Hochul’s claim of Bills’ $300 million economic impact is doubted by economists
PolitiFact ·
Gov. Kathy Hochul has justified her support for public subsidies to help build Highmark Stadium in Orchard Park, saying in interviews the economic impact of the new stadium for the Buffalo Bills will be $300 million every year.
She recounted being a new governor in 2021 pushing the funds for the new stadium through the state Legislature, where the idea was not popular.
The state provided $600 million in public funds toward the construction of the $2.2 billion stadium.
“I’m not sure they wanted to commit that much money to a sports venue in a place that most of them had never been to,” Hochul told the Democrat and Chronicle in Rochester. “But I was able to be successful. And I showed the economics that, in fact, the Buffalo Bills in the region is about $300 million a year.”
In an interview with Buffalo radio hosts Shredd and Ragan, she said, “It’s a huge economic impact. All the costs and associated, you know, people coming here from all over. It’s $300 million a year for the economy. How do you walk away from that?”
We asked Hochul’s office for the source of the claim that the Bills’ economic impact on the region is $300 million a year, and it sent an “economic and fiscal impact” analysis prepared for Pegula Sports and Entertainment in 2021. The analysis, prepared by CAA ICON based on 2019 data, said it cannot be used in marketing or financing documents. It comes with several caveats, using information believed to be accurate, though no other verification or audit was performed. The authors called their estimates conservative.
Analysts measured the football team‘s economic impact on the city of Buffalo, Erie County and New York State by using data and conducting surveys of fans who attended a game in 2019. They asked fans about their spending related to the game and used multipliers to estimate the economic impact. They measured direct impacts, money spent because of an initial change, like a sports team; indirect impacts, money that enters the economy and is re-spent; and induced impacts, household income spending changes because of the team. They calculated the economic impact on Erie County from the Bills to be $350.2 million a year.
We spoke with economists who study sports teams and stadiums, and they said that commissioned analyses are less reliable than peer-reviewed economic studies.
Fifty years of academic research consistently finds that stadiums have little to no economic impact on host communities, said J. C. Bradbury, a professor of economics at Kennesaw State University.
“The historical evidence suggests that stadiums are not economic engines,” Bradbury said.
Economists’ academic studies about sports are read by anonymous peer reviewers before they are published.
“I’ve never seen a commissioned study not find a positive impact,” he said. “It’s junk science.”
One of his co-authors, Brad R. Humphreys , told PolitiFact that Hochul’s claim is “not credible.”
“It’s garbage in-garbage out and uses the wrong tool to answer this question,” Humphreys said.
Bradbury, Humphreys and Dennis Coates wrote a widely cited paper in 2022 that summarized more than 30 years of research on the topic.
“Though findings have become more nuanced, recent analyses continue to confirm the decades-old consensus of very limited economic impacts of professional sports teams and stadiums,” they wrote.
Victor Matheson , professor of economics and accounting at the College of the Holy Cross, wrote about the Bills in 2022, discounting sports teams’ economic impact . “Most of the customers at a sports venue are residents of the metro area who would simply spend money elsewhere in the local economy in the absence of the team,” Matheson wrote.
The analysis Hochul used to support her claim was questioned by the Citizens Budget Commission, which closely tracks state finances.
The commission wrote in 2022 , “past research most often has found that professional sports franchises and investments in sports facilities do not have significant, consistent, positive economic impacts.”
The commission said that part of the CAA ICON analysis of the Bills’ economic impact was conservative, but that the analysis also assumed that spending directly on games and souvenirs would disappear from the local economy if the team wasn’t there, an approach that “contrasts with the economic literature.”
Critics of the analysis question whether Bills fans would spend their money on other things locally if they weren’t going to games.
“Ultimately, the statement that the Bills are responsible for $300 million in economic activity implies that if the Bills were to disappear, the amount of economic activity would go down by that amount,” said Neil deMause, who has written critically about public subsidies for sports stadiums. He said the report “provides fairly good evidence that there’s $300 million on spending each year related to the Bills, but it makes a less strong case that none of this spending would take place anywhere in Western New York if the Bills did not exist.”
We reached out to the report’s author and CAA ICON but did not receive a response.
Hochul claimed that the Bills have an economic impact in the region of $300 million. An analysis paid for by the team’s owner found that the annual economic impact of the team on Erie County was $350.2 million. This analysis has been criticized by economists who said that its conclusions are not accurate. The accuracy of the analysis is doubted by experts but cannot be fact-checked for our Truth-O-Meter, and we are not rating this statement.