[Editor's Note: Names removed to protect privacy]

Subject: Study Shows Strong Positive Economic Impact of Spring Training for Florida

Dear Mr. Holder.

My name is Philip Porter. I hold a Ph.D. in Economics and have studied sports economics extensively over the past 25 years. You should be aware of a few things that are crucial to interpreting the Bonn Group analysis. I list them as bullet points below.

1. The Bonn Group did not measure the impact of spring training – they estimated one part of it (visitors) and projected the rest based on a model of the economy.

2. Without exception the academic economists that have studied sports conclude that the methodology used by the Bonn Group is inappropriate. In more than 50 studies the results cannot be verified by retrospective analysis. That is, the imprint of spring training that should be evident when a team moves in or out of a county or when spring training is cancelled due to strike or lockout cannot be found. I have attached a list of articles I am familiar with. Not all of these are about spring training but they all deal with sports activities that are touted as generating large economic impact. If the Bonn Group report did not cite this literature, it has not done a thorough job and does not provide you with complete information.

3. The Florida Sports Foundation and the Office of Tourism are not impartial and their output is not vetted. Academic economists have no horse in the race; most that study sports are avid fans who, if they are biased, are in favor of sports. We publish our results together with our data. The papers are blind reviewed by at least two editors and two or three reviewers and, once published, subjected to the scrutiny of the profession. When 50 academic economists reach the same conclusion, it is hard to ignore.

4. Economic impact is probably not what you think it is. Economic impact as used in these studies is not income. It is not the value of goods and services. It is instead gross sales. A simple example helps to understand what this is. If a farmer sells $.20 worth of wheat to a miller who grinds it into flour which sells for $.40 to a baker who bakes bread which sells for $1.00 to Publix who in turn sells it to you for $1.50, there is $3.10 in gross sales but only $1.50 worth of bread created.

5. Subsidies come from tax revenue and therefore should be compared to taxes generated to make a meaningful comparison. A $47m impact on a community generates about $20m in taxable sales (see point 3) and, at 7%, $1.4m in tax revenue. An annual subsidy of $2m implies that the host community and the state must reduce other services to host spring training. Even if the projections of the Bonn Group were true, the subsidy creates sacrifice for Florida residents.

6. Economic impact as measured by the Bonn Group capture only the good cash flows – money into the economy from tourists – and ignores all the bad cash flows – money out of the economy from taxes and from local residents who spend money on the team. The Bonn model counts $1 of tourist spending as an infusion into the local economy and multiplies it (by, perhaps, 2) to account for the subsequent rounds of spending as the $1 circulates in the economy. However, since the team typically keeps all gate receipts, signage, naming rights, and other revenues generated at the stadium, spending by local businesses that advertize at the stadium and by local residents who attend the games leaks out of the economy and leakage is subject to the same multiplier. Every local dollar given to the team should be multiplied (by 2) and subtracted before any measure of “impact” is made. Ignoring negative cash flows makes the analysis meaningless. You are given their estimate of the positive benefits but you do not know the costs.

7. Dr. Bonn is not an economist. His analysis comes directly from a REMI or IMPLAN model that he purchased. He puts some data into the computer model and out comes results that he reports. I feel certain he knows nothing about the internal process that generates his report. I’ve built such models and teach the basic mathematics of the model. It is appropriate to use this model when there is new spending that is steady and recurring. It is not appropriate for events that span only five or six weeks each year.

While it is clear from past analyses that good education, public safety, good transportation systems, and low taxes stimulate economic growth, sports do not rest on such a firm foundation. Since sports subsidies necessarily reduce other government spending or necessitate higher taxes, doubt about the impact of sports makes its subsidy a very questionable government function.

If you are open minded about spring training, I would gladly answer any question you have. If Dr. Bonn would like, I’d gladly meet with you and him to discuss his finding.

Philip Porter
Professor of Economics
University of South Florida
Dear Constituents of District 70:

I would like to share this information with you about the impact of Spring Training on our state. I would like to hear your thoughts about this report.

Best Regards,
Doug
__________________________________
Doug Holder
State Representative, District 70
8486 S. Tamiami Trail
Sarasota, FL 34238
941-918-4028 office
941-918-4030 fax

Florida Spring Baseball is Big Business for Florida

~ Annually Brings more than $750 Million to the Sunshine State ~

TALLAHASSEE – The 2009 Florida Grapefruit League season may have lasted only 39 days, but the total economic value (impact) of the Major League Baseball Spring Training to the Florida economy was estimated to be $752.3 million, according to a new study conducted by Bonn Marketing Research Group, and commissioned by the Florida Sports Foundation in conjunction with the Office of the Governor and Office of Tourism, Trade and Economic Development.

The 2009 study found that the 2009 Major League Baseball (MLB) Spring Training season generated $284.2 million in total labor income and supported or created 9,205 part-time and full-time jobs. The study showed an increase of $299 million from a study completed during the 2000 Florida Spring Training season that showed a $453 million economic impact. When broken down on a per team basis, the 2009 study shows a $47 million economic impact per team to the community that hosts a Major League team for Spring Training.

Included in the economic impact analysis are the 16 MLB teams spring training operating expenditures in the State of Florida, the operating expenditures of the 15 stadiums that house MLB spring training operations, the concessionaire spring training operating expenditures at the 15 stadiums, and spring training game attendee expenditures.

Spring training game attendee expenditures were calculated from data collected through 1,600 personal interviews at all of the 15 spring training stadiums inFlorida. Attendees were surveyed during four randomly selected home games for each of the 16 MLB teams.

The largest source of direct expenditures from Spring Training baseball operations is fan spending, accounting for 91 percent of the total expenditures generated by 2009 MLB Florida spring training.

“Major League Baseball has a following that transcends economic downturns,” Dr. Mark Bonn, President of the Bonn Marketing Research Group, the firm that conducted the study. “People make their decisions to travel almost a year out and many of the respondents were repeat attendees at Spring Training Games. Economic conditions have little effect upon their decision to come to Florida for spring training. It’s more about loyalty than economics.”

The 2009 Florida Spring Training Baseball season, which lasted from February 25 and April 4, drew a total of 1,561,873 fans to 259 games at 15 locations around the State of Florida for an average of more than 6,000 fans per game.

In an effort to determine the number of out-of-state attendees, professionally-trained surveyors for the Tallahassee-based Bonn Marketing Research Group, determined the origin of each attendee before the personal interview began. With that information, the survey estimated out-of-state spring training attendees stating “attending spring training” as their primary trip purpose, contributed $571.7 million in total spending output.

During the 2009 MLB Florida spring training season, 48 percent of attendees were from out of state, 28 percent of attendees were Florida, non-county attendees traveling to another county to see a Grapefruit League game and 24 percent of attendees were Florida, in-county attendees.

2009 MLB Florida spring training attendees spent an average of $313.65 per party per day, spent 5.82 nights and traveled with an average party size of 2.95 persons.

Other survey results determined a high level of satisfaction through 1,600 personal interviews conducted at spring training sites. More than 60 percent of the fans surveyed had previously attended a Florida Spring Training game and 91.9 percent indicated that they would attend another game.

The Florida Sports Foundation offers an annual, complementary guide to all MLB teams in Florida’s Grapefruit League including stadium locations, ticket prices, telephone numbers, team schedules and more. For a listing of Florida Grapefruit League teams holding their annual spring training in the SunshineState and their locations around the state, please visit http://www.floridagrapefruitleague.com. To obtain a complete copy of the survey, visit http://www.flasports.com or call (850) 488-1422.