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MLB All-Star Game Is $100M Loss? Shift The Decimal Point, Economist Says

Major League Baseball’s decision to relocate this year’s All-Star Game in the wake of Georgia’s new election reform law undoubtedly has financial ramifications. But how much?
Major League Baseball’s decision to relocate this year’s All-Star Game in the wake of Georgia’s new election reform law undoubtedly has financial ramifications. But how much?
Credit Brynn Anderson / Associated Press
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Hotel bookings and travel plans have come undone. Local restaurants and shops will lose out on revenue.

Major League Baseball’s decision to relocate this year’s All-Star Game in the wake of Georgia’s new election reform law undoubtedly has financial ramifications. But how much?

Cobb County Travel and Tourism Bureau estimates a loss of over $100 million, but sports economists tell Atlanta Business Chronicle that this figure is an exaggeration.

“If you take that number and move the decimal point one to the left, you’re probably pretty close,” said University of Chicago economics professor Allen Sanderson. “Ninety percent nonsense and 10% is the real number.”

Pro sports teams and alliances for decades have justified bringing major sporting events to their respective cities in large part because of the economic impact it will provide, but the financial return for surrounding communities remains questionable.

MLB said it provided $65 million in economic impact to the Cleveland area during the last All-Star Game (2019). Economists recommend skepticism of that data since it comes from the league and not an independent study.

MLB announced Tuesday that it’s relocating the All-Star Game to Denver. And while the location change shifts dollars from one municipality to another, the global TV broadcast — and the $45 million in advertising revenue it generates — is the league’s primary concern.

Quantifying the true economic impact of the All-Star Game on a host city is complex. The estimate is made even more difficult given the uncertainty of fan attendance and the amount of ancillary and corporate events leading up to the game. This left the MLB to loosely project that their crown jewel event would provide an impact between $37 million and $190 million.

“Major League Baseball isn’t based in Atlanta and the hotels are not based in Atlanta,” he said. “Anything that’s going to an entity not based in Atlanta is going to leak out of the economy anyway.”

To read the full article, go to Atlanta Business Chronicle>>