city's usual tourist draw, according to the analysis. The net boost to San Francisco's general fund is projected at more than $13 million in tax revenue alone.

 

 

Races' ripple effects

 

There would also be economic spillover around the Bay Area, in part because of different vantage points and regional attractions, said Sean Randolph, president of the council's economic institute and co-author of the report.

 

"There is a great likelihood that people will come and stay longer," Randolph said. "They'll say, 'Oh, we'll go to the race and then we'll spend a day in Napa.' "

 

The natural amphitheater of the bay also allows for a much greater viewing audience than previous cups held miles offshore, which would only boost interest in a sport that Ellison is keen to promote, Randolph said.

 

San Francisco Supervisor Michela Alioto-Pier, whose northern waterfront district would offer a front-row seat to races between the Golden Gate Bridge and Alcatraz, said securing the cup, and hosting it for years as other cities have done, would "put San Francisco into a different league as an international city."

 

"We're already considered a fabulous little jewel," Alioto-Pier said. "This would make San Francisco one of the major cities of the world."

 

 

 

 

Chasing the America's Cup: Events' estimated economic impacts

 

 

[continued]

 

This article appeared on page A - 1 of the San Francisco Chronicle

 

 

Read more: http://www.sfgate.co...L#ixzz0u8Pi76OG

Share this post


Link to post
Share on other sites

In terms of output, the economic impact of the 2007 America's Cup in Valencia was just shy of $7 billion, according to the Valencian Institute of Economic Research.

 

Funny how one ludicrously inflated claim is used to justify another.

Share this post


Link to post
Share on other sites

In terms of output, the economic impact of the 2007 America's Cup in Valencia was just shy of $7 billion, according to the Valencian Institute of Economic Research.

 

Funny how one ludicrously inflated claim is used to justify another.

 

 

C'mon Dogwatch, you can't be such an arse. Didn't you read that they expressly asked the authors to be conservative? No one in its right mind would imply they failed to follow anything but the strictest methods of analysis.

Share this post


Link to post
Share on other sites

In terms of output, the economic impact of the 2007 America's Cup in Valencia was just shy of $7 billion, according to the Valencian Institute of Economic Research.

 

Funny how one ludicrously inflated claim is used to justify another.

 

 

C'mon Dogwatch, you can't be such an arse. Didn't you read that they expressly asked the authors to be conservative? No one in its right mind would imply they failed to follow anything but the strictest methods of analysis.

I'm sure a lot of people are skeptical of the numbers, and will also assume that the report is intended to help the city, and is therefore motivated to exaggerate the numbers.

 

But that after-the-fact Valencia study had no such motivation. And the numbers were gigantic! I remember filling out a questionnaire while there in 2007 (and remember the tens of thousands of daily visitors clicking through the turnstiles even during the RR's) - they did not pull the data from thin air.

 

The report should be made available again here shortly:

 

http://www.bayeconfo...ypub.html#EANAL

Share this post


Link to post
Share on other sites

Didn't you read that they expressly asked the authors to be conservative?

 

I read many things and alas not all of them are true. The "3rd biggest sporting event by spectator number" is obvious bullshit - not invented by these authors but bullshit none the less - and means the rest requires a critical reading rather than blind acceptance, if indeed one cares whether it's true. If you begin with the premise the event should be in SF then maybe any good propaganda will do. I don't much care where the event is run but I happen to find the economic arguments and quantification thereof an interesting topic in itself.

Share this post


Link to post
Share on other sites

If you begin with the premise the event should be in SF then maybe any good propaganda will do.

 

You may have stumbled upon a significant factor here.

 

I am trying to find the 7 billion valencia study. This one shows just a meager 1.5billion from 2005 to 2007 using a rather questionable method.

http://www.revecap.com/encuentros/anteriores/xeea/trabajos/f/pdf/027.pdf

Share this post


Link to post
Share on other sites

If you begin with the premise the event should be in SF then maybe any good propaganda will do.

 

You may have stumbled upon a significant factor here.

