Sports: A Worthwhile Investment
It was mostly an evening of light chatter, similar pupu and intense business card swapping. But the panelists at last week’s Business of Sports discussion at the Plaza Club bore a critical message: Hawaii’s small but growing sports industry is dependent on public/private cooperation – translation: money from the state.
This is not an easy sell in a tough economic climate, or to myopic political leadership that would rather waffle on big issues than risk their ego-inflating day jobs.
Though no one brought up the subject directly, and the Q&A ended before I could ask my own Pulitzer-worthy question, the idea of shared sponsorship that was discussed is no different than it was two years ago when then Lt. Gov. James Aiona attempted to create a sports commission to aid these very causes.
SB 2743 called for $100,000 in seed money to fund a volunteer state sports commission that would promote Hawaii as a sports destination while tapping into what the LG claimed was a $4 billion industry. Not surprisingly, the bill was defeated, and what was a problem years ago was passed along to future generations.
One of the panelists, Honolulu Marathon president Dr. Jim Barahal, noted that Hawaii is too small a market to solely support any of the state’s major sports attractions. It was why the failing and nearly bankrupt marathon focused on inviting Japanese runners. The result was, according to a study by HPU professor Jerry Agrusa, an event that in 2011 drew more than 22,000 runners and generated $107.7 million in visitor spending, including $5 million in taxes.
In addition to Barahal, the panel included Diana Bertsch, event director, Ironman World Championship; UH athletics director Jim Donovan; San Francisco Giants minority-owner and Hawaii Winter Baseball founder Duane Kurisu; David Matlin, executive director, Sheraton Hawaii Bowl; and Greg Nichols, general manager at Ko Olina Golf Club.
To a person, the panelists agreed that selling the location is as important as the competition itself, whether Hawaii plays a unique role, as in the Ironman, or as scenic backdrops while returning from commercial breaks, like the Hawaii Bowl and UH athletics. That’s the tough message they have to sell to legislators: Sports as a business is not about making rich athletes even richer at the expense of the state’s hourly workers, but is, in fact, an investment in the economic health of the Islands.
States including Florida, Minnesota and Indiana have made similar investments that have paid off handsomely. According to the Minnesota Amateur Sports Commission website, the organization generates more than $40 million in out-of-state economic impact each year with a total impact of $956 million from 1990 to 2009. High cost and distance will limit the direct financial impact of the events in Hawaii, but the bonus from year-round tourism promotions associated from the events would provided added value.
Of the group, Donovan has probably done the best job securing millions for various on-campus building projects, but outside of some minor checks from the Hawaii Tourism Authority, his colleagues, with the exception of the Pro Bowl, have been kept largely on a short financial leash. The recent LPGA Lotte Championship provided an unprecedented 13 hours of coverage for the state’s largest sports businesses (estimated at $1.4 billion) to Hawaii’s prime target markets, the Mainland U.S., Japan and Korea. It got just $150,000 from the HTA. That’s a great return on its investment.
The Ironman, which Bertsch said is the most media-credentialed sporting event in the state, got $200,000. Value was added when Lance Armstrong began training on the Big Island and tweeted about his workouts along Queen Kaahumanu Highway to his 3.4 million followers. Such exposure is invaluable and a model of how to grow and promote the business of sports in Hawaii.
Whether our elected leaders have the courage or intelligence to think beyond macadamia nuts and palm trees is another matter.