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Benefits of events

Evan Davis | Notes on Real Life |
22 Jun 07, 04:07 PM

Harold Macmillan famously said that itâ€™s "events, dear boy, events" that make or break politicians.

I don't think he was talking about events in the way we use the word now - events managed by professional organisers, from the Olympic Games, to the Glastonbury festival.

But it is these big events that can make or break cities and towns.

Take the Glastonbury festival, which in fact, occurs in the village of Pilton, population: 1,000 or so. The residents multiply by 100 during the festival.

The tickets generate Â£20m of revenue - so in fact, more money is probably spent by festival-goers during three days, than by the whole village for the rest of the year. Indeed, more sewage is probably created by the festival-goers than the rest of the village too.

This yearâ€™s Glasto will be the biggest yet. They've sold about 140,000 tickets at an average price of Â£145. The on-site power generator consumes about two tankers of fuel a dayâ€¦ there are 23 bars, the biggest of which can serve 10,000 pints of beer an hour at peak times.

Mendip District Council is the licensing authority for the event. It's trying to carry out an economic assessment of it. Consultants have been employed, and the results will be put together later this year.

But for the village and the Mendip district, don't confuse the huge economic scale of the event, with the benefits to the local area. Just because a lot of money is spent, doesn't mean it makes local people rich.

The ticket revenues, the performersâ€™ fees that are paid out, the beer that is brought in by vanâ€¦ It all represents money that comes from outside Mendip, and goes outside Mendip.

In fact, the biggest beneficiaries of Glastonbury are probably the organisers, the participants and the customers.
So why then, do places like Glastonbury so love these events? Why do towns compete for events, sometimes even pay for them?

Well, the answer is that, even if the benefits are only a fraction of the total turnover of the festival, benefits there are.

The local hotels, garages, pubs, make hay while the sun shines, or rain falls, on the outsiders coming in. Plus local charities get support, some of the festival's profits are spent on cleaning and tidying in the village all year round.

In short, what the local district gets out of the festival are some of the crumbs dropped by the visitors - but because the festival is so huge, the crumbs add up to a tidy pile.

And in fact, what Glastonbury does, is a small scale example of what much of the modern British economy does - we host other people's activities, and pick up a portion of the money in the process.

It's what Wimbledon, the tennis tournament, consists of.

Itâ€™s what the City does too. A lot of money comes and goes - but as a little more comes than goes, we can earn something.

So, these "events dear boyâ€¦ ", are not always as profitable as they sometimes seem. But profitable they usually are. And I suspect Glastonbury is a good deal more profitable for the community, than the proceeds of the dairy farm that occupies the space the rest of the year.

Comments Post your comment

1.
At 06:00 PM on 22 Jun 2007,
Christopher Awuku wrote:

People like events such as Glastonbury because people like pleasure time and leisure time. It's that simple.

In my mind, modern mainstream economics focuses too much on the acquisition of wealth and more goods and services, over simply doing things which make us happy. Economics should really be about human action, which leads to human happiness.

2.
At 11:02 PM on 22 Jun 2007,
Adrian wrote:

If you want to know the true benefitas the villagers recieve.
I thought I should enlighten you to the fact that Peter Eavis, gives free tickets to all his neighbours in Pilton. If you ever visit the bar next to the acoustic tent you will find the surreal sight of local farmers, in barbours and green wellies, discussing cost of milk, next to mud covered revellers discussing the latest indie band.

3.
At 12:36 AM on 23 Jun 2007,
wrote:

Evan's points are more evident in my home town of Wembley, where when the Stadium closed for rebuilding in 2000, it was apparent how much money came into the local economy on match days. Pubs and businesses, who would receive a windfall in trade on match days, closed down over the seven years that Wembley was closed, and the high street went downhill.

However, with the new Wembley, money has now begun pumping in, particularly for regeneration ahead of the 2012 Olympics.

And for all us residents who used to complain about match-day hassles, I think we all have missed Wembley until its reopening earlier this year.

4.
At 07:27 AM on 24 Jun 2007,
Rhys Jaggar wrote:

Go and speak to Cheltenham. The festival generates tens of millions in revenues for the local economy. And because thousands make a week of it, it's the hotel trade's biggest week of the year.

Speak to Birmingham and the effect the NEC has on the economy. That why ExCel has been set up in London....

Think about 5000 political hacks turning up in Brighton.

