January 1, 2009

Rose Bowl is about football -- and marketing

The Rose Bowl

When Pasadena staged the initial Rose Bowl Parade in 1890, the civic venture was viewed as much as a marketing gambit as something for the proud locals to do on New Year's Day.

Here's what an early parade backer had to say about the affair:

In New York, people are buried in snow. Here our flowers are blooming and our oranges are about to bear. Let's hold a festival to tell the world about our paradise.

Now, with the unemployment rate rising, housing prices still falling, Detroit imploding and the global economy stalled, the parade and the football game (that first was played in 1902) remain, at heart, a marketing gambit.

Sure, the festivities make for a fun weekend, but they're also supposed to draw free-spending consumers -- as well as media attention -- to Pasadena and Southern California. So how effective are the game and parade when it comes to providing a boost to the economy?

After the 2005 events, the UCLA Anderson School of Management estimated the direct economic impact of the game and parade on Southern California at $189 million. The study also suggested that the Rose Bowl activity also generated $181 million in indirect spending across Southern California.

In November, the City of Pasadena made public some data contained in a study conducted by the USC Sports Business Institute. The study completed in the wake of the Jan. 1, 2008, festivities estimated the economic impact of the game alone on the Pasadena economy at $58.6 million. (That figure included $38.6 million in estimated direct economic impact and another $20 million in indirect spending.)

No one questions the fact that sports is a big business. The Los Angeles Sports Council estimates that sports (including professional baseball, basketball and hockey and such special events as the Rose Bowl game) drive $4.1 billion in economic activity in Los Angeles and Orange County.

But, just as Penn State and USC fans will beg to differ on which university has the better football team, sports-minded economists are quick to argue over the merits of studies that attempt to define the economic impact of big games.

"Independent studies consistently show that there just isn't much of an impact from these events," said Dave Berri, an associate professor of economics at Southern Utah University.

No matter if it's the Super Bowl, Rose Bowl or America's Cup, the result is the same, said Berri, a blogger at the Sports Economist and co-author (along with Martin Schmidt and Stacey Brook) of "Wages of Win," which examines the economics of sports.

David Carter, executive director of the USC Sports Business Institute, admits to wearing Rose-colored glasses. He also acknowledges that economic estimates are open to debate. But he contends that the Pasadena study provides strong evidence of tangible economic benefits within the city limits.

He also points to "intangibles" generated by the millions of eyeballs around the world

that are fixed on Pasadena during the Rose Bowl parade and game. "How do you measure the value of that global notoriety and branding each year," Carter asked. "And what's the inherent value to Pasadena next year," he adds, when the Rose Bowl is scheduled to host both the traditional "granddaddy of all bowl games" on Jan. 1, 2010, as well as the BCS Championship Game a week later?

Meanwhile, as this year's kick-off draws closer, two forces are expected to slow consumer spending.

"The economy is a little bit tougher," said Jack Keyser, chief economist for the Los Angeles Economic Development Corp. "So you might not get the full impact of the Nittany Lions, even though they have a tradition of traveling well to these big games."

"Consumers in general are either traveling less, or, when they do travel, spending less time and money," said Bruce Baltin, a Los Angeles-based senior vice president at PKF Consulting, which monitors the hospitality industry. "Naturally, the recession has got to have an impact this year."

There also could be a bit of "USC fatigue," given that the Trojans have played in four of the last five Rose Bowl games -- and the fact that this year's game isn't for all of the BCS marbles.


Source: LA Times Blog

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