 

I am trying to find the 7 billion valencia study. This one shows just a meager 1.5billion from 2005 to 2007 using a rather questionable method.

http://www.revecap.c...s/f/pdf/027.pdf

In English

 

http://www.ivie.es/n...1.php?idioma=EN

 

speaking in Euros,

 

"To sum up, the holding in Valencia of the America's Cup has involved an injection of

expenditure of such magnitude that it meant an annual increase for three years of

around 1% of the GDP and of the employment of the Valencia Region, generating

an accumulated total of 5,748 million in output, 2,724 million in value added and

73,859 jobs during the period 2004-07."

Share this post


Link to post
Share on other sites

But that after-the-fact Valencia study had no such motivation.

 

Really? There's post-hoc justification for decisions made by politicians who find themselves under scrutiny and there's justification for possible upcoming events. By all accounts Valencia is bidding for AC34 and presumably dusting off this kind of report in search of subsidy.

 

And the numbers were gigantic!

 

Yes and if you analyse them against quoted visitor numbers and team spending in the locality - which I once took the trouble to do - the total figure is deeply implausible.

 

It is also easy to forget that the only relevant figures are the incremental ones. If TO rents 100 houses in SF and they each spend $100K a year, that's only $10M if the houses would be otherwise unoccupied or occupied by households spending significantly less. Same goes for hotel rooms etc. There's also the fallacy of assuming that all AC-visitors are unusually wealthy and free spending. Some certainly are but there just aren't enough of them to generate $Bs worth.

Share this post


Link to post
Share on other sites

 

Sorry to say, but this sort of material and analysis is the standard preliminary to a financially backed bid being placed (bearing in mind that prior to 2007, there was no such thing as venue rights fee, and GGYC gets placed in the tricky position of demanding a venue fee from their home town - which can get very awkward. It is more likely that there will be no venue fee for SFO, but all commitment on infrastructure. However that gets difficult if other exotic venues start ponying up large amounts for the venue fee, with the same commitments on infrastructure.)

 

 

Had overlooked this gem, which pretty much sums it up. Inded, VLC would need zero new infrastructure, and Rita might conceivably duplicate the previous, AC32 €100M venue money even under the present, austere circumstances - and that would go a long way toward financing the challengers, with the balance coming from media rights.

 

I hope SR will not go ballistic again, but the hard fact is without 6-8-10 challengers there's no event, and that does require financing them to the tune of $200M collectively - mind you, this still leaves each of them having to find $30M from their own sponsors, definitely not a given.

 

You say I'm wrong and there are 6 fully/independently funded challengers? Well, if that is the case we'll know soon enough because the first thing they'll already have said is "let's forget this multihull crap" - the second being "you know what, we'd much prefer VLC" ..

 

So, Larry's getting his way depends on how big the purse money he can dangle is.

 

 

"$100M is chump change"

 

Well it's 1,500 teachers, firemen and policeman's jobs which SF and CA are losing. That money goes right into the economy with known high economic multipliers.

 

Ellison should kick in the $100M and be able to recoup on sale of the piers and infrastructure afterward or ten years from now if GGYC keeps winning. If there really is a positive economics too it, a smart business man like Ellison would see it. If Ellison doesn't see a nice return, it's not there. The economics for cities to invest in sports is not there as many well done economics researchers have demonstrated again and again.

 

I'm a big AC fan and hope it's in SF but Ellison could put up the $100M to build the venue without breaking a financial sweat and, guaranteed by the city to share in commercial resale of the venue in the future, it is just a good long term investment for Ellison.

 

Thanks for the post - found it irritating on first reading, but then recognized it as the voice of sanity. Trouble is, the entire economic model we seem to have adopted is running forward ever faster, to avoid falling down ..

Share this post


Link to post
Share on other sites

If you begin with the premise the event should be in SF then maybe any good propaganda will do.

 

You may have stumbled upon a significant factor here.

 

I am trying to find the 7 billion valencia study. This one shows just a meager 1.5billion from 2005 to 2007 using a rather questionable method.

http://www.revecap.c...s/f/pdf/027.pdf

In English

 

http://www.ivie.es/n...1.php?idioma=EN

 

speaking in Euros,

 

"To sum up, the holding in Valencia of the America's Cup has involved an injection of

expenditure of such magnitude that it meant an annual increase for three years of

around 1% of the GDP and of the employment of the Valencia Region, generating

an accumulated total of 5,748 million in output, 2,724 million in value added and

73,859 jobs during the period 2004-07."

