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Monday, July 29, 2002

FORUM: Strike would be costly, and not just in money



By George Vredeveld
Guest columnist

        The cost of a strike of MLB would have an immediate impact on the Cincinnati area due to loss of spending on part of non-area fans, media and other operations such as umpires and visiting teams.

        Because of the loss of spending, including concessions, hotels and retail sales, local businesses would reduce their spending on goods and services in the area. Our estimate is that the impact of the loss of direct out-of-town spending plus the secondary impact of reduced spending by businesses that are directly affected by this spending would equal $1.43 million per game. We assume that area fan spending would be redirected to other activities in the area and thus would not have an impact on the area.

GUEST COLUMNIST
    George Vredeveld is a professor of economics at the University of Cincinnati and president of its Economic Center for Education and Research.
        With a longer strike, the per game impact would increase. We can assume that if the strike were to last only a few games, the Cincinnati Reds would not significantly reduce their workforce or other spending on operations. But if the strike were to be prolonged, the Reds would reduce their spending and the per game impact would increase.

        Likewise with the players' salaries, some part of these salaries is spent in Cincinnati. A long strike would cause players to spend less in Cincinnati. Our estimate is that a long strike would create a loss of economic activity in the Cincinnati area of up to $1.9 million per game.

        As a side note, much of the value to baseball is probably something that is not reflected in revenues to businesses. Baseball has a large fan base and these fans continually demonstrate that they will give up their time to watch or listen to baseball games on television or radio and follow it in the newspaper. The time (a valuable resource) they spend following baseball is one indication of the value they attribute to the game.

       



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