WILMETT, Illinois – Sports tourism is big business and many companies are involved on all sides of this equation.
In this month’s column, we examine the numbers and strategies that are serving as catalysts for economic development.
It is typically defined as traveling to a destination specifically for a sporting activity (e.g. racing, testing, recreation, etc.) or visiting a sport-related attraction (e.g. race track, car museum, race shop, etc.).
It is estimated that peg sports tourism in the United States generates $103 billion per year and is growing at nearly 6 percent annually. This includes both direct and indirect expenses.
The NASCAR Cup Series field runs to a green flag at the Circuit of The Americas in Austin, Texas. (Photo by HHP/Chris Owens)
Much of the focus has been on the attendees or visitors and when, where and how they spend those dollars.
Equally important are the organizations that organize events and try to attract participants to these activities. They need new revenue streams, and raising taxes or increasing fees is not a popular policy.
Sometimes business people need to spend money to make money. This is where sponsorship becomes part of the conversation.
To assess whether this makes sense, certain questions should be considered: How will this spending be viewed by residents and will it generate the expected revenue?
There are several reasons why cities will accept sponsorship. Destinations want to increase awareness, build brand awareness and promote business development.
One of the biggest places for sports sponsorship is Texas, where officials have enacted legislation to support projects throughout the Lone Star State.
The Texas Event Trust program consists of three separate funds – the Events Trust Fund, the Major Events Reimbursement Program and the Motor Sports Racing Trust Fund.
The aim is to attract different types of events. Funds can help communities pay for costs associated with preparing or hosting an event. You will remit profits from various local and state taxes derived from the event into a special event specific account to cover allowable expenses.
The largest state pays out more than $100 million for these categories. About 60 percent for the largest events and 40 percent for smaller activities.
Most recently, Circuit of The Americas in Austin was one of the biggest recipients. Officials requested nearly $40 million for the track’s most recent Formula 1 event and $6 million for a MotoGP weekend. The NASCAR Cup Series race at Texas Motor Speedway was scheduled for $10 million and NHRA was scheduled to receive $3 million for its Texas Motorplex event.
Other Texas esports events to garner support included the $16 million NCAA Final Four and $5 million for WrestleMania.
Obviously everything is bigger in Texas and the appetite for supportive events is as big as it gets!
This story appeared in the April 19, 2023 issue of SPEED SPORT Insider.
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