- The Richmond Coliseum sold out for the Colonial Athletic Association championship. But is the economic impact of the basketball tournament really $6 million? Photo courtesy VCU/Scott Brown Photography
The old dungeon was rocking. With four minutes left in the Colonial Athletic Association championship game March 7, the madness reached a fevered pitch while Virginia Commonwealth University clawed its way back from an 18-point deficit.
The supposedly decaying Richmond Coliseum, with its heavy concrete and dungeonlike features, morphed into hoops nirvana: 11,000 screaming fans; chest-rattling chants; bouncing, face-painted students; brass bands blasting during timeouts. For two hours the Coliseum, before a national audience on ESPN, seemed more than capable as a first-tier basketball city.
Then the air went out. VCU lost to rival Old Dominion by 5 points. The fans went home. And so did the CAA's big money machine — but not before leaving Richmond $6 million richer. Or did it?
The economic impact of the city's showcase basketball tournament, which spans four days, has been praised by Mayor Dwight Jones and civic leaders as Exhibit A in the case for building a new, $147-million downtown arena.
But the numbers are misleading. That $6 million economic-impact figure is closer to $4 million, according to a market study from March 5-8, 2010. Subtract dollars spent by locals (that money isn't considered new money, but shifted from somewhere else), along with team expenses, Coliseum expenses, ticket sales, league revenues and other nonretail money streams, and the total impact in 2010 falls further, to about $1.7 million.
One of the great economic generators of such tournaments, the theory goes, is that increased spending creates a “sales multiplier,” such as more shifts at local restaurants, which lead to more spending by people who work there. But, for example, that $1.7 million also includes spending on gasoline and parking, businesses that require little staffing. A few extra parking attendant shifts might be necessary, but when was the last time someone at the station pumped your gas?
Hotels get the lion's share of the loot — a little more than $1 million, with 13,000 out-of-town visitors staying for the weekend, according to the 2010 study, while spending at downtown restaurants totaled $440,000.
At Comfort, a nearby restaurant on West Broad Street, business increased on Saturday for dinner and brunch was busy on the following Sunday, but it could have been better, chef Jason Alley says. “We got a nice early turnout” on March 5, the third day of the tournament, he says. “Sunday was a really strong brunch for us. And Monday was a pretty regular old Monday.”
Clearly, the closest hotels are the big winners.
“It's probably the biggest weekend of the year for us,” says Tom Underwood, general manager of the Richmond Marriott, which serves as the tournament's de facto headquarters. All 410 rooms were booked about a month in advance, and the hotel's sports-bar themed restaurant, T-Miller's, set a weekend sales record. (Saturday, March 5, took the cake, ringing up more than $20,000 in sales.)
The tournament also sent plenty of business to the Hilton Garden Inn across the street, the former Miller & Rhoads department store building. It sold out March 5. “It went fantastic,” says John Cario, the hotel's manager.
Despite the tournament, though, overall hotel occupancy in March 2010 didn't reach what the industry considers break-even in the lodging business. Occupancy at hotels within a 1-mile radius of the coliseum was 62.7 percent in March 2010, according to Smith Travel Research. (April 2010 dipped slightly to 57 percent.) To break even, most hotels need to average 65 percent occupancy.
That's not to say there isn't economic impact. The league's decision to keep the annual tournament in Richmond might be hurting others. Stephen S. Fuller, director of the Center for Regional Analysis at George Mason University, found that the CAA tournament would have a greater economic impact if the league moved it out of Richmond. The December 2009 study concludes that moving the tournament to Washington or Philadelphia would lead to more dollars being spent, $4 million more in Washington and $6.2 million more in Philly. The rationale seems obvious — larger cities present more spending opportunities.
But there's good reason why Richmond continues to hold the tournament. Five of the league's teams are from Virginia, and Richmond is centrally located on the East Coast. It's easy to get in and out.
Nathan Tomasini, executive director of the Center for Sport Leadership at VCU and author of the 2010 study, says moving the tournament to a larger city likely would lead to fewer fans. “It's not likely that the amount of people that travel from Richmond from ODU will be the same,” he says of moving the tournament. “It's more expensive.”
Indeed, the coliseum certainly didn't suffer the fate of other, higher-profile league tournaments. That two Virginia schools were in the CAA championship helps fill stands. During the Atantic-10 championship Sunday in Atlantic City, for example, there were scores of empty seats as the University of Richmond and the University of Dayton played for the title. (UR and VCU both made the NCAA tournament, by the way.)
Sure, the Coliseum is old and rickety, but people care more about location. To wit: Tomasini's study found an alarming disapproval of the Coliseum. In a survey of fans, 34.9 percent of the respondents said they'd prefer moving the tournament out of Richmond; 28.8 percent had problems with the Coliseum or the city; and 15.4 percent were either disappointed with the tournament or had issues with tickets or seating.
Only 16.3 percent of those surveyed felt the “Coliseum and the CAA staff are doing a wonderful and exceptional job.”
Still, they came back this year, setting an attendance record at the dungeon. S