The profitable* Final Four

Four teams remain in the NCAA Men’s Division I basketball championships.

Tomorrow, the number one-seed Louisville Cardinals will square off against the upstart Wichita State Shockers, a nine-seed, for a spot in the national championship. Four-seeds Michigan and Syracuse will play for the other.

If your bracket had those teams in the Final Four, you are in the minority.

In a tournament that reminded us why it’s called 'March Madness', each will play out the Final Four in Atlanta, Georgia. A tremendous sporting event that is sure to draw massive crowds and excitement to the city.

An estimated 100,000 visitors will descend on Atlanta this weekend for the games and festivities. Hotel occupancy rates are through the roof, and the weekend is projected to inject $70 million into the local economy.

But is it all worth it?

At first glance, a major sporting event like the Final Four, the Super Bowl, or even the granddaddy of them all, the Olympics, seems like great exposure for a city. They bring crowds, dollars, and put them squarely on the national, and often international stage. Cities and countries compete fiercely over the right to be a host for such draws and attention.

However, there is much debate over what the true costs of hosting such events are.

In a 2003 report from the College of the Holy Cross, economics professors Victor Matheson and Robert Baade conducted a study of the economic impact on Final Four host cities from 1970 to 1999. In their model, the median estimated economic impact came out to a loss of $6.44 million. Even if a city came out even, they’d be considered lucky.

This problem isn’t just isolated to the Final Four, or the United States for that matter.

The Olympics are the biggest drainers. Every Olympic host city since 1960 has overspent their budget, by an average of 179 percent. The influx of cash from tourism is typically negligible, if not negative considering the costs going into the games and infrastructure. And in the long run, the total financial impact is usually adverse.

Commentators love to talk about how great the Final Four and like-events are for cities, just be ready to take those statements with a grain of salt.

This is not to diminish the all the great things that go along with an exciting weekend like this one, but there is hidden side to all the glitz and the glory.

- Logan Allen