The America's Cup: Economic Impacts of a Match - Bay Area Council

Summary
This report has shown that as the third largest economic prize among sports, and a far larger prize than the Super
Bowl or an all-star game, the America's Cup brings with it a tremendous economic windfall. Likely lasting three
months or more, the America's Cup and the racing leading up to the defense, has the potential to increase spending
in San Francisco by nearly $800 million. This increase in spending brings with it a total increase in economic
activity of nearly $1.4 billion. The job creation potential is significant, up to 9,000 positions, with as much as 30%
of these jobs employing low-skilled, low-wage workers.
The potential increase in city revenue is also significant. Conservatively estimated at $24 million, the increased
local tax revenues would be a welcome boost to the city's cash-starved coffers. This estimate is conservative in
that it includes only taxes accruing from hotels and restaurants. Other important sources of revenue are not included;
in particular, direct business taxes are excluded. All in all, this estimate amounts to roughly a 5% increase
in tourism-related revenues. At the same time, the city will surely incur significant costs through the provision
of transportation (MUNI), security, traffic control, and other tourism related services. The net effect on the city's
general fund is likely to be positive, and is estimated to be roughly $13 million.
It is also the case that a great deal of uncertainty exists surrounding the format of an America's Cup on the Bay. It
is possible that the extent of racing will be less than that assumed here. This will naturally reduce the economic
impact. However, the bulk of the benefits come from the activities of the Cup management and syndicates. Most
of these expenditures will occur regardless of the duration or format of the event.
Regardless of the format chosen, it is clear that any of the possible scenarios will result in a significant economic
windfall for a significant number of businesses in and around the city of San Francisco. In addition, a successful
defense of the America's Cup will likely lead to additional events in the future. Over the long term, hosting the
next America's Cup has potential benefits that significantly exceed those presented here.
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