“Winning Football Clubs Give Cities Revenue Boost”
By Community | February 25, 2019
Having a club (or two) finishing in the top three of the English Premier League championship race can have a significant economic impact on the home city, with the success of a team linked to an increase in general consumer spending in the communities, according to a new report.
While fans all over the world support the leading Premiership teams, many are clustered within or near the home city, and success leads to a concentration of celebratory consumer behaviour, and increased spending, said the Centre for Economics and Business Research (CEBR).
With Liverpool and Manchester City at the top of the table, these cities could enjoy the economic boost which comes from performing well in the Premier League in 2019.
CEBR estimates that the added 1.1 percentage points to growth would be worth £220 million for the Manchester economy or £133 million for the Liverpool economy.
Manchester City has a bigger impact given that there are more fans than for Liverpool measured by match attendance
There are different ways that a strong performance in the Premier League promotes local expenditure:
- If more people want to watch a team because it is performing well, then there is an increase in direct spending on ticket sales, merchandise and the hospitality sector in the city due to people visiting to attend games.
- Even if not watching in the stadium, when teams are playing people often spend money locally while watching, for example by viewing in pubs and bars.
- Sporting success is linked to an increase in general consumer spending by those who support the team.
In order to capture these spending effects, London-based CEBR used regression analysis to study the local economies of the teams ranked in the top three positions of the Premier League since 1999 to see if they experience higher economic growth in the years they perform well.
Overall, the analysis showed that in the year that they come within the top three positions in the Premier League, a city experiences GVA growth 1.1 percentage points higher than if they finish outside the top three positions.
Other studies support the findings. Following Leicester City’s Premier League win in 2016, analysis found that direct impacts on expenditure in the city included an additional £224,000 as a result of attendance at football fixtures increasing to full capacity in the second half of the 2015-16 football season.
Also, there was a further £22.6 million added spending in the hospitality sector, with sales increasing by as much as 300 per cent in some parts of the city centre over 5 key matches, according to Leicester Castle Business School.
There is strong evidence linking sporting success to increased consumer spending. Research by Lloyds Bank suggests that between 1990 and 2014, the four countries which managed to reach the semi-finals in the Football World Cup on average saw growth in consumer spending of 4.5% in the year following the World Cup, compared to an average of 3.3% before the tournament.
Furthermore, psychological research suggests that sporting fans associate the successes and failures of their team with their own successes and failures, which can have strong behavioural effects on people’s confidence and even their dopamine levels.
The increased confidence from the team you support winning frequently manifests itself in the form of higher spending on social outings and retail goods.