Recent study shows WM Phoenix Open’s economic impact

A marshal watches over the gallery Thursday on the 16th hole of the 2016 Waste Management Phoenix Open. (Special to the Independent/Nick Krueger)

The 2017 Waste Management Phoenix Open pumped about $389 million into Arizona’s economy according to an economic impact study released by the Arizona State University W.P. Carey School of Business.

The tournament host The Thunderbirds commissioned the study, including ASU’s L. William Seidman Research Institute, the applied research and consultancy arm of W.P. Carey School of Business. The economic impact of the 2017 tournament increased 65.4 percent ($222 million) from a similar study performed in 2012, according to a press release.

“As the ‘Greenest Show on Grass’ from both an environmental and charitable standpoint, the tremendous economic impact of the Waste Management Phoenix Open is yet another reason why Waste Management supports this wonderful tournament that continues to give back to the community in so many ways,” Jim Trevathan, Waste Management executive vice president and chief operating officer, said in a prepared statement.

The study defined and estimated economic impact as the increase in spending and therefore economic vitality in a community as a result of the existence of an event or organization.

For the WM Phoenix Open and surrounding events, this included the expenditures of visitors who identified the WM Phoenix Open as the key factor in visiting Arizona, media from outside Arizona who cover the event, the “organizational spending” by The Thunderbirds, media and event production companies, diverse organizations and businesses involved in operations, event production and activation of sponsorships, plus the indirect and induced multiplier effects.

“The Waste Management Phoenix Open is a remarkable community event. Under the volunteer leadership of The Thunderbirds, the attendance at the event continues to grow with more and more visitors from outside our Valley attending each year,” Dr. Michael Mokwa, associate director of the sports law and business program at ASU’s W.P. Carey School of Business, said in a prepared statement.

“The event has become renowned for blending a fun atmosphere and intense competition. Plus, it is a model for creating a sustainable environment given the partnership with Waste Management. At $389.3 million, the economic impact for the Waste Management Phoenix Open rivals other mega-events that are drawn to the Valley periodically. But, the Waste Management Phoenix Open generates this economic infusion into our economy year-in and year-out.”

The study estimated the total gross economic impact (gross output) of the 2017 tournament, which includes the total amount of direct spending by out-of-town visitors and organizations in metro Phoenix, and indirect and induced impacts of those expenditures.

For the purpose of the study, a visitor was defined as any individual who does not live in the metro Phoenix area for any portion of the year. As a result, no resident expenditure was used to generate the economic impact estimates.

A view of the annual setting of the Waste Management Phoenix Open. (Submitted photo)

The nearly 100,000 non-resident attendees of the 2017 tournament, which accounted for 15.23 percent of all attendees, spent an average $393 per day totaling $140 million.

The Thunderbirds, the PGA TOUR and others associated with the tournament injected an additional $63.1 million in direct expenditures in staging and attending the tournament.

These expenses are numerous and include tents and equipment, food and beverage, administration, signage, parking and security, hotel rooms leading up to and during the event for the players, caddies, PGA TOUR employees and out-of-town media, to name a few.

Economic activity of $325 million was induced by visitors’ and organizations’ expenditures – up from $172.3 million in 2012. This figure was calculated using the IMPLAN economic assessment software with Arizona specific multipliers.

This number is additional impact due to what is referred to as the multiplier effect, or the spending and re-spending of money through the local economy.

When the indirect impact is combined with the direct impact, out-of-town media expenditure ($1.2 million) and total organizational expenditure, the total economic impact becomes $389 million.

In addition, the event-spurred economic activity spurred created incremental state and local sales tax revenues.

Direct sales tax revenue was estimated to be $13 million, through combined direct fiscal impacts in the city of Scottsdale ($4.1 million), Maricopa County ($1.3 million) and the state of Arizona ($7.6 million).

“We’re delighted to see our once humble tournament grow into a vital force for economic development and growth, not only in the Phoenix area, but Arizona as a whole,” Andy Markham, 2017 Waste Management Phoenix Open Tournament chairman and current president of Thunderbirds Charities, said in a prepared statement.

“We take great pride in the positive experience we provide our patrons, and together with our corporate partners, we will continue to our best to draw people and businesses to the Valley.”

The 2018 Waste Management Phoenix Open will be at TPC Scottsdale Jan. 29 to Feb. 4. The 2017 tournament broke four attendance records, including a PGA TOUR record 655,434 fans for the week.

The 2018 edition will mark the 83rd playing of the event (one of the five oldest events on the PGA TOUR) and the ninth as the Waste Management Phoenix Open.

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