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All-$tar influx oversold?

By Kyle Stack | Special to amNewYork

7:55 PM EDT, July 8, 2008

Understated amid the excitement over All-Star Week in New York is the estimated economic impact that its events will have on the city.

Before New York was officially awarded the game in January 2007, New York's Economic Development Commission (EDC) conducted a study that showed the game and its related events, including the All-Star FanFest, Home Run Derby and Futures Game, would have a $148.4 million impact on the city. Yet MLB.com records going back to 1996 show that no All-Star week has had more than a $65 million impact on its host city.

Just how much of a financial boon the All-Star events will be is complicated by the nature of New York, experts say.

"I do agree New York might have a higher-than-normal economic impact because this is New York, it's the last year of Yankee Stadium and because the All-Star game hasn't been in NYC since 1977," Robert Boland, a sports business professor at New York University, wrote in an e-mail message. "It isn't so much because more people will come, but because people who do come will be willing to pay more and perhaps stay longer, seeing more sites."

According to a statement issued by EDC spokeswoman Janel Patterson, the $148.4 million estimate "reflects direct spending by visitors, participants and staff on hotels, retail, transportation, entertainment and food and drink expenditures."

NYC & Company, the official marketing, tourism and partnership organization for the city, has estimated that All-Star Week will draw more than 175,000 additional people. MLB anticipates that 150,000 visitors will attend the five-day FanFest.

But Boland pointed out that the city's hotel occupancy rates and room prices, a primary component in the study, have little room to increase.

"We are almost always full and expensive," Boland wrote. "Some of the economic impact of any event in NYC is always blunted a bit, at least mathematically."

According to NYC & Company's Web site, the city's hotel occupancy rate in 2007 was 86.5 percent, nearly 20 percent above the national average. Boland said in another e-mail that the added economic benefit of the recently announced free Bon Jovi concert in Central Park on Saturday could make the $148.4 million figure "achievable."

CNBC reporter Darren Rovell has a more pessimistic view on the study.

"The thing you have to look out for in economic studies like this is displacement," Rovell said. "In other words, are they taking into account what a normal weekend or time period in New York City is and are they then subtracting that from the [original] number they came up with? The number by itself, in a vacuum, means nothing."

Rovell noted another important factor: secondary market prices for All-Star game tickets.

"You can get a game ticket for $350 when you thought it would be $1,000 because a lot of people said, 'Okay, we're going to get four tickets during this game and that's the last time we'll go [to Yankee Stadium].' "

All-Star game tickets at the 57,000-plus seat Yankee Stadium, which is sold out for the game, had face values ranging from $150 to $725, a more than 100 percent increase from last year's game in San Francisco. Tickets for other All-Star-related events at Yankee Stadium, including the Home Run Derby and Futures Game, had $50 to $650 face values.

Rovell concluded that it might never been known whether or not the city benefits economically from All-Star Week.

"Very often these numbers come out and most of the time it's not looked at again," Rovell said.