 

That's nice. I think I spot a problem. So we have two studies by different people coming to wildly different outcomes, and add that allianz people and we have three for the price of two. Both use the same questionable method.

 

And, mind you, something like 75% of those 6 billion are caused by government investment which they rate at something like 3 billion. Laughable. I don't think people accepted that kind of multiplier when discussing the obama stimulus package.

Share this post


Link to post
Share on other sites

And, mind you, something like 75% of those 6 billion are caused by government investment which they rate at something like 3 billion. Laughable. I don't think people accepted that kind of multiplier when discussing the obama stimulus package.

True, and the projection in one of them (I forget which) suggested that VLC, with a $100M investment for an AC33 event instead of all they invested in '07, would stimulate 'just' E1.5B in spending next time next time. Same general scale as this study's SF number.

 

Much of the public investment in VLC was from the regional and from the national government. When the money coming in is external, as opposed to it being just stirred around inside the same pot, then the effects are a lot larger. Once long ago at university, I helped a professor Fortran-program an econometric model that attempted to accurately and honestly show the impact of increases and decreases, by industry and local regions, of US Navy spending in Honolulu. The initial ripple is big, it being almost all external money. The subsequent ripples are therefore larger too, than if the initial money had come from the city. I think this explains why the 2007 look-back shows such a huge impact, and why the projections (because of the infrastructure now already in place) suggest a smaller investment, and return, for a possible AC33 in Vlc.

 

The big picture for me is that fact that for AC 32 there were 60 cities who entered the sweepstakes. The final 4 were presumably all very strong contenders, and the winner did invest hundreds of millions to get it. It's not like cities normally turn these opportunities down.. Look at the power behind the RI effort (city, state, US senators) - they would have offered the moon if they could. And now we have rumors of big bids from 4 European cities again (almost the same final 4 as last time if the SF Chron list was accurate with 'Naples' for the Italian one) - so again: We can argue some of the tabled figures but this is the kind of event that cities want... Real badly!

 

Gavin N. should be thrilled with this report, even if it is far more conservative than all the others.

Share this post


Link to post
Share on other sites

 

 

Since the city of SF had the independent Bay Area Council commission the study (who in turn used Beacon Economics) then as the client, the city will likely announce the results, during their business hours on Monday.

 

I bet the EI Report gets a lot of coverage, this is potentially a big deal even for a SF.

 

The Bay Area Council is anything but 'independent'. It's a shill group, a quasi-'advocacy' and PAC for developers. The developers and unions (who control SF politics) always want to build something - anything. There's not much opportunity at the moment to build housing, hotels, or commercial properties, so they are jumping on this anomaly of a development oppty.

 

The implied models used in the Beacon study are based on RIMS-II multipliers that are typically standardized by county. I would imagine then that SF's standard multiplier is 2. (Contra Costa County is 2.85 - and that's because so many union workers live in CoCoCo).

 

All in all, the RIMS-II model is a very out of date and inaccurate methodology. The study should have depended a little more heavily on empirical data - both recent mega-event data and SF tourism data. But the purpose of the study as others have pointed out is to bolster political will.

Share this post


Link to post
Share on other sites

Since the city of SF had the independent Bay Area Council commission the study (who in turn used Beacon Economics) then as the client, the city will likely announce the results, during their business hours on Monday.

 

I bet the EI Report gets a lot of coverage, this is potentially a big deal even for a SF.

 

The Bay Area Council is anything but 'independent'. It's a shill group, a quasi-'advocacy' and PAC for developers. The developers and unions (who control SF politics) always want to build something - anything. There's not much opportunity at the moment to build housing, hotels, or commercial properties, so they are jumping on this anomaly of a development oppty.

 

The implied models used in the Beacon study are based on RIMS-II multipliers that are typically standardized by county. I would imagine then that SF's standard multiplier is 2. (Contra Costa County is 2.85 - and that's because so many union workers live in CoCoCo).

 

All in all, the RIMS-II model is a very out of date and inaccurate methodology. The study should have depended a little more heavily on empirical data - both recent mega-event data and SF tourism data. But the purpose of the study as others have pointed out is to bolster political will.

