Sports economists: World Cup won’t bring $700m economic impact to Nashville | State
(The Center Square) – Several sports economists who study the economic impact of sporting events estimate that a report showing an economic impact of nearly $700 million for Nashville if it is selected as the host city of the 2026 World Cup was heavily inflated.
Nashville was one of the first nine potential venues visited by FIFA, which is the governing body of international football. A group visited the city on September 9.
FIFA lists 22 potential venues for the world’s biggest football tournament, to be hosted by the United States, Canada and Mexico, including 17 in the United States. The tournament, which takes place every four years, is expected to grow from 32 to 48 teams for the first time in 2026.
An economic impact study released last week by the Nashville Convention & Visitors Corp estimated that having four games at Nissan Stadium in Nashville would bring 160,000 out-of-state fans to the area, spending an average of $150 per night in non-game entertainment.
“The $700 million figure is insane,” said JC Bradbury, sports economist and professor at Kennesaw State University in Georgia. “…That’s a lot of money. It’s not believable on the face of it. Whether it’s net new people staying in hotels, I absolutely don’t believe it based on other research, and we should see in further studies of (previous) World Cups these extremely large economic impact effects.”
The estimated $700 million impact for Nashville in the Nashville Convention & Visitors Corp report is higher than estimates for all previous host countries, Bradbury said.
The report estimated fans would pay for around 120,000 hotel rooms for an average of five nights at an average cost of $300 per night.
E. Frank Stevenson, chairman of the accounting, economics, and finance department at Berry College in Georgia, studied hotel economics at major events such as the Super Bowl and national political party conventions. Nashville is also would have been a finalist for the 2024 Republican National Convention.
Stevenson called the five-night World Cup stay in the Nashville Convention & Visitors Corp report a “pretty aggressive assumption” and said that if 120,000 more rooms were actually booked in Nashville during that time, “it would crowd out lots of people who are already there.Hotels in Nashville are already doing pretty well, especially in the summer months.
Stevenson said in the summer of 2019, before the COVID-19 pandemic, rooms were 76% to 77% full in Nashville in July.
“There’s not a lot of slack in the system,” Stevenson said.
Stevenson’s study of Super Bowl City hotel stays showed that nearly 90% of the increase in hotel revenue during average two- to three-night stays was due to price increases. Most hotels are chain-owned, so that money would most often immediately flow out of Nashville and Tennessee and go to a corporate headquarters because, as Stevenson noted, the rate increase doesn’t come with no raises for local hotel staff.
The increase in World Cup hotel stays would more likely crowd out those coming to Nashville for other entertainment or vacation reasons during the summer, Stevenson said.
“Some of them might be coming a few weeks earlier than they otherwise would… so maybe the crowding out isn’t 100% completely lost, but the net gain is probably considerably less than the 120,000” , Stevenson said.
Victor Matheson, a sports economist at the College of Holy Cross in Worcester, Massachusetts, is a football fan who attended 1994 World Cup matches in the United States and wrote a study on the economic impact in host cities.
Matheson said the estimate that Nashville would earn between $150 million and $200 million per game it hosts is “extremely crazy.”
“Not every game will be England v Germany… who either have a large number of domestic fans in the United States who are going to travel for it or people who are going to come from Germany or England to go to the game in Nashville,” Matheson said. “So a lot of the fans there will be local or semi-local.”
William F. Fox, director of the Boyd Center at the University of Tennessee-Knoxville and author of the Nashville World Cup Impact Report, said the visitor estimates were “out-of-state visitors, not state fans. We assume that these visitors (many of whom may be from other countries) would not otherwise be in the Nashville area. We assume there is sufficient capacity in the hotel, restaurant, entertainment etc.
Matheson, however, thinks a lot of fans will be state football fans who won’t stay overnight and spend money in and around Nissan Stadium that they would have spent elsewhere in the state. . Matheson said he did it in 1994, attending World Cup games in Chicago and Detroit without staying overnight.
“The people of Chattanooga are not going to come and spend huge amounts of money,” Matheson said. “They will spend the night maybe one night or not at all. … You get a game like Cameroon v Jamaica, you’re not going to bring 30,000 Cameroonians to spend a week in Nashville so you can watch a game.
Matheson said his study of the 1994 World Cup showed some host cities, such as Orlando, Florida, had worse than expected economic performance without the tournament due to crowding out of hotel rooms from Orlando. with football fans instead of a theme park. visitors.
Matheson said Super Bowl impact reports often have big numbers before the event, but the actual numbers are closer to $30 million to $130 million in additional economic activity.
“Even if you take the higher of those numbers, it’s not what Nashville thinks they’ll get for these football games,” Matheson said. “The World Cup is a great event, but it’s not a Super Bowl in terms of economic impact, and it’s certainly not a Super Bowl for the four games you’re going to have.”
Fox’s report says construction to meet World Cup venue, fan party and general standards would cost $15 million, which would be privately funded. It also estimated that the event would support 5,469 annualized jobs, including more than 5,000 related to offsite expenses related to the event.
Fox also estimated the event would generate $66.1 million in tax revenue, including $45.9 million from sales tax revenue, $10.8 million from hotel/motel tax revenue, and 9 $.4 million from other tax revenue.
“We measure new tax revenue but do not seek to distribute it among the various public beneficiaries,” Fox said.
However, after a bill passed by the Tennessee Legislature and signed into law by Governor Bill Lee last year, the Metro Nashville Sports Authority will retain all sales tax on events and merchandise sales at the stadium. and 50% of sales tax proceeds on any new development at East Bank, 130 acres of land near Nissan Stadium.
These funds will then be used to pay off the debt for Nissan Stadium, where the Titans are would have in negotiations with Nashville on $600 million in upgrades.