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Racing in the Streets: Does the Indy Do Anything for Edmonton?

The Edmonton Indy, one of 15 stops on the IndyCar Series tour, was held this past weekend. Before the temporary track and stands could be disassembled, calls had already begun for greater corporate and community support, in order to keep the race viable.

Edmontonians are no strangers to calls for subsidizing professional sports. Readers of this blog can infer my thoughts on subsidizing professional sports in general. In addition, I can’t profess to caring that much about auto racing. I’ve never gone to the Edmonton Indy, and wasn’t the least bit upset to be away again for this year’s event. Yet, I think the event – and any value it may bring to the region – merits further examination. Here are some things worth considering.

Honda Edmonton Indy
Flickr/Dave Cournoyer

The Attendance Trap
Edmonton Journal columnist, and publicly-subsidized downtown arena booster, David Staples immediately zeroed in on the issue that IndyCar doesn’t release official attendance figures. Why he didn’t just google “IndyCar attendance” to find some estimates of other races, as a starting point, I don’t know. It strikes me as likely that that last link will produce estimates for Edmonton sooner rather than later.

In any case, attendance is a red herring. One of the biggest misconceptions in sports exists around paid attendance vs gate attendance. Any information Indy may divulge almost certainly won’t distinguish. Paid attendance can help give you an idea of economic activity (new or not), while gate gives you an idea of general interest (primarily among locals). The value to the region of paid heavily depends on who attends (addressed in the next section). If we just subsidized initiatives based on how many bodies show up, initiatives like the Old Strathcona Farmers’ Market would have a good case.

The Nature of Who Attends
The Edmonton Indy is one of only 15 events on the circuit. It is one of only two Canadian stops (Toronto being the other), and there is no American stop in the Pacific Northwest or Mountain West. It looks, then, like the race’s catchment area for Indy fans is pretty big, at least geographically.

It seems to me that you could easily look at some crude measures for an indication of out of town support. Do hotels report higher attendance on that weekend than years prior to the Indy, or other weekends in July? Does it see higher attendance than the second weekend of Capital Ex? Does Edmonton Tourism see a boost in website traffic? These are very imperfect measures, but can serve as a starting point.

I’m not willing to say that the Indy draws a ton of fans from outside the region (who wouldn’t come here otherwise), but there’s enough here to think it could be the case, and deserves more investigation.

The PR Issue
Subsidy advocates will point to exposure Edmonton gets from being on TV, and the exposure to fans of the sport. People always say, for example, that the Edmonton Oilers give the city greater awareness, and this is true among hockey fans. It also, however, overlooks the fact that far more people in markets like the United States don’t follow hockey at all.

It’s hard to quantify the awareness of a sport; I could only find measures for a fan’s favorite sport (and note, in that, Indy is captured under ‘Auto Racing’ with the more popular NASCAR). One way to look at it is TV ratings. The 2011 Indy drew a 0.6, which works out to just under 700,000 households. This is one form of exposure, but begs two questions.

1) Is this the best use of resources to reach 700,000 households?
2) Are we able to portray the image and message about Edmonton that we want to through the Indy?

The Nature of Public Subsidies for Sports
I’m not opposed to subsidies in all forms. I object primarily to two things – first, the wildly exaggerated claims of economic benefit. Second, that most subsidies tend to be of the stadium/infrastructure variety, for facilities that get infrequent use (yes, arena advocates, ~100 nights a year is infrequent), and depreciate in value quickly (which is one of the reasons the Olympics is a bad investments).

The Edmonton Indy isn’t requesting a new facility. In fact, it acts as a temporary venue, converting a soon to be closed airport runway into a racetrack. It’s impact on street traffic is minimal to non-existent. If it is determined that it does bring new economic activity into the region, some form of subsidy that leverages any benefits Edmonton may get could be justified.

Do I think this is the case? There’s likely benefit, but I doubt it’s commensurate with the size of the subsidy the Indy would want/need to continue operating out of Edmonton. But, I think it would be a disservice to the event and to Edmonton to not examine this further, and in greater depth than looking just at who showed up on race day.

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