THE Economic Impact of the 2021 USSSA Challenge Cup

of the 2021 USSSA Challenge Cup

2021 USSSA Challenge Cup

ECONOMIC IMPACT OF THE 2021 USSSA CHALLENGE CUP

BY ALEX VAMOSI, Ph.D.

Introduction

In January 2021, over 3,000 athletes, coaches, team organizers, and family members traveled to Florida’s Space Coast to participate in the third annual USSSA (United States Specialty Sports Association) Challenge Cup, a national slowpitch and softball tournament. Conceived by Strojan Kennison, Director of Conference USSSA, the Challenge Cup tournament is like an all-star competition or “Olympics of Softball” made up of State/Regional teams. Men and women from around the country (and Canada) put their best players together to compete for their region. In keeping with USSSA’s desire to promote sports diversity and equal opportunity, the Challenge Cup advances competition at four different levels for Men, and three levels for Women.

The tournament, which includes 72-hours of consecutive play, was held January 21-24, 2021, at Space Coast Stadium Complex located in Viera, Florida. This newly renovated complex provides an idyllic setting for amateur athletes to showcase their skills and to experience the pleasure of competing at a professional quality venue. Boasting 15 all-turf fields, the Space Coast Complex is wholly suited to host large-scale athletic competitions such as the Challenge Cup. Also, with 163 teams competing in this year’s event, the tournament drew a large influx of visitors to the Space Coast, providing a financial boost to Brevard County’s tourism industry during a period fraught with economic challenges.

In the following pages, we explore the history of the Challenge Cup event as well as spring baseball in Florida and the Space Coast and present an economic impact analysis of the 2021 Challenge Cup. A Short History of Baseball in Florida and the Space Coast

When people think about visiting Florida, the images of sunshine, beaches, rocket launches, and theme parks are some of the first things to come to mind. Sports enthusiasts might also reflect fondly on college football bowl games (Orange Bowl), stock car racing (Daytona 500), and spring training baseball. Spring training for organized (professional) baseball has a long tradition in Florida, dating back to 1888 when the Washington Nationals spent three weeks training in Jacksonville. But it was not until 1914 that spring training truly began to take root in the Sunshine State, and by 1929, ten out of the sixteen major league baseball (MLB) teams held their training sessions in Florida. https://floridagrapefruitleague.com/history/

Spring training and professional baseball did not reach the Space Coast until 1994 when the Florida Marlins and Brevard County Manatees (a minor league affiliate of the Marlins) became the first tenants of the newly constructed Space Coast Stadium. Space Coast Stadium has served as the spring training facility for three MLB teams, including the Marlins (1994-2002), Montreal Expos (2003-04), and Washington Nationals (2005-2016). The Manatees played in the Class-A-Advanced Florida League and were Space Coast Stadium tenants for the entire period (1994-2016.) https://en.wikipedia.org/wiki/USSSA_ Space_Coast_Complex

USSSA Space Coast Complex

USSSA relocated its headquarters from Kissimmee, Florida, and moved into the Space Coast Stadium and its surrounding facilities in 2017. This filled the void created by the departure of the Nationals and Manatees after the 2016 season. Since its founding in 1968, USSSA has grown into an industry leader in hosting youth sports tournaments, with a particular niche in amateur baseball and softball.

After a $32 million renovation project, USSSA began hosting youth sports tournaments in January 2018 in the renamed USSSA Space Coast Complex. Jointly funded by USSSA ($22 million) and Brevard County ($10 million), the upgrades produced an all AstroTurf venue that currently houses 15 fields, including three championship stadiums equipped with High Definition video boards. The complex also includes

an 18,000 square-foot indoor facility that athletes use for training and rehabilitation. The three championship fields include: the 8,100 seat Space Coast Stadium; a 225-foot field; and a 175-foot venue specifically built for youth players eight years old or younger.

The remaining 12 fields include four 385-foot baseball fields, four 325-foot baseball/softball fields, and four 225-foot softball fields. The 2021 Challenge Cup utilized nine of these ballparks. Challenge Cup Background

Through email correspondence, Strojan Kennison shared some background information about the USSSA Challenge Cup and personal insights about the event. Several motivations provide the impetus for creating the Challenge Cup. From a business perspective, it was one way that the USSSA could distinguish itself from other associations involved in amateur athletics. Personally, Kennison aspired to create the “Olympics of Softball,” an event that would foster a “bond amongst players at all levels.” In this sense, Kennison’s vision is firmly aligned with The Olympic Charter, established by Baron de Coubertain, which states:

“The practice of sport is a human right.” Everyone should be able to play sport “without discrimination of any kind and in the Olympic spirit, which requires mutual understanding with a spirit of friendship, solidarity and fair play.” https://www.bbc.co.uk/wales/raiseyourga/sites/ dedication/2012/pages/olympic_history.shtml

