Oklahoma City's return on its Thunder investments is approaching “priceless,” economist Mark Snead says.
While economists have long debated the benefits of public spending to attract and retain major league sports franchises, Oklahoma City clearly got its money's worth in the tax dollars it spent to bring the Thunder, Snead said.
“We don't have mountains. We don't have a coastline. We don't have a ski resort,” he said. “Amenities include pro sports franchises. It's one of those components that now make Oklahoma City completely in a different category.”
The city also has garnered abundant media exposure during the NBA finals, Snead said. Recent examples included Friday's front-page Wall Street Journal story on Russell Westbrook's eyewear that repeatedly mentioned Oklahoma City, and the featuring of town vistas on national broadcasts of games attended by its famously fervent fans, Snead said.
“You literally can't buy that kind of exposure,” he said. Snead, most recently an economist with the Federal Reserve in Denver, is moving back to Oklahoma to launch a regional economic forecast firm called RegionTrack.
Oklahoma City officials have continued to use estimates generated during the temporary tenure of the Hornets that each sold-out game brings in about $1.2 million in economic impact. Tom Anderson, a specialist with the city manager's office, notes that economic impact for the season to date, with every game sold out, totals more than $53 million.
Robert Dauffenbach, a University of Oklahoma economist, said it's difficult to quantify the economic benefits of a professional sports franchise.
“I think there's been a lot of criticism of these kinds of studies, that they exaggerate the benefits a lot,” said Dauffenbach, director of the Center for Economic and Management Research at OU's Price Business College.
But he agrees with Snead that the coverage of the NBA Finals in Oklahoma City has provided a huge boost to the city's image, which for many outsiders continues to be focused on the Dust Bowl or 1995 Murrah Building bombing.
“A lot of it would relate to changed attitudes,” Dauffenbach said. “The chief benefit is it puts you up there with the world-class kinds of cities. Frankly, we belong there with San Antonio and Seattle.”
Economic studies vary
Before moving to Oklahoma City, the Seattle SuperSonics claimed that the team pumped $234 million into that area's economy each year — a huge difference from the Thunder estimates.
But a 2011 study by economists Rob Baade and Victor Matheson pointed to three potential flaws in any calculation of economic benefits of major sporting events or teams. Those include failing to note that spending associated with a sports team simply replaces other entertainment spending, that the crowds associated with games push out normal economic activity in the area, and the propensity of highly paid coaches and athletes to live elsewhere.