 

On this part, while not arguing against it being the case they do have a lot of expertise employed in their economic forecast models. The companies they use, particularly Beacon Economics, seem very well respected.

 

You can get a sense of it in, for example, the Bay Area Economic Forecast 2008–2009 at here, which by the way sees a good turnaround by most measures starting early next year, with proof of their past forecasts accuracy superimposed on the historical actual data for graphs, like employment and building activities. They are definitely sophisticated modelers, nothing like the Fortran cards (yikes!) that I once juggled.

 

http://www.bayeconfor.org/keypub.html

Share this post


Link to post
Share on other sites

In terms of output, the economic impact of the 2007 America's Cup in Valencia was just shy of $7 billion, according to the Valencian Institute of Economic Research.

 

Funny how one ludicrously inflated claim is used to justify another.

I don't know about the San Francisco claims, but this claim of $7 billion of economic activity tied to AC32 is clearly ludicrous.

Share this post


Link to post
Share on other sites

What this will all come down to is the yin and yang of what the challengers/competing syndicates want vs. what the Defender wants, and how a venue's bid shapes up to best meet both sides of the equation. And typically what the challengers/competing syndicates want/need winds up having the upper hand.

 

Sponsored syndicates run on fairly tightly confined budgets. Since personnel costs are one of the bigger pie slices in the budget, syndicates look to venues that have a manageable cost of living,and look more favorably on venues that are sensitive to personnel needs. VLC offered tax breaks for both the syndicates' operations and personnel income tax. You won't get that in SF.

 

You could bike to work in VLC and AKL, but in SFO only a few would be able to bike to work if everything is self contained in the city. The rest will be sitting in traffic trying to get over one of the bridges.

 

Syndicates also prefer venues that support efficient logistics at a reasonable cost. If the effective hourly labor rate for logistics operations (boat building, moving, storage, etc.) is $130/hour in one location vs. $60/hour in another, it makes a big difference. A large portion of the logistics man/hour costs is a function of how efficient the transportation infrastructure already is. SF would be

OK on that front, but just OK, unless they get creative...

 

For these reasons, there is justification for a defender to go full dictator - as Alinghi did in AC32 - to negotiate a favorable pact with the local gov't, ensure decent logistics, and collect as much media revenue as possible. For SF in particular, media revenue will be important to help ease the sting of the cost to operate teams here.

 

SF will be hard pressed to offer or prove event specific tourism that would be on par with event specific tourism for an AC that would be generated in Europe. What SF has to offer is foot traffic generated by the standard destination tourism of SF, plus some uplift to that number from enthusiasts who can travel here conveniently. To capture the destination tourists they have to locate somewhere that is convenient to the tourists' standard visiting paths - and that is the key problem with anything south of Pier 32.

 

For the SF package to really work, compared to packages that come from Europe loaded with tax breaks and per visitor spend rates that are typically quite high - then they will have to show a very sizeable media revenue number, and very very efficient logistics.

Share this post


Link to post
Share on other sites

What this will all come down to is the yin and yang of what the challengers/competing syndicates want vs. what the Defender wants, and how a venue's bid shapes up to best meet both sides of the equation.

 

As far as defenders go, I suspect TO would find SF an easier pitch to sponsors than the other suggested venues. Historically, British challengers found good sponsorship value in Newport in terms of networking opportunities and I think the same would apply to SF. At a guess, ETNZ sponsors might also favour a Pacific rim venue. I imagine other potential challengers would find a European venue would generate more sponsor interest.

Share this post


Link to post
Share on other sites

The America's Cup is the world's third-largest sporting competition, after the Olympics and soccer's World Cup.

 

 

Complete and utter nonsense. This clearly demonstrates these authors will write any amount of bullshit and twist it into any possible interpretation to make their point. The whole report should be looked upon as total rubbish.

 

Third largest sporting competition, yet they could barely get anyone to show up with their cameras for live TV. They had to pay TV to come. A grand total of almost nobody watched it. True enough, they spent shitloads of money on the event, and true enough Joe's Crab Shack in San Diego had a few new customers, but I'll bet the Marriot next door did even notice them being in town. The economic impact was nearly fucking nothing - in San Diego. I am sure too, it was rather modest in Valencia - a race in the winter when sailors were in the hats and full jackets. It was flipping 8 C those days. Again, no economic impact worth measuring.