Challenge Cup organizers have also been very aggressive in growing the event. After only four months of planning, 23 teams competed in the inaugural Challenge Cup held March 1-3 in 2019. In 2020, the Challenge Cup grew to 74 teams and moved to a January schedule. Organizers also expanded the tournament to include five levels of competition for men, three levels for women, and specialty competitions for seniors and players who served or currently serve in the military/civil service. Before the Covid-19 pandemic, the 2021 Challenge Cup was on track to host over 220 teams. Despite the severe state-level travel restrictions and border shutdowns that the Covid-19 pandemic placed on players, the 2021 Challenge Cup attracted 163 teams competing in seven divisions. Organizers of the event expect the exponential growth to continue in 2022. Planning is currently underway to expand the 2022 field to as many as 500 ballclubs.

TABLE 1: 2021 USSSA CHALLENGE CUP • 163 Teams Overall in 7 Divisions • 113 Men’s – 20 Major Teams, 29 ‘C’, 35 ‘D’, 29 ‘E’ • 50 Women’s – 16 Major, 16 ‘C’, 18 ‘D’ • Men’s Major Champion – Georgia • Women’s Major Champion – North Carolina

Table 1 lists some of the highlights of the 2021 event, including the State champions in the men’s and women’s Major divisions. Interested readers can find summary reports for the 2020 and 2021 Challenge cup at the following. https://www.softballcenter.com/2021-usssachallenge-cup-mens-major-tournament-report/ https://www.softballcenter.com/2020-usssa-challenge-cup-tournament-report/

A three-person research team from Florida Tech and the Space Coast Office of Tourism developed the survey instrument for the Challenge Cup. An online link to the survey was sent to players and team organizers and was made available through Alchemer (formerly Survey Gizmo). The instrument’s design funneled participants into four different groups depending on whether they paid for lodging and other expenses directly to vendors, wholly or partially to team organizers, or if sponsors bore the cost. To calculate valid and reliable estimates of average spending per party and per person, we utilized the surveys that fell into the first category: participants who paid for lodging and other expenses directly to vendors. A total of 109 fully completed, uncontaminated surveys inform the analysis. Profile of Survey Respondents

This section presents a profile of demographic, geographic, and lodging characteristics of the 109 respondents who fully completed the questionnaire and paid for accommodation, restaurant, and other expenses for their PARTY directly to the vendors. Figure 1 shows a breakdown by division and gender, which is quite different from the actual distribution of participants reported by USSSA. The most striking feature in the data is that it is heavily skewed towards male respondents, who make up over 98 percent of the sample. Regrettably, the lack of female respondents in the data makes it inappropriate to (statistically) compare the men’s and women’s population groups.

The Challenge Cup is a national tournament that brings together players from all regions of the country. To determine the regional representation within the sample, we linked primary residence zip codes to the state of origin. We then sorted it into the four geographic classifications used by the U.S. Census Bureau (Northeast, South, Midwest, and West). As a point of reference, the South region includes areas that extend northeast to Maryland, Delaware, and the District of Columbia and southwest to Oklahoma and Texas. We then compared the regional distribution in the sample to the distribution of the U.S. population in 2018 (based on U.S. Census data).

FIGURE 1: DISTRIBUTION BY DIVISION AND GENDER

0.0% 10.0% 20.0% 30.0% 40.0% Mens Major 14.7%

Mens E Division 23.9%

Mens D Division 37.6%

Mens C Division 22.0%

Women Major 0.9% Womens D Division 0.9%

As depicted in Figure 2, the two regions with the most extensive population base (South and West) also have the most significant representation within the sample. Together, these two regions are moderately over-represented in the data. In contrast, the proportion of respondents from the Midwest is about ten percentage points below its population share. Figures 3, 4, and 5 provide a snapshot of the lodging profile of participants who purchased accommodations to satisfy their

FIGURE 2: DISTRIBUTION OF SURVEY RESPONDENTS BY REGION

Northeast

MIdwest

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 16.5%

11.0% 20.9%

17.2%

42.2% 38.1% 30.3% 23.8% % of Sample % of Population

South West

overnight lodging needs. The USSSA has a stipulation requiring that ALL teams find lodging in Brevard County during an event. USSSA facilitates compliance by providing registered participants a list of local hotels, condos, and other short-term rentals located in the area. As expected, hotel/motel was the most popular lodging type selected (64 percent), followed by short-term rentals, such as Airbnb, Homeaway, and VRBO (32 percent). Overwhelmingly, party sizes were

FIGURE 3: ACCOMMODATION TYPE

0.0% 20.0% 40.0% 60.0%80.0% 100.0%

Hotel/Motel Short-Term Rental, AirBnB Homeaway, VRBO, etc. We Stayed with Friends/Family Condo Other

31.2% 64.2%

1.8%

.09% 1.8% small. Almost 75 percent of the accommodations secured were for one or two people.

