Friday, February 5, 2010

ICVA President & CEO Don Welsh Misrepresents Economic Effect of Colts; Prelude to Demand Taxpayers Give Up $15 Million More for Pacers?

Don Welsh, President and CEO of the Indianapolis Convention & Visitors Association is at it again. This morning he pens an editorial bragging about the economic impact of the Colts on the local economy:

The Star reported that a waiter in a Downtown restaurant cleared $500 in tips in one evening -- the equivalent of a week's work. The occasion was the busy day of the Colts' AFC divisional playoff game with the Baltimore Ravens.

The scene -- and certainly a similar result for hundreds of Downtown hospitality employees -- was repeated a week later when the Colts hosted the New York Jets in the AFC Championship game.

These were "bonus" weekends that filled Downtown hotels, restaurants and bars with an unscheduled influx of customers and cash.


The Indianapolis Convention & Visitors Association does not track spending related to the Colts. Suffice it to say, the amount was in the millions, and we were particularly delighted to lighten the wallets of all those Ravens and Jets fans.

The dishonesty of Welsh's spin cannot be overstated. There are countless academic studies out there that dispute his claim regarding the economic impact of professional sports on local economies. Don't think for a second Welsh doesn't know about them. His immediate job though is to convince the taxpayers they should pony up $15 million more for the Pacers so that the team can continue to receive all the revenue on the building that the taxpayers will to pay to operate on it. The claimed financial impact of two Colts playoff weekends are being used for that purpose.

Forget the academic studies show that would not be a good investment of tax dollars. Forget that a review of the Pacers contract shows that the penalty provision for early cancellation is so severe that the team has absolutely no leverage to demand the $15 million annual taxpayer gift. Welsh is in the business of ignoring facts and offering spin in its place. He believes his job is to get more tax dollars to the professional sports owners and to justify his $400,000 salary and benefit package which, by the way, is propped up with our tax dollars.

One such academic report was done by economics professors at the University of Maryland, entitled "Professional Sports Facilities, Franchises, and Urban Economic Development." The study cites a number of reasons why professional sports are not the economic benefit to local communities that advocates claim. The number one reason is that most spending on professional sports is local discretionary spending that is simply being moved around. If folks from Carmel attending a Colts game were not spending it in downtown Indianapolis at a restaurant, they would be spending it elsewhere, perhaps taking the family out to a movie and a restaurant. There is no net increase in discretionary spending.

Facts are pesky things which Welsh is paid with our tax dollars to ignore. Don Welsh doesn't care if there are a 1000 academic studies out there saying he is wrong, he is still going to peddle his disingenous spin as a prelude to asking Indianapolis taxpayers to open their wallets yet again.


Downtown Indy said...

And all the while, the Simon family is fighting among itself about who gets the 100's of millions left in dispute by Mel Simon's will(s).

There are 200 or so days of the year when that same waiter gets perhaps $50 in tips. So a billion-dollar stadium (combined) expenditure gives waiters a handful of gravy days each year. Is that smart money management?

And $15,000,000 is, by Don's reckoning, 30,000 'waiter-weekends' worth of tips. That's a very long ROI.

It's also fact there'd be similar bar tipping around the state on any playoff or bowl game day even without that billion we coughed up for Conseco and LOS. There are 100's of thousands of sports fans in the region. Bringing 50-60,000 more into town for a couple days is a drop in that bucket.

M Theory said...

I've left waiters big tips without needing an NFL franchise as an excuse to do it.

Blog Admin said...

I've already e-mailed in my Letter to the Editor response.

Unknown said...
This comment has been removed by the author.
Unknown said...

Interesting to compare this with situations in other markets. Here's what's going on with the Columbus Blue Jackets:

Mann Law, P.C. said...

I know waiters who have been sent home on Colts games days because no business as people do not want to fight the traffic.

Marycatherine Barton said...

Citizens, real men and women, need to start loudly demanding that Marion County politicians STOP raising their taxes, fees, filing charges, whatever the money grab is called. They need to get red blooded.