Costs and benefits of major sports events : A case study of Euro 2000.

An academic consensus seems to be that investments in sports events can hardly ever be defended on economic grounds, and that the evidence for their contribution to the promotional objectives of the host cities is not solid. The aim of this thesis is to apply a methodology for evaluating major sports events to the European Football Championship 2000, in short Euro 2000. This event was organized by Belgium and the Netherlands, but this evaluation concerns only the Netherlands. The methodology is a synthesis of economic impact analysis and cost benefit analysis (CBA). The CBA by multiple accounts introduced in this thesis is intended as a structuring device for public discussion.Data was collected in three different ways: from visitors to this event by face-to-face interviews; from the population in five European countries by telephone interviews before and after the event; and from the Dutch population in the host cities and the rest of the country, also by telephone surveys. The net total sample consisted of 4,000 interviews.The methodology of multiple accounts establishes an explicit distinction between private and public benefits.The largest financial profit was made by Uefa, estimated at €81 million.For the Dutch business community as a whole, the benefits outweighed the costs. Some branches of industry experienced a local decline in demand, but this was probably compensated by other branches or regions. These results confirm the observation in the literature that there are substantial 'crowding-out' effects on visitor patterns in host cities during major sports events. Now, as a result of this present research, it can be added that a substantial part of these effects is on domestic visits and should be discounted as economic impact at the national level. Some branches experienced a boom or decline, which was notspecifically related to hosting Euro 2000, but is rather typical for any international football championship or sports event. The real winners were: the accommodation sector (especially the campsites), and catering (cafes, fast-food) sectors in the host cities. The results for the hotel sector are less unequivocal because of the crowding-out effects of Euro 2000 on foreign tourists.For the public sector (the aggregated accounts of central and local government), the financial benefits have outweighed the costs. For an evaluation of the public costs and benefits, the external effects are also of relevance. The most frequently-mentioned positive external benefit is the increased awareness of the Netherlands in other countries. Surveys on image and awareness in foreign countries have confirmed these effects, but only to a modest extent. Nevertheless, it was possible to establish a relationship between the effects in specific countries and the performance of their national team.It seems, therefore, that the earlier conclusions, derived from research on professional team sports in the United States, are sometimes too easily stretched to include major sports events. This misses two points. First, sports events might be undertaken at a low public cost. Such events might be organized using existing venues and thus would involve little public investment. Second, international sports events, by their very nature, bring additional expenditures to a city and country, whereas in the case of a sports franchise most of the economic effects are mainly of a switching nature.