FIGURE 4: SIZE OF PARTY

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

1 2 3 or 4 5 or 6

7.3% 29.4%

18.3% 45.0%

FIGURE 5: NUMBER OF NIGHTS THAT ACCOMMODATIONS WERE PURCHASED

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

1 2 3 4 5 6 7

6.4% 4.6%

3.7% 1.8% 11.0% 28.4% 44.0%

The average number of nights that a party purchased lodging was 3.5 nights. The most frequent length of stay that respondents reported was three nights (44 percent) and four nights (28.4 percent), respectively. Although the Challenge Cup overlaps four days, participants who are knocked out of the tournament early may decide to shorten their visit. Others may choose to extend their visit beyond four nights and use the added time to engage in a leisurely vacation. About 11 percent of visiting parties reported staying for two or fewer nights, while the remaining 16.5 percent extended their stay beyond four nights. Brevard County tourism officials and stakeholders recognize that the long-term sustainability of the tourism sector is dependent on its ability to convert first-time guests into repeat visitors. With sustainability as the backdrop, survey respondents were asked the following question: “How likely are you to return to Brevard County (aka the Space Coast) for a leisure vacation?” A five-point Likert scale, ranging from “1 = very unlikely” to “5= very likely,” was used to measure the responses.

Figure 6 reports the breakdown of scores for the two sub-groups. About 50 percent of all survey respondents indicated that they were “very likely” to return to the Space Coast for a leisure vacation. Repeat visitors had a moderately higher percentage (54 percent) than first-time visitors (44 percent). When we add the response “somewhat likely” to these estimates, about 60-62 percent of respondents in the two cohorts indicate that they are likely to return to visit the Space Coast. Compared to previous polls reported in the Space Coast Tourism Journal, these estimates are significantly lower. We suspect that the relatively weaker scores conveyed by 2021 Challenge Cup participants are related to social distancing and masking guidelines adopted by many hoteliers and restaurants in the region. Economic Impact Analysis

The economic impact of a sports tournament on a regional economy depends on the spending of non-local visitors who participate/attend the event. In the context of the Challenge Cup, Brevard County is the regional economy impacted by the inflow of new money. The non-local participants/ attendees include players, coaches, umpires, and other team and family members residing outside of Brevard County. The economic impact analysis presented in this report uses the inflow of money to the Brevard Economy solely from non-local visitors.

FIGURE 6: LIKELIHOOD OF RETURNING TO BREVARD COUNTY FOR A LEISURE VACATION

Very Likely

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 44.4%

54.0%

Somewhat Likely

7.9% 15.6%

Maybe

Somewhat Unlikely

Very Unlikely

6.7% 6.3% 6.7% 15.9% 26.7%

15.9% First Time (n=45) Repeat Visitor (n=63)

Concerning this study, readers can also interpret economic impacts as the economic activity Brevard County would have lost if USSSA had not hosted the Challenge Cup in Viera.

Visitor Expenditures and Population Count

The first step in deriving the economic impact of the Challenge Cup is to estimate the total spending made by non-local visitors within Brevard County during the event. Total outlays are a function of average expenditure per person and population count. The data came from survey respondents who reported the dollar purchases they made within Brevard County in seven broad categories. Figures 7 and 8 summarize the average spending per person in dollars and as a percent of total expenditures, respectively. A typical person spent about $289 while attending the Challenge Cup event. Lodging and dining/beverages accounted for 65 percent of the total, while retail purchases and recreational activities accounted for another 19 percent.

Survey data will typically produce valid and reliable estimates of the average spending made by the participants/ attendees of an event. In contrast, population counts are trickier to estimate, even when entering a venue requires a ticket, such as the Challenge Cup. Ticket counts are problematic because a ticket system cannot distinguish between sales made to local and non-local visitors or identify the number of days that a person participated/ attended the Challenge Cup. Consequently, ticket counts tend to have an unrealistically high population count.

Instead of ticket counts, we used the roster list that each team was required to submit as a starting point to estimate the non-local population count. The roster lists are publicly available on the USSSA Challenge Cup website. A total of 163 teams registered for the event, including 113 men’s and 50 women’s teams. The total number of players listed was 2,360, equating to an average roster size of 14.5 players. Next, we revised this estimate upwards to account for non-playing team members not listed on the roster (coaches, trainers, umpires, scorekeepers) and travel companions such as spouses, boyfriend/girlfriends, and other family members. Because of state shutdown and travel restrictions, we added a total of 5.5 people per team (1.5 non-playing team members plus four travel companions). This modest increase raises the average

FIGURE 7: AVERAGE EXPENDITURE PER PERSON

Lodging Dining & Beverages Retail Purchases Recreation Gasoline Local Transport Other

