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Source: abcNEWS (Julio Cortez/AP Photo)

Background on All-Star Games

With the hype and excitement starting to build around the 2016 NBA All-Star, there is also lots of discussion surrounding the benefits an all-star game brings to the host city. Events of this magnitude often have a lot of upside, boosting tourism, showcasing the city and its amenities, and generating revenue for local businesses.

The NBA, MLB and NHL all-star events have come a long way from their humble beginnings to the star-studded weekends that we have come to know today.

The first all-star game arrived in professional hockey in 1908 taking the form of benefit games to aid players’ families who had either passed or experienced major injury. The MLB saw its first all-star game as a one-time add-on to Chicago’s World Fair in 1933, but achieving great success, became an annual event. In 1951 the NBA hosted its first all-star game to draw attention back to the league after the college basketball point shaving scandal the previous year.

Economic Impact of All-Star Games

Over the years each league’s version of the all-star game has transformed from a one-game event into an entire weekend or longer, with MLB’s spanning the course of five days. There is no doubt that the main reason for putting on an all-star game has changed. The weekends have become a haven for local businesses and league partner activations to capitalize on the influx of visitors into the city, along with the locals who use the special occasion to open their wallets a little bit further.

All-star games, as opposed to other major events like the Olympics and World Cups, often times have the major infrastructure in place, helping to minimize the cost of hosting to police, fire services, extra staffing and added security, resulting in a positive economic impact. In some instances where stadium upgrades are required for the bid, they are recovered during the all-star celebrations. Charlotte’s bid for the 2017 NBA All-Star included a $40 million upgrade to its arena, $33.5 million of which is covered by the city. Taking a closer look at the five previous NBA All-Star host cities, they averaged economic impact of $117.2 million. If we exclude the 2015 NBA All-Star in New York that saw close to $200 million injected into the city, host cities still see an average economic impact of $96.5 million (Figure 1).

Figure 1- League Impact Comparison

Figure 1 – Comparison of the economic impact of NBA, MLB and NHL All-Star Weekends.
* NHL did not have all-star events in 2013 due to the lockout, and 2014 due to the Winter Olympics.
Sources:
http://www.bloombergview.com/articles/2015-02-18/was-nba-all-star-weekend-a-financial-winner-
http://www.nba.com/pelicans/news/local-economic-impact-nba-all-star-even-greater-projected
http://www.baseball-almanac.com/asgbox/all_star_game_economic_impact.shtml
http://www.dispatch.com/content/stories/business/2015/01/21/nhls-big-event-big-for-city-too.html
http://hurricanes.nhl.com/club/news.htm?id=555295

Both the MLB and NHL also see positive impacts from hosting all-star events, with an average of $85.7 million and $22.6 million earned, respectively over the past 5 years.

For those lucky enough to score a ticket to some of the all-star festivities, the spending doesn’t stop with the events. Visitors to host cities spend in the range of $162 – $1,020 over the course of the weekend. With some cities seeing an influx upwards of 30,000 people, this provides a huge opportunity for local businesses to capitalize on visitors to the city.

Direct spending isn’t the only benefit gained from hosting. Each league gains large spikes in viewership for their respective all-star games. MLB sees the largest coverage, averaging 11.03 million viewers each year over the past 5 years. The NBA and NHL saw 7.94 million and 2.5 million tune in to their games each year across the last 5 years.

Figure 2 – League Viewership Comparison
viewership-all-star-game
Figure 2 – Comparison of the viewership of NBA, MLB and NHL All-Star Games.
Sources:
http://www.bloombergview.com/articles/2015-02-19/how-the-internet-killed-the-pro-all-star-games
http://www.baseball-almanac.com/asgbox/asgtv.shtml
http://sports.yahoo.com/blogs/nhl-puck-daddy/nhl-all-star-game-ratings-crash-in-u-s—canada-160156974.html

Closing

The economic return on all-star games is not a transient one. Sport and entertainment groups in host cities report the showcasing of their facilities has been a catalyst for opening doors to a lot of other events that might not have considered their venues. After the 2011 NHL All-Star Game in Raleigh, NC, the Greater Raleigh Sports Alliance has seen a year-over-year increase in the diversity of events approaching its facilities.

There are the tangible economic benefits for a city and team to host an all-star game. There are also the intangible benefits of the excitement the game brings to the city. The excitement just doesn’t revolve around the game itself anymore. With the host of celebrities and socialites that are drawn in each year, there are more reasons than just the sport to go out and attend the festivities.

With all-star games generating revenue, providing tens of thousands of personal touch points, and millions of impressions through viewership, it’s easy to see why cities jump at the chance to bid for their opportunities to host. And beyond just the cities, these benefits are extended to the league partners that activate on-site and leading up to the festivities.

Esurance was the title sponsor of last year’s MLB All-Star Game voting. The online voting platform delivered 731 million votes and over 2 billion media impressions in a crowded insurance category. Presenting sponsor of the game, T-Mobile had naming rights to the FanFest. The telecommunications brand saw 123,312 visitors come through the T-Mobile All-Star FanFest area, allowing for deep engagements with each of the fans. Last year in Cincinnati, Nike partnered to present a sold-out The Color Run MLB All-Star 5K. With 15,000 participants, it’s the largest event conducted by The Color Run in Ohio. Turning to the NHL, the 2011 NHL All-Star Fan Fair in Raleigh had over 31,000 guests peruse the 150,000 square-foot area in Raleigh’s convention centre. As part of the Fan Fair, there were over 30 interactive activations from league partners.

With all of the exposure and opportunity to activate interactively with fans, all-star celebrations are big draws for cities and brands alike. Each new all-star event also brings fresh opportunities for not only athletes to show their talent, but for hosting partners to show how they’re able to provide bigger and bolder experiences. To hear from the sponsors themselves, check out CSFX16. In partnership with the NBA for the 2016 NBA All-Star, CSFX is bringing you the latest industry-leading insights with its Basketball Sponsor Panel. Catch all of the details at www.csfx.ca.