By Chris Korman, The Baltimore Sun
10:00 PM EST, January 4, 2013
The Ravens and Redskins will host playoff games Sunday, about 30 miles and 31/2 hours apart.
Hosting two of the NFL's four playoff games in Maryland offers something of an economic double shot for the state. The games bring an increase in local taxes, a significant boost to the host teams' bottom lines and could have a combined economic impact of about $20 million to more than $40 million.
But economists say most of the money being spent in Baltimore and Landover this weekend would have been spent in the area anyway.
"This is mostly disposable income or entertainment dollars that would have been used in some other way," said Dennis Coates, an economics professor at the University of Maryland, Baltimore County, who has studied the impact of sporting events. "It really represents a shifting of money in the economy, not new money."
The Redskins game probably has more potential to bring fresh dollars to Maryland, as the team draws from a wider area that includes D.C., Virginia and West Virginia.
Whether it's local spending or from outside the region, local governments will benefit.
Each Ravens ticket is subject to a 10 percent admissions and amusement tax, with 80 percent of that going to the Maryland Stadium Authority and the rest to the city. David A. Raith, the authority's chief financial officer, said the MSA gets about $400,000 for each regular-season game but expects more for playoff games, when ticket prices are higher. Authority spokeswoman Jan Hardesty said much of that money ends up going back to the state because the MSA turns over all money left in its coffers after covering expenses.
Baker Koppelman, Ravens vice president of ticket operations, said the team expects to pay $900,000 in admissions and amusement taxes for Sunday's game.
Scott Peterson, a spokesman for Prince George's County, said the county expects to make $600,000 from ticket, sales and other taxes from the playoff game. Redskins tickets, too, are subject to a 10 percent amusement tax. FedEx Field holds 85,000 people.
Anirban Basu, chairman & CEO of Sage Policy Group Inc., has estimated the impact of a Ravens playoff game at $20 million. His calculations are based largely on the belief that fans spend more to support a winning team.
"It's a bigger, more meaningful event," he said. "People are going to put out that extra money to get a new shirt or jersey to celebrate or commemorate the event. They're going to make a bigger deal out of the weekend, go out or get a hotel room. People from far away might be convinced to splurge and make this their one trip."
Basu also said his estimate takes into account the increased volume and cost of advertising with local media outlets, and more intangible effects like the positive exposure the city receives from national sports media and television.
Other estimates for how much economic impact an NFL game has on the host city vary greatly.
A study commissioned by the NFL Players Association in late December 2010, when the specter of a lockout loomed, showed a $20 million impact per game. Representatives for the union used that figure to try to persuade politicians to pressure the owners into a deal, but many sports economists dismissed it as unrealistic.
A study the same year conducted by the University of Minnesota showed an economic impact of about $9.1 million per Vikings game, based on calculations that 25,000 people from outside the metro area attended each game and spent an average of $230. That money then rippled through the local economy.
It is difficult to calculate how many out-of-town visitors might come to Baltimore for any given game. The franchise is relatively young and bordered by teams with entrenched, passionate fan bases in D.C., Philadelphia and Pittsburgh.
Most of the Ravens' roughly 65,500 season ticket holders live nearby, and most of the available tickets for Sunday's game and the AFC Championship — which the Ravens would host if Cincinnati is the opponent — were sold to those fans. Not all opted to purchase their seats for the playoffs, Koppelman said, leaving several thousand tickets to be sold as a playoff package.
Of those, 2 percent to 3 percent are sold to buyers outside of the region, he said.
With the increasing popularity of the secondary ticket market, it's possible that a larger percentage of those available seats will go to Colts fans or displaced Ravens fans.
Tom Noonan, president and CEO of Visit Baltimore, said he expected football fans to book anywhere from 1,000 to 2,000 hotel rooms Saturday night. That would increase total hotel occupancy for the weekend from 20 percent to 40 percent. Restaurants and shops will benefit, too, leading to increased sales and alcohol tax collections, he said.
A report from the state's comptroller in 2011 estimated that nonticket spending by people attending Ravens and Redskins games generated between $3.26 million and $3.52 million in other tax revenue for Maryland over the course of an NFL season.
Coates' research on sales tax revenue has shown that major sporting events have only a small impact on spending.
"The numbers don't come out to reflect anywhere near the sort of spending some people talk about," he said. "It's simply not that significant."
Coates will watch Sunday's game from a bar in Germany, where he is teaching for the next two weeks.
"I can already tell you I'm going to have a lot of fun," he said. "And that's the thing you can't really measure: people are going to pay a few hundred bucks, but they're going to get something worth a lot more."
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