Posted: July 01, 2013
Accounting for sports
Broncos are most valuable, but Rockies have had a bigger economic impactBy Mike Taylor
“When the office users started coming down there as well as the residential users, it becomes a 24-hour neighborhood,” he says. “We’re seeing the culmination of that right now. LoDo is the best place to be in Denver.”
BRONCOS’ IMPACT: VAST BUT FRAGMENTED
Because the Broncos, along with the rest of the NFL, are such a television-fueled product, their economic impact on the city or region is less observable than for the Rockies, and largely anecdotal. The Nuggets and Avalanche, who play 41 home dates a year, fall somewhere in between when it comes to tangible or direct impact. Combined they play 10 times more home games per season than the Broncos, but with lower per-game numbers: 19,000 seats for basketball and 18,000 for hockey.
Rich Grant, communications director for Visit Denver, the city’s travel and tourism bureau, points out that tourism is a $3 billion industry in Denver alone and a $12 billion industry statewide. Professional sports is a part of that, though it is difficult to estimate how much sports spending comes from outside the area and trickles throughout the local economy. Equally difficult is estimating what Denver’s pro sports teams contribute to tourism promotion through their visibility in the media.
“The Women’s Final Four (hosted by Denver last year) has had studies done on it, and the impact of that one event was $20 million,” Grant says of the women’s NCAA basketball championship that drew thousands from outside the region. The economic impact of a team or event that draws primarily from the area is difficult to quantify, he says.
The most visible economic impact locally when it comes to the Broncos, and to some extent the Nuggets and Avalanche, is in the form of spending at sports bars, which is why the exercise is mostly anecdotal.
“We’re affected by the Nuggets, the Avalanche, the Broncos, and to a lesser extent the Rockies,” says Kyle Gutherz, general manager of Brooklyn’s at the Pepsi Center and Tailgate Roadhouse, which is also near the arena. “I guess there’d even be a fifth team, the Mammoth (of the National Lacrosse League). What we really see here is that there are four different demographics. And we also survive off concerts, so that’s even another demographic. And then that can even be broken down into subgroups.”
Gutherz says a team’s success or lack thereof can impact Brooklyn’s business, but only to a point. “You’ve got to remember, how many people can you fit in the Pepsi Center? Considerably more than you can fit into Brooklyn’s. I can fit right around 1,000 people in here, especially when you talk about in-and-out, turning tables, what not. That’s considerably less than what the Pepsi Center’s going to hold.”
Even amidst the Avalanche’s dismal and abbreviated season when attendance dropped, Gutherz says fans didn’t exactly disappear. “I mean, they didn’t have any games where people just didn’t show up,” he says. “The (game attendance) volume can be down, but we still had people
Less than four months after the Rockies began playing at Coors Field in 1995, Jackson’s sports bar and restaurant opened across the street and has been practically an extension of Coors Field since.
“I don’t think Jackson’s or the majority of the bars downtown would exist without Coors Field,” says Scot Minshall, general manager at Jackson’s. As for business at the bar and restaurant, he says, “I can’t give you exact numbers, but it’s significantly different when they’re in town and they’re winning than when they’re out of town or when they’re losing.”
Although Minshall describes Jackson’s niche is Rockies “pregame” – people grabbing a bite to eat and a beer before heading to the stadium – and Friday nights, the establishment is consistently packed for Broncos games, too.
“We fill up all the way for them,” Minshall says. “Our business is Coors Field, but we do a good job income-wise with the Broncos, and obviously the better they play the better the turnout we get from that. Them losing in the first round of the playoffs last year really, really hurt business.”
A better memory was the Rockies’ magical run to the World Series in 2007 and the predicable spike in business. “Like night and day,” Minshall says of the business volume. “Every day, even the road games were just absolutely gigantic.”
He describes the same surge in business the years the Broncos won their Super Bowls. “Good teams certainly help business,” he says. “The further they go, the better the crowds become. People sort of jump on the bandwagon. For a long time the Avalanche in 2001 when they won the Stanley Cup, that was our biggest day on record. ’Til that World Series, actually.”
2012 TEAM VALUES
MLB Rank: 25
Current Value: $537 million
Annual revenue: $199 million
Operating income: $18.7 million
NFL Rank: 13
Current Value: $1.132 billion
Annual revenue: $276 million
Operating income: $49.3
NBA Rank: 19
Current Value: $427 million
Annual Revenue: $110 million
Operating income: $12 million
NHL Rank: 18
Current Value: $210 million
Annual Revenue: $91 million
Operating income: $4.5 million
Mike Taylor is the managing editor of ColoradoBiz. He writes about small-business money issues and how startups are launched. Email him at firstname.lastname@example.org.