The business behind the games

Sports have already contributed a ton of money to the Inland Northwest economy. Think of the sound of thousands of basketballs bouncing across downtown during Hoopfest, or warming up the Arena during the State B tournament.

That loud shuffling of 100,000 sneakers on Bloomsday comes with a nice accompaniment at the cash register. The annual spring race creates a net benefit of about $9 million, say organizers, due to the large number of out-of-towners spending money during their visit to Spokane.

Area economic planners say Spokane is ready to hear another sound of increasing prosperity: the ripping of tickets as fans push through turnstiles to attend sports events at the Spokane Veterans Memorial Arena or the expanded downtown convention center.

“The promotion and hosting of sports events is a large growth industry for our area,” says Doug Kelley, the chairman of Spokane County’s planning commission and a member of the Spokane Regional Sports Commission.

To propel that growth, Kelley and others foresee an expanding number of event promoters.

Some will make it their full-time business, like Barb Beddor and Toby Steward, owners of Spokane-based Star USA Inc. Their company, which was founded in 1991, has organized and produced more than 20 Olympics-level sporting events in Spokane.This year they scored their largest coup, winning the rights to hold the 2007 U.S. Figure Skating Championship in Spokane. That eight-day event is expected to draw more than 100,000 fans and generate at least $11 million — and perhaps much more — in direct economic benefits.

At the other end of the spectrum are the occasional specialists, like Eric Lee, an Avista energy analyst with a dedication to badminton. Lee has arranged to bring the 2004 Region 4 Far West badminton tournament to the new Sports USA complex in Spokane Valley. The three-day event, from Oct. 8-10, will draw about 200 participants, nearly all from out of town, Lee said.

Lee doesn’t presume that he’ll make much money. Any profit the event generates, he said, will be used to hire badminton coaches “to take badminton in this area to the next level.”

Kelley knows some purists will say, “Badminton — is that really a major sport?” The best answer, he said, is: Who cares? Such events bring in outside visitors and the community receives about $110 a day in direct benefits from meals, lodging and other spending, according to studies cited by the Spokane Convention and Visitors Bureau.

“Look at the volume of people those events bring here, and the time they spend here and the impact is significant,” Kelley said.

The Spokane Regional Sports Commission estimates that sports have a net $30 million economic impact on Spokane County each year. That includes events ranging from Bloomsday to rodeos to high school sports. The figure is larger if you add North Idaho events, said Eric Sawyer, executive director of the commission.

For instance, the 2003 Ironman triathlon competition in Coeur d’Alene — essentially one weekend — produced $4.2 million for the Idaho economy, according to a study conducted by the Spokane Regional Sports Commission.

Sawyer predicts that total revenue from sporting events in the region will approach $60 million annually by 2014.

What’s helped propel the sports-event industry here, say organizers and civic leaders, is a healthy appetite by sports fans, coupled with a dedicated base of volunteers who pitch in to produce major events.

“It’s been a progress over time, where we’ve been able to show we can host major events,” said Kevin Twohig, executive director of the Spokane Public Facilities District, which operates the Spokane Arena.

Events that have taken place in the area include the 1996 Olympic U.S. wrestling trials, the 1997 NCAA women’s volleyball championships, the 2001 NCAA women’s basketball Western regional tournament, the 2002 Skate America figure skating competition, and the 2003 first and second rounds of the men’s NCAA basketball tournament.

Part of the success, added Twohig, is that Spokane is small enough that those events garner immense local interest. The 2002 Skate America competition, for instance, set a new attendance record for the event — 26,684 spectators. In larger cities, such events would be competing with pro teams and other major entertainment draws, Twohig said.

The two big feathers for the community, he added, are Star USA landing the January 2007 U.S. figure skating event, and Spokane being asked to host the men’s NCAA basketball first round just two months later.

Twohig and others give significant credit for Spokane’s sports-event industry to Steward and Beddor, the entrepreneurs who’ve specialized in developing Olympic-level sports events in the area. Sawyer calls them Spokane’s No. 1 risk-takers. They’ve established a reputation for skillful marketing, successful sponsorship planning and developing a dedicated corps of volunteers to stage large events, said Sawyer.

Beddor said Star USA has gradually learned the key strategies for being a successful event organizer. One of them, she said, is selling lots of tickets to prove that Spokane can attract attendees from the entire region, including Canada and as far away as Montana.

