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Old 10 Aug 2011, 19:04 (Ref:2938227)   #9
BobHWS
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Join Date: Jul 2003
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Winston-Salem, NC
Posts: 539
BobHWS should be qualifying in the top 5 on the gridBobHWS should be qualifying in the top 5 on the grid
Quote:
Originally Posted by chillibowl View Post

..combined with your position that the State is overestimating how much in new taxes they will collect because of the race i took that to mean that you were of the opinion that having locals attend the race doesn't matter or make any difference to the financial viability of this event from the State's ability to collect taxes perspective.
Chilli, no, I never thought or meant to imply that it didn't matter whether locals attend the race. Having people from the local and regional areas support the race is definitely important to its success.

Local fans are important for the promoter. Because the promoter makes most of his money from regular ticket sales (Bernie gets all the TV money, all the track signage money and all the hospitality suite money from fat cats and corporations), having a good base of people who can drive to the race the same day is vital to establishing long-term success. Those are the people who will come back year after year. They have lots of those fans in Montreal and England and they don't have many in Turkey and Malaysia, for example.

I do question whether there are enough such hardcore fans in and around Austin Texas. The fans will turn out the first year because it will be a hip thing to do, but we don't know what will happen after that. If the locals stop turning out, then the promoter finds it harder to make money. The track's proximity to Mexico will help the fan turnout, but we don't know how many Mexicans will be able to attend. And what happens if Mexico gets its own race?

As for the question of the supposed economic benefits of the track, I will once again cite this article:

Do Economists Reach a Conclusion on Subsidies for Sports Franchises, Stadiums, and Mega-Events?
by Dennis Coates, Brad R. Humphreys

Abstract

This paper reviews the empirical literature assessing the effects of subsidies for professional sports franchises and facilities. The evidence reveals a great deal of consistency among economists doing research in this area. That evidence is that sports subsidies cannot be justified on the grounds of local economic development, income growth or job creation, those arguments most frequently used by subsidy advocates. The paper also relates survey evidence showing that economists in general oppose sports subsidies. In addition to reviewing the empirical literature, we describe the economic intuition that probably underlies the strong consensus among economists against sports subsidies.
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