March in Austin has its madness with South by Southwest, Star of Texas Fair and Rodeo and NCAA basketball tournaments. But May is gaining fast, adding the summer X Games to its list of events. It’s another feather in Austin’s ballooning events nest and, like Formula One, the games enhance the city’s international profile.
Landing that event in Austin, which will host the summer X Games from May 2014 through May 2017, is a big deal. Last year, the four-day attendance total for the Los Angeles X Games was 144,700. While the economic impact to Austin has yet to be determined, the competition generated about $50 million for the city of Los Angeles in 2010, according to estimates. Of that, worldwide media exposure accounted for $20 million. That spotlight now shifts to Austin.
As you might know, the X Games, created by ESPN, are akin to the Olympics of extreme and action sports, such as skateboarding (on ramps and on street courses), BMX racing, motocross (motorcycle racing on off-road tracks), and rallycross (car races on closed dirt or paved courses). Competition is fierce, exciting and daring. Winners receive gold, silver and bronze medals. This year, the X Games expanded to an international series with six stops, including Barcelona and Madrid. They are televised in 182 countries outside the United States.
But as the American-Statesman reported this week, it’s not all sports. To the delight no doubt of many Austin residents, there will be entertainment in the X Fest sports and live music festival that runs concurrently with the games.
We applaud the efforts of Austin Mayor Lee Leffingwell, other city officials and the Circuit of the Americas who worked to bring the games to Austin. The 2014 X Games will be staged at the Circuit of the Americas from May 15 to 18. The track and entertainment venue is home to the Formula One U.S. Grand Prix.
The competition will fall at the same time as graduation at the University of Texas. Leffingwell and a UT spokesman told the American-Statesman that the confluence wouldn’t create any insurmountable problems. Good to know. But the city, UT and Circuit of the Americas all must work together to keep that promise, given the additional challenges on traffic and public safety.
Austin emerged as a finalist, beating out Detroit, Chicago and Charlotte, N.C., when ESPN last year began searching for a new home for the North American summer games. The search for a new home was triggered when ESPN and the Staples Center in downtown Los Angeles could not reach an agreement on an extension. But L.A.’s loss is our gain.
The X Games fit nicely with an emerging lineup of sporting and entertainment events that are helping to keep the COTA venue viable. That is in Austin’s best interest, as such events boost business for local hotels, restaurants and shops. The city benefits from the added revenue big events generate in sales taxes it collects on merchandise, hotel rooms, sales of food and beverages and other items. An economic study on the games’ impact to the Austin economy has yet to be completed, but whatever that figure is will more than cover the city’s modest investment. As part of COTA’s bid, the city agreed in May to waive $150,000 in fees, including police officers to provide security. The City Council still must make that official with its vote.
Along with that, COTA officials anticipate that the X Games would qualify for money from the state’s Major Events Trust Fund. The next step is for COTA to provide an economic impact study for the Austin games as part of its application to the state of Texas. It successfully did that in the case of Formula One, obtaining $29.3 million for last year’s race. Under the agreement with the state, Formula One is eligible for such reimbursements over a 10-year period based on an annual economic impact study.
The issue of using publicly financed incentives to woo companies or events is controversial because it puts government in the business of picking winners and losers. Also, there is no consensus among experts that incentives accomplish their goals. In other words, there is much uncertainty about whether incentives are the deciding factor in persuading a business or event to locate in one city versus another. Our view is that incentives should be used sparingly with each case reviewed individually with criteria that make sense for Austin.
In bringing the X Games to Austin, the incentives make sense.