Here We Go…Again
As the Pittsburgh Steelers prepare for yet another AFC Championship game, chants of "Here we go" fill the air. However, while the fans bask in the football hype, we are all left listening to the hype from City boosters proclaiming the game will be a financial boon for the region. So here we go again.
While fans will certainly stock up on all manner of paraphernalia with the Steelers logo and on snacks and beverages for the big game, this does not represent new spending in the area’s economy. After all, for those who live in the area this only represents a redistribution of existing spending. The only expenditures that will make a difference will be from those out-of-town visitors who are here specifically for the game.
But will they make much of a difference for the City? VisitPittsburgh is estimating that the Winter Classic generated about $15 million and the first playoff game brought in another $19.2 million for the region. Their estimate for the AFC Championship game is about $26 million. While there may be a direct benefit for the hospitality industry as visitors pack hotel rooms and restaurants, it will not provide much directly to the City. The City will see an uptick in the amount of parking taxes, amusement taxes, and the facility usage fees collected. But these taxes represent only a small fraction of the City’s tax revenue stream, about 16 percent. There may even be a small increase to the earned income tax if City residents work extra shifts as a result of the increase in business. However other taxes such as sales, including the Regional Asset District tax, and hotel are collected by the State or County and do not come back directly to the City.
Keep in mind that this is not the first playoff game or major event hosted by the City. Over the past decade, the City has been host to a few football playoff games including two AFC Championship games, the baseball All-Star game, multiple Stanley Cup playoff series, the Winter Classic and the G-20 summit. And each time, City cheerleaders tell us how much money is being spent and how great it is for Pittsburgh. Yet the City has been mired in economic distressed status since 2004 and is having difficulty finding revenues to address legacy costs such as pensions.
Events like the AFC Championship games are certainly fun for fans and add a positive buzz to the atmosphere. But to suggest that they represent a windfall to the area is an overreach, especially for the City. And if the Steelers are fortunate enough to win this game and advance to the Super Bowl, will the same folks who are talking about the windfall for Pittsburgh then tell us how sad they are to see all the money leave Pittsburgh and go to Dallas, the host of this year’s game? After all thousands will spend money on travel, hotel, tickets, and entertainment and food while in Dallas. Probably not.