NBA All-Star Game 2023 in Salt Lake City’s economic impact report – Salt Lake Tribune
How much did 2023′s NBA All-Star festivities contribute to Utah? That’s what the economic impact report commissioned by the NBA and then executed by Temple University’s Sport Industry Research Center tries to figure out.
While not yet publicly released, The Salt Lake Tribune recently obtained the document through a public records request.
Like most economic impact reports, there’s a clear pro-event agenda that runs through Temple University’s work here. In general, the NBA wants to show exactly how important its marquee event is. Likewise, Salt Lake City government wants to show that the various sacrifices made to host to the event were worthwhile.
Still, the report is detailed enough to get notable figures that withstand scrutiny. While I have real doubts about the headline number that the event resulted in $294 million of economic benefit to Utah, there are more specific numbers in the report that can give us a better idea of what NBA All-Star week meant for the state and its residents.
Let’s dig in.
Who went to All-Star Weekend?
Overall, 67,496 unique people attended All-Star events in Salt Lake City, either at the Delta Center, Huntsman Center or Salt Palace. Just over half of those were local or in Utah for another reason, leaving 32,046 attendees who traveled to the area and attended one of the events primarily because of the All-Star festivities.
About a week after the All-Star Game, the NBA emailed a survey to those attendees, asking about their experience in Salt Lake City to try to learn more about the event. In all, 1,356 people answered that survey, which is a pretty good sample size. It’s that data that’s the largest basis of evidence throughout this report, along with the occasional specific number from the league itself on its own employees or partners attendance or spending.
As you’d expect, a lot of hotel rooms were used. The NBA estimates that, among its players, staff, vendors and other affiliated people, 31,995 hotel or AirBnB nights were purchased in Utah. The survey’s data estimates another 36,137 hotel or AirBnB rooms were used by others who traveled to the area for All-Star.
How much did Utah workers and companies benefit?
The big question: How much did our state benefit financially from hosting the week-long NBA event?
The NBA says that the league and its partner corporations spent a whopping $170 million on All-Star weekend in 2023. That’s an absolutely gargantuan figure. Yes, there were extremely lavish parties at event spaces throughout town, thousands of people were flown in, the arena was significantly altered for the event — but $170 million is so much money.
The report notes that that number is subject to leakage, though, and I give it credit for noting that. Leakage is the idea that a lot of that spending won’t stay in our state. If someone pays for a stay at a Hyatt hotel, for example, some of that money is going to go to the laborers at that hotel … but a lot of it is going to go to the Hyatt corporation based back in Chicago. To account for leakage, Temple says they split the expenditures into 14 different categories, and then estimated how much leakage generally occurs in each of them. They say $119 million of that $170 million total stayed in Utah.
Of that $119 million spent by the NBA and friends, they estimate $50 million of it went to laborer income — that 1,700 jobs were “created, supported, or expanded” as a result of All-Star hosting.
Then, from the survey data, they estimate that those 32,046 non-local All-Star attendees spent $38.4 million, of which they estimate $32.8 million stayed in Utah. How do they get that? By asking those attendees how much they spent on food and beverage, lodging, retail, local transportation, and other costs.
Where things get a little bit dubious to me is the indirect and induced economic impact these reports claim.
Indirect spending is the idea that the companies who make money from the All-Star game will go on to spend it on other local companies. So if Utah Event Space Inc. needs more light bulbs for All-Star parties, they’ll buy them from Utah Light Bulb Inc. And then Utah Light Bulb Inc. might need to buy glass from Utah Glass Inc. And so on.
Induced spending is the idea that because of the All-Star, those 1,700 local workers made more money. Those workers will then spend more in the economy than if they had less money.
Overall, $142 million of that headline $294 million in economic impact comes from these second or third order factors. I’m not denying that hosting All-Star has ripple effects throughout the economy, but it’s hard to know how much. Personally, I suspect that in most cases, Utah Event Space Inc. already had all the light bulbs it needed. And those 1,700 workers might have found other jobs. In general, other economists have found that Temple’s economic impact software here can lead to dubious results — ones that often lead to inflated totals.
Finally, the report estimated how much in tax revenue was generated as a result of All-Star. They estimated $500K in city taxes, $550K in special district taxation, $430K in county taxes, $4.45 million in state taxes, and $20.38 million in federal taxes.
What about media value?
The report also tried to measure what hosting All-Star did for Salt Lake City and Utah’s public image — and in particular, what value all of the mentions of the city and state would have cost if they were purchased, not given through this event.
The report concludes that there was $102.3 million in total media value to Salt Lake City, or the equivalent of 14.6 30-second Super Bowl ads. That comes from three categories:
• Written media coverage of the event, where 13,248 articles mentioned SLC or Utah. Temple says that’s worth $80 million.
• Social media coverage of the event from media outlets, influencers, and fans, which Temple says is worth $17 million.
• Broadcast TV coverage, which Temple says is worth $5.2 million. 16.2 million people watched All-Star coverage internationally.
That $102 million valuation also comes from the combined reach of those platforms; the total reach of all of the media reports on the event was reported to be 29.9 billion. At a certain point… you probably get diminishing returns when your reach is calculated to be four times the population of the planet.
Again, I’m also a little dubious here. The fact that so many articles mentioned Salt Lake or Utah doesn’t necessarily mean that the articles led the reader to think about either. A Salt Lake City Super Bowl ad would allow you to reach the public with a particular message about the city; this media coverage tells the public mostly that Salt Lake City is a place that’s hosting the All-Star Game. Heck, media coverage that did talk about Salt Lake City sometimes tended towards the negative, making fun of the place for a lack of nightlife.
How much did people like ASW?
This some good questions: Were people pleasantly surprised? How much did the attendees of the All-Star festivities like what they experienced?
Those surveyed 1,356 people were asked if they would recommend the All-Star event to others.
Overall, 48% of people said they would recommend it, while 23% said they wouldn’t. Interestingly, Salt Lake County residents were less likely to recommend the event than people who visited from other parts of the country, and international visitors were the most positive of all.
Salt Lake City and Utah were more popular than the event itself. 77% of attendees said they would recommend Utah as a travel destination, and 56% said the event improved their perception of SLC. And fully 66% said they plan on returning to Utah for vacation.
And so it’s for those reasons I consider the event a successful one, a significant net positive for our city and state. While you can debate how much money it brought to our economy, it looks like it was in the nine-figure range. The people who went also seemed to like it, and generally have some good things to say about Utah.
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