 

What a fucking joke this report is - and I haven't even got past the first line! If this report landed on my desk to sway my vote, I'd definately vote 'no' as nothing else in the report could be believable either. Way to lose the trust from the get-go

 

 

 

Yes, very immature to start down that path. About 15 years ago I was doing large event statistics and the true economic impact of these events. Actual numbers/money/attendance never came close to the numbers claimed by the organizers and almost half cost more than what was taken in. The events ranged from the SB and other large sporting events, concerts/festivals and so on. I participated in about 65 large fact gathering and economic impact studies. Best way to have ROI is to not invest, let the surrounding communities absorb the overflow of hotel, restaurant bookings etc. Once the funding starts coming from the city or state you end up getting very little for money invested. And once the tax breaks are given then its money just being taken away from cleanup and policing. If you truly want the AC to happen and keep happening years to come just have it at venues that can handle the event today.

Share this post


Link to post
Share on other sites

Yes, very immature to start down that path. About 15 years ago I was doing large event statistics and the true economic impact of these events. Actual numbers/money/attendance never came close to the numbers claimed by the organizers and almost half cost more than what was taken in. The events ranged from the SB and other large sporting events, concerts/festivals and so on. I participated in about 65 large fact gathering and economic impact studies. Best way to have ROI is to not invest, let the surrounding communities absorb the overflow of hotel, restaurant bookings etc. Once the funding starts coming from the city or state you end up getting very little for money invested. And once the tax breaks are given then its money just being taken away from cleanup and policing. If you truly want the AC to happen and keep happening years to come just have it at venues that can handle the event today.

It seems to me that SF is looking at rebuilding one or two piers, for at most $60M or $120M, and then having just the BOR team alone spend ~at least that much~ in SF.

 

Instead of them spending it elsewhere.

 

Isn't it about that simple a break even??

 

The issue always seems to be "well who benefits, and so who should help pay?" but in this case we have, so far, not seen for example additional hotel-room taxes proposed. The $100M is proposed to come largely through whatever/private model that the baseball stadium was funded through. And actually I don't care how they raise it (since I don't live there, or rent rooms there very often on my own dime) and so... so long as it breaks even that obviously then.. ? What am I missing here?

Share this post


Link to post
Share on other sites

It seems to me that SF is looking at rebuilding one or two piers, for at most $60M or $120M, and then having just the BOR team alone spend ~at least that much~ in SF.

 

Instead of them spending it elsewhere.

 

Isn't it about that simple a break even??

This is what your are missing.

 

1. San Francisco spends $100M to recondition the piers

2. BOR spends $100M, $50M is on salaries and rent in San Francisco, which is multiplied by 2x or $100M. 20% of that is spent on things that are subject to sales tax. 2.5% of the State and County sales tax rate of 9.5% in San Francisco goes to the county. So San Francisco spends $100M and they get $500K back.

Share this post


Link to post
Share on other sites

 

OTOH, the City is only asked to invest $100M in infrastructure - presumably redoing the pier piling, something it would have to do sooner or later to remove an eyesore - and that could be recovered from the post-AC permanent commercial exploiter.

 

 

If it is required that the city spend that money up front, then this could sink it for SF.

 

There will be howls of protest from many quarters that the city can't spend $100 M for a Yacht race involving Larry Ellison.

 

As I've mentioned before, the cost of doing pier repairs has been the sticking point for any development proposal along the eastern/southeastern waterfront.

 

No one will believe that there will be a return on that investment to the city, especially in a time when essential services to so many of the programs near and dear to big political constituencies in the city (like schools, homeless, seniors, kids, parks&rec, muni, etc.) are being cut to close the budget deficit.

Share this post


Link to post
Share on other sites

I continue to maintain that while San Francisco Bay is an ideal venue for racers, it's not very practical for spectating. I'm ambivalent about it as a host city for the AC, largely because I believe that sailing (thankfully) isn't appealing to the masses and I don't believe that AC34 will change that.