When Spokane was chosen over Boston for the 2007 figure skating championship, the selection committee heard plenty of complaints from skating insiders, Beddor said. People didn’t understand why the high-profile event was destined for Spokane, which never has hosted the championship, over Boston, which successfully hosted it in 2001.

But after tickets for the skating event went on sale in the spring, the U.S. Figure Skating Association executive committee learned that Spokane had already sold 34,000 advance tickets for the eight days of competition. That’s the largest number of advance tickets sold for the event, Beddor noted.

“So now they were telling the guy who picked Spokane (over Boston) that he was a genius for that choice,” Beddor said.

She and Steward quickly assign the credit for their success to a strong alliance of Spokane-area groups who’ve backed their efforts.

Beddor, who now receives a yearly salary from the U.S. Figure Skating Association to organize the event, said she and her husband will spend 40 to 50 hours per week preparing for it. The salary she earns, Beddor added, is set by the association.

Between now and January 2007, about half their time will be devoted to enlisting sponsorships from regional corporations. This week, for example, the couple visited Seattle to seek support from a major telecommunications company.

Steward doesn’t draw a salary for his work — yet. Over time, as the budget evolves, he may start collecting a paycheck, he said.

“The (figure skating) budget is constantly moving and being adjusted,” the 42-year-old Steward said.

The amount of money needed will be adjusted, in part, by how many in-kind corporate contributions are pledged, Beddor added.

“If we get someone to donate cell phones for event communications, that eliminates an expense we’d have to plan for,” said Beddor, who’s 44 and was a Spokane radio station manager before switching to event planning 10 years ago.

The budget for the U.S. figure skating championship in Atlanta, held earlier this year, was about $4.5 million. Star USA hopes to come in with about half that figure, Beddor and Steward said. In part, that smaller budget reflects Star USA’s ability to mobilize volunteers, they said. Between now and 2007, the couple will live off past earnings and rely on the income from Beddor’s figure-skating contract.

In the 14 years that Star USA has been operating, it’s had successful years and bad years, Steward said. The couple won’t disclose revenue totals or give details on their profitability.

“But we’re not people with silver spoons in our mouths,” Beddor added. “If we really mess up this next event, we might show up at our relatives’ homes with our hats in our hands.”

The number of other for-profit event organizers in Spokane is limited, Sawyer and others say. Round and Round, a Spokane-based company launched in 1994, has organized mountain bike races and bike events, primarily in Washington and Idaho. Its three-person staff makes a modest profit. “We could make more money than we now do,” said Eric Ewing, the firm’s logistics manager.

Portland-based Jeff Sanders, operating as Jeff Sanders Promotions, has had success bringing in annual golf tournaments to both Spokane and Coeur d’Alene.

More commonly, cities turn to an alliance of nonprofits to host major events. Or they rely on national companies; the November visit to the Arena by the T.J. Maxx Tour of Gymnastics Champions, featuring some U.S. athletes who won gold in the recent Athens Olympics, will be produced by IMG, one of the country’s largest event organizers.

Bob Walsh, the foremost for-profit promoter in Seattle, said it’s not common for cities to have more than two or three companies that are trying to make a buck presenting sports events on a regular basis.

Sports promoters, unlike entertainment companies, tend to take higher risks and can lose more money over time by focusing only on a few shows a year, he said. The upside of sporting events, he added, is that when well done, they can become community festivals that enhance a city’s reputation.

Walsh takes credit for organizing the 1990 Goodwill Games in Seattle. His next major project, he said, will be the U.S.-China Summit, a three-year series of events featuring athletes from across the Pacific Rim competing in a range of Olympic-level sports. The summit will be large enough that he’s considering holding some of the events in Spokane, he added.

If Spokane is ever to reach $60 million a year in economic impact from sports events, as predicted by Sawyer, promoters know the region will need more than the occasional NCAA tourney or figure skating event.

Sawyer and others are convinced the addition of a few new sports facilities will accelerate the growth of the area’s sports-event industry. Gonzaga University’s new basketball arena and the expanded convention center downtown will be valuable additions, Sawyer said.

Kelly, his colleague on the sports commission, predicted the sports industry locally will bloom if the city and county back a proposed plan to convert the former Playfair Race Track into a 63-acre sports complex and entertainment facility. Several East Central and downtown groups are studying that plan.

If that happens, “we have the potential for real economic development,” Kelley said. “That would give us something for the next phase, attracting manufacturers of sporting goods to move their companies here. Those companies would be interested in moving to this area if they looked and found great facilities and a supportive culture that supports that whole lifestyle.”