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Mega events – The good the bad or the ugly?

October 26th, 2007 by mortenappel · 11 Comments

When talking about mega events - sporting events that attract enormous attention on a global scale like the Olympics, the opinions differ greatly on what benefit the region or city amounts from hosting it.

By Claus Ascanius Melvej and Morten Appel Bækgaard

A message of world peace, great social benefit, a boost of the local economies and an increase in jobs claims to be some of the plusses.
Opponents of the mega events focus on, that it’s only for the elite, the host cities will become over-indebted and the public funds could be used better elsewhere.

Most academic studies of the economic impact on hosting these mega-events concludes that a lot of negative factors is rarely included when the economic forecasts of hosting these events is being made. Walter A Matheson, economist at the College of the Holy Cross states the following factors, rarely being included when the analysis of benefits is being made: One is what he calls the substitution effect, which covers the fact that some attendees at the sporting event spend money on the event that they might have spent on other activities instead. Matheson also claims that a lot of the money-flow does not benefit the local economy, due to the fact that the out-of-town visitors spend a substantial amount of money on hotels, car rentals and restaurant, which often is owned by national chains more than local businesses. Finally he also claims that a lot of non-economic costs like vandalism, traffic congestions and disruption of residents’ lifestyle is rarely included in the economic forecasts.

With that said, it can be good business to host events. Hosting a mega-event can have a major impact on both the image and the economy for years to come, but the cities considering to host these event should adopt the economic impact analysis with caution as it is often presented by people with a interest in the event itself. The only thing of absolute certain is that measuring the benefits from hosting these events is of such a complex nature that it will be a subject of debate for years to come.

The subject will be discussed on the conference this Monday where Markus Kurscheidt Lecture of Sport Management at the Ruhr-University, will speak about the subject. In the meanwhile we would like to hear from YOU and get YOUR take on the benefits or downsides of hosting some of the world’s biggest sporting events? We especially would like to hear from you if you have experienced the hosting of such an event in your city or region. Give the Scholars your opinion on how the life has been before, under and after.

Tags: Theme: Mega-events

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