 

The experience of the Moet Cup in SF proves that your statement is completely without basis.

Share this post


Link to post
Share on other sites

Just up now, at the Mayor's office.

--

 

 

Press Release

Mayor Newsom & Bay Area Council Economic Institute Announce Release of America's Cup Economic Impact Report

Report finds economic impacts of America's Cup could total $1.4 billion and create 8,840 jobs.

 

7/19/10 - Mayor Gavin Newsom today announced the release of a report commissioned by the City describing the economic impacts if San Francisco is named host of the 34 th America's Cup match. The America's Cup is the world's third-largest sporting competition, after the Olympics and soccer's World Cup.

 

"Securing hosting rights to the America's Cup is a prestigious and economically significant prize for any community," said Mayor Newsom. "I am committed to the defense of the America's Cup in San Francisco."

 

The report, titled The America's Cup: Economic Impacts of a Match on San Francisco Bay, was prepared by The Bay Area Council Economic Institute (BACEI) and Beacon Economics. It provides estimates of the economic impact of an America's Cup match on the San Francisco Bay. The analysis of economic impacts is based on prior America's Cups, specifically Valencia, Spain, which hosted the 32 nd and 33 rd America's Cup regattas in 2007 and 2010, and evaluates direct quantifiable benefits which are unique to the venue of San Francisco Bay.

 

The report found that the increase in overall economic activity in San Francisco hosting the 34 th America's Cup could be on the order of $1.4 billion, almost three times the estimated impact of hosting the Super Bowl ($300-$500 million). Additional taxes alone to the City's General Fund are expected to net more than $13 million, based on more than $24 million in revenue, and an estimated $11 million in tourism related costs. The potential increase in employment surrounding the event could be on the order of 8,840 jobs.

 

"Bringing the 34 th America's Cup to San Francisco Bay would be a huge boon for the Bay Area economy," said Bay Area Council Economic Institute President & CEO Sean Randolph. "The America's Cup could easily help jumpstart the economy by generating over a billion dollars in revenue and thousands of jobs for the Bay Area. The spillover effect for the region could be substantial."

 

Oracle CEO Larry Ellison and his BMW ORACLE Racing won the 33 rd America's Cup on February 14, 2010, on behalf of the Golden Gate Yacht Club. The club and team are working closely to select the next racing location. They recently announced that San Francisco will be the sole U.S. city under consideration for the next match, scheduled for either 2013 or 2014.

 

Additional highlights from The America's Cup: Economic Impacts of a Match on San Francisco Bay include:

 

  • The economic benefits of bringing the America's Cup to San Francisco would come primarily through expenditures by racing syndicates, and through spending on hotels, restaurants, and retail and other services by both domestic and overseas visitors and Bay Area residents.
  • The economic benefits of the race will extend to the greater Bay Area, particularly the neighboring counties of Napa, Sonoma, Marin, and Alameda through related visitor and maritime activity.
  • This increase in output and employment would likely yield a benefit to the state and local government coffers of nearly $85 million.
  • Looking beyond the Bay Area, California's economy would see increased economic activity of $1.4 billion and the U.S. economy as a whole would see increased economic activity of $1.9 billion and support an increased creation of 11,978 jobs.
  • A local successful defense of the America's Cup will likely lead to additional such events in the future. San Diego, for example, was the host to three successive America's Cups in 1988, 1992, and 1995.

San Francisco's America's Cup effort has enjoyed generous donations of expertise and resources. The same is true for the report as it was funded by donations from Catholic Healthcare West, Clear Channel Outdoor, Hathaway Dinwiddie Construction, Port of San Francisco, Recology, San Francisco International Airport/San Francisco Convention & Visitors Bureau, San Francisco Chamber of Commerce, United Airlines, and URS Corporation.

 

--

Share this post


Link to post
Share on other sites

Does this link work for anyone? It does not for me, but it is posted at here.

 

 

works for me. I can see it, but not download it, that link takes me to error.

 

Cheers

Share this post


Link to post
Share on other sites

To capture the destination tourists they have to locate somewhere that is convenient to the tourists' standard visiting paths - and that is the key problem with anything south of Pier 32.

