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COTA official: Hosting ESPN X Games could bring $50 million to city

Wednesday, May 22, 2013 by Michael Kanin

A pitch to host the 2014, 2015, and 2016 editions of ESPN’s X Games could add $50 million in direct and indirect revenue to city coffers, according to Circuit of the Americas President Steve Sexton. He spoke to Council members at Tuesday’s work session.

 

Sexton and his team hope to host the event at Circuit of the Americas. If the city wins the bid, ESPN would build facilities to support the games, a skateboarding-heavy series of competitions targeted at a relatively young audience.

 

“It’s an ideal match (for the City of Austin),” Sexton said.

 

Detroit, Charlotte and Chicago are the other three finalists for the games. In addition to sporting events, the X Games would also bring with it a downtown street festival, not unlike, says Sexton, the one that accompanies the November Formula 1 race.

 

Sexton told Council members that $30 million of the civic proceeds associated with the event would come from direct economic impact. Sexton broke those figures down: “That was for 25 percent of visitors (coming from) outside of the market tied to the typical economic impact variables of spending; incremental hotel nights and sales tax spending, consumer spending in the market place among those attendees that come from…outside the market place.”

 

He said that $20 million additional dollars would come with four days of broadcasting. “It’s the media value of going to 178 countries and…50 states with 27 hours of ESPN programming,” Sexton continued. “So it’s exposure the city gets.”

 

Sexton added that, though he and his team have not yet completed an economic impact study for an Austin version of the games, there would be one performed as part of the process. “I would anticipate (the impact) to be not less than $30 million in a city like Austin,” he assured Council members.

 

In return, the event will seek tax-increment based reimbursement from the state’s major event fund. Sexton is after city sponsorship, support that could come with roughly $150,000 in fee waivers. If Austin does not win the event, city officials are not on the hook for any funding.

 

Mayor Pro Tem Sheryl Cole asked Sexton about his numbers. Sexton replied that the figures are from a 2011 study performed by the City of Los Angeles, previous host to the X Games, which are being staged in Barcelona, Spain this summer. Council Member Bill Spelman wondered if those figures should come with any sort of caveat.

 

“In general, (the LA study) should be very applicable,” Sexton said. “I would give you a little bit of a biased answer and tell you that Austin is a much hotter and now city than Los Angeles is.”

 

Assistant City Manager Sue Edwards told Council members that city staff came up with the $150,000 figure for X Games fee waivers by using a ratio derived from the figure that they use for South by Southwest fee waivers – something that also accounts for the economic impact of an event. In 2013, the city waived more than $600,000 in fees for that festival.

 

Council Member Laura Morrison did a bit of quick math. She told In Fact Daily that, going by the $150,000 fee waiver, city staff had assumed that the X Games would produce roughly a quarter of the economic impact of SXSW. This, Morrison said, did not “pass the sanity test.”

 

Morrison pointed out that SXSW runs for an extended period of time, where hotel rooms are filled across the city. She wondered how a “four-day event in Del Valle” could account for one-fourth of that impact.

 

Council members will vote Thursday on an authorization for the Circuit’s local organization committee to act on the city’s behalf in an attempt to get events funding from State Comptroller Susan Combs.

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