An American expert on sports economics told a Calgary crowd Monday it’s hard to justify the cost of building a new arena when you consider tangible factors like employment and taxes, and intangible benefits like civic pride.
Brad Humphreys, a professor of economics at West Virginia University, was speaking at a University of Calgary School of Public Policy luncheon.
“There’s not a huge amount of evidence supporting the idea that professional sports or mega events are huge drivers of local economic conditions,” Humphreys said.
On the subject of a new arena, which has divided Calgarians, Humphreys said even the intangible benefits — when calculated — don’t add up to much.
“Twenty to $30 million a year, if we can put a dollar value on those intangibles,” he said.
Humphreys said mega projects, like hosting the Olympics in 2026, are also hard to justify – something he blames on the process the International Olympic Committee (IOC) uses to choose bid cities.
“The IOC has never played fair with cities that want to bid for the Olympics. The IOC is going to get the most the IOC can get out of a city.”
“They allocate the Games by making cities bid against one another to host the Games, and that drives up the cost, and that’s why we see these cost overruns,” Humphreys said.
Humphreys admitted having legacy venues like the Olympic Oval and Canmore Nordic Centre that are still operational could give Calgary some additional leverage in a bid.
The West Virginia professor, who previously spent six years at the University of Alberta, has examined the experience of past Olympic cities. He said most of them incurred cost overruns.