If you want to benefit the local economy, visitors/attendees have to spend money in the local economy. Hotels, restaurants, pubs.

And as we're still too prudish.self-righteous/priggish/'religious' (don't make me puke!) to condone the buying of sex, Prague will continue to reap the benefits of that lucrative trade.....

5.
At 05:13 PM on 24 Jun 2007,
Ian Kemmish wrote:

Given how many crusties attend, it might be fun to calculate Glastonbury's carbon footprint....

6.
At 10:57 AM on 25 Jun 2007,
Ian Okey wrote:

In the late 1980's the two diving clubs in Street and Wells used to run stalls in the Glastonbury festival. These would raise enough over the one weekend to allow us to buy new boats and equipment and to run the club for the year. Having access to an event like this meant that we did not have to spend all year running fundraising events.

7.
At 11:58 AM on 25 Jun 2007,
Lena wrote:

It would be interesting to know what the effect of the festival is on the long term financial benefits of Pilton such as house prices.

I suspect that the issuing of free tickets to residents each year has a positive effect on house prices as there are many people that would pay a premium for that benefit.

Likewise, it would interesting to know what happened to the value of the row of houses that overlooked the old Highbury stadium after it closed down.

8.
At 02:57 PM on 25 Jun 2007,
kate wrote:

It depends on how you quantify the externalities as to whether you end up concluding that Glastonbury brings a net positive benefit to local people, surely?
What positive value do you place on the free tickets they get for the event, for example? And what negative value do you place on the inconvenience of the noise, litter, crowds, road congestion, etc etc?
I'd be interested to hear whether (and how) these consultants are going to attempt this.

9.
At 07:30 PM on 25 Jun 2007,
Jilla wrote:

Evan confuses local people liking events with local councils/businesses liking events because they make money out of them.

I live about half a mile from the site of a major music festival. I hate it, to the point where each year I leave my village for that weekend. I don't doubt that the local bars, hotels etc do well out of it, but for the residents, it means noise, transport and parking chaos, litter, drunks staggering about, the lot. What benefit do the residents get?

The council probably makes plenty from the festival, but they don't spend the moeny on the village that suffers, preferring instead to concentrate it on the area's main town, 20 miles away.

10.
At 10:32 PM on 27 Jun 2007,
Mich wrote:

Jilla, I think you are probably overlooking the fact that the local bars etc making a windfall profit for one weekend will have a positive impact on yourself for the rest of the year.

11.
At 11:03 AM on 28 Jun 2007,
Ellie Rose wrote:

The consultants responsible for studying the economic impact of Glastonbury Festival is Baker Associates, a Bristol-based town planning and economic consultancy.

The research is structured into four main sections. Firstly, on-site surveys were conducted over the weekend to ascertain the direct, in-direct and location of expenditure of festival go-ers. Secondly, festival traders were questioned to establish how much money was made over the festival period. Thirdly, business questionnaires will be conducted to establish the impact on businesses in the local area. Fourthly, case study interviews will provide a more rounded portrayal of the economic impact of the festival.

These four sections combine to understand issues such as expenditure, job creation, increased trading opportunities and impact on perception of the local area. The results will feed into an economic model to give us an idea of the total impact on the area.

The results will be available in the autumn.

12.
At 04:43 PM on 04 Aug 2007,
Tony wrote:

Hi Evan... I came across your "Blogg" I assume this is what it is! via a search on google "How much money does wimbledon make a year?"

So my initial interests are economic I suppose. But was intrigued further when I got here, by the slogan/partial quote "...understand the real world, using the tool kit of economics."

I am embarking on an attempt to help my 20 year old son raise funds to satisfy his insatiable appitite for tennis.

All avenues in the UK are exhuasted so we are now looking to the US for coaching.

Big problem "Money!"....

My question... If the LTA had any real intent to find a british champion with all their money you tell me they couldn't find one?... hats off to Richard Williams "ra! ra!"

My son needs Â£150k over the next 3 years just to realise his potential... He will have to spend something like that to get him up to par... then what ever else after should he make the top 100.

No one is interested before he makes the headlines... yet he needs the money now more than he will then.

Interested to hear your response..

This really only is the beginning of the conversation....
hope it hasn't come across as a rant....

My point really is the talent is here... plain for me to see in the years I've spent at junior tournaments with my son when he was a junior... and believe me he has been assessed by some reputable people.

Thanks for reading at least....