 

 

48/50 is just a very short walk from the ball park and the caltrain station at 4th st. Both are also well serviced by MUNI N-Judah line and the historic street cars that run from the ferry building all the way along the embarcadero to Pier 39/Acquatic Park/Fort Mason race viewing areas. Having the AC in these venues would turn the entire length of that stretch of waterfront into one long continuous AC tourist stroll.

 

So those won't present a problem from your prospective.

 

Pier 80 or something at HPN redevelopment would be more problematical wrt your argument.

Share this post


Link to post
Share on other sites

It seems to me that SF is looking at rebuilding one or two piers, for at most $60M or $120M, and then having just the BOR team alone spend ~at least that much~ in SF.

 

Instead of them spending it elsewhere.

 

Isn't it about that simple a break even??

This is what your are missing.

 

1. San Francisco spends $100M to recondition the piers

2. BOR spends $100M, $50M is on salaries and rent in San Francisco, which is multiplied by 2x or $100M. 20% of that is spent on things that are subject to sales tax. 2.5% of the State and County sales tax rate of 9.5% in San Francisco goes to the county. So San Francisco spends $100M and they get $500K back.

Sorta makes sense, except for the part where the city itself is paying out $100M. If that is the case, then I missed that part too. They apparently did not even pay for the EIS. From the Mayor's office:

 

"San Francisco's America's Cup effort has enjoyed generous donations of expertise and resources. The same is true for the report as it was funded by donations from Catholic Healthcare West, Clear Channel Outdoor, Hathaway Dinwiddie Construction, Port of San Francisco, Recology, San Francisco International Airport/San Francisco Convention & Visitors Bureau, San Francisco Chamber of Commerce, United Airlines, and URS Corporation."

Share this post


Link to post
Share on other sites

OK, quick look. The report is a bloody joke. What would you expect from a report that starts by saying the AC is the third largest sporting event in the world?

 

Anyhow I should back my words with facts, but I am a bit lazy. The problem with these things is that it actually takes a lot of work to do this properly, which is a giveaway of the quality of the work these people have done. One funny figure, look at the number of expenditure of superyachts in Auckland, what's that all about.

Share this post


Link to post
Share on other sites

fresh entry by KL:

--

 

 

Wishes & Dollars, Whither AC?

By kimball | Published: July 19, 2010

 

 

Shedding more light on why a city in Italy, or Spain, or Rhode Island, or California, might want to host the next America’s Cup, the office of San Francisco Mayor Gavin Newsom today released the long-awaiting results of their economic impact report on what America’s Cup 34 could mean to the San Francisco Bay Area.

 

 

I’m on the road and don’t have time to parse the details, but the document speaks for itself. What’s even more important is a gathering momentum of believers.

 

(contd)

--

Share this post


Link to post
Share on other sites

Kadyca,

 

What was it about the Moet Cup that "proves that [my] statement is completely without basis"?

 

Please, do tell ...

 

DRTB2,

 

Interesting to hear that you believe my attitude alone will prevent sailing from reaching the masses. Frankly, I don't believe my attitude will have anything to do with it. From my perspective, sailing is what it is and the masses are what they are and he ability of anyone to draw them closer together is vanishingly small.

 

Xlot,

 

You say you're hoping the upcoming elections will save us from "the current socialist abyss" and then you seem to condone spending $100M of public funds on a yacht race for a couple of rich guys. Don't you see any irony there? Or is it just your social cause that's justified, after all?

 

Stingray,

 

You used the words "Objective, fact-based" in a sentence about an economic analysis. Surely you know better.

 

Hmmm ...

Share this post


Link to post
Share on other sites

OK, quick look. The report is a bloody joke. What would you expect from a report that starts by saying the AC is the third largest sporting event in the world?

 

Anyhow I should back my words with facts, but I am a bit lazy. The problem with these things is that it actually takes a lot of work to do this properly, which is a giveaway of the quality of the work these people have done. One funny figure, look at the number of expenditure of superyachts in Auckland, what's that all about.

 

So call it the 5th largest, or the 7th largest, or whatever. How do you measure the size of a sporting event ? How many and which metrics do you use to rank sporting events, and how accurate is the actual data anyway ?

Share this post


Link to post
Share on other sites