$0.00 $20.00 $40.00 $60.00 $80.00 $100.00 $120.00 $110.70

$27.96 $25.29 $19.66 $12.92 $15.40 $77.15

FIGURE 8: EXPENDITURES PER PERSON AS A PERCENT OF TOTAL

GASOLINE 7%

RETAIL PURCHASES 10% OTHER 5% LOCAL TRANSPORT 4%

LODGING 38%

RECREATION 9%

DINING & BEVERAGES 27%

number of visitors to 20 people per team and the total population of non-local visitors to 3,260 people. This baseline estimate is the population count used to estimate the economic impacts of the Challenge Cup. For comparison purposes, we also calculated the economic effects under the assumption that there were 24 visitors per team. Under this scenario, the total population count is 3,912.

Multiplying the average expenditure per person by the population count yields an estimate of the total spending transacted by non-local visitors who participated/attended the Challenge Cup. Table 2 summarizes the total expenditures for each category of purchases for the two population counts. We used IMPLAN™ and the expenditure totals from Table 2 to produce the final economic impacts described below.

IMPLAN™ is a software tool that uses input-output modeling and multipliers to quantify the direct effects of an event on employment, income, and output, as well as estimate indirect and induced impacts. Direct effects refer to the initial spending made by individuals who attended/participated in the event and by businesses to host/stage the event. The initial expenditure directly attributable to an event, such as the Challenge Cup, becomes income to other companies and households, increasing spending within the regional economy.

TABLE 2:TOTAL EXPENDITURES

Count Lodging Dining & Beverages Recreation Retail Purchases Gasoline Local Transport Other Total

3,260 $360,869 $251,497 $82,459 $91,151 $64,096 $42,122 $50,209 $942,402 3,911 $432,932 $301,719 $98,925 $109,353 $76,896 $50,533 $60,235 $1,130,594

Induced effects refer to the additional increases in expenditures made by families in the economy, and indirect effects are the impacts stemming from business-to-business purchases in the supply chain taking place in the region. Together, the indirect and induced effects constitute a “ripple effect” that occurs within the study area because of the direct expenditures made in a sector.

Multipliers predict the “ripple effect” associated with a change in economic activity for some variable. A multiplier measures the total effect per direct effect within the region. For example, suppose an output multiplier is 2.25. In that case, every dollar of production generates $2.25 of activity in the economy: the initial dollar measuring the direct effect and the additional $1.25 effectuated by the ripple effect.

Table 3 summarizes the economic impact of the 2021 Challenge Cup on the Brevard County economy for the two population counts described above. We present estimates for four major economic indicators. Employment impacts are an “industry-specific mix of full-time, part-time, and seasonal employment” and are not equal to full-time equivalent. Labor income includes all forms of employment income.

N = 3,260 Employment Labor Income Value Added Output N = 3,912 Employment Labor Income Value Added Output

TABLE 3: THE ECONOMIC IMPACT OF THE 2021 CHALLENGE CUP

Direct Effect Indirect Effect Induced Effect Total Effect Multiplier

12.5 1.8 2.1 16.3 1.31 $302,866 $71,332 $79,433 $453,630 1.50 $436,230 $117,386 $142,942 $696,558 1.60 $821,310 $221,251 $250,508 $1,293,069 1.57

Direct Effect Indirect Effect Induced Effect Total Effect Multiplier

15.0 2.2 2.5 19.6 1.31 $363,439 $85,598 $95,319 $544,356 1.50 $523,476 $140,863 $171,531 $835,870 1.60 $985,572 $265,502 $300,610 $1,551,683 1.57

Total output measures the value of industry production. For service sectors, which are the primary industries impacted by the Challenge Cup, total output is equivalent to sales. Finally, value-added measures the contribution made to the Gross Domestic Product (GDP) of the regional economy. It is the difference between an industry’s or establishment’s total output and the cost of its intermediate inputs.

Overall, the 2021 USSSA Challenge Cup produced a significant financial boost to the regional economy. The four-day event generated between $1.293 M and $1.551 M of output/sales within Brevard County. After removing the cost of intermediate inputs, the estimated impact on gross domestic product (value-added) is about $0.697 M to $0.836 M. The sales generated by the Challenge Cup supported about 16.3 to 19.3 jobs in total and boosted labor income by $0.454 M to $0.544 M.

The magnitude of the multiplier ranges from 1.5 to 1.6 for income, value-added, and output. Consequently, every dollar of direct effect generates an additional 50 to 60 cents of secondary impacts. These estimates are in line with past assessments reported in the Space Coast Tourism Journal. Not all the new spending that enters a region is re-spent within the area. The dollars spent outside of the regional economy are considered a “leakage” and reduce the size of the multiplier. In Brevard County, there are sizeable leakages in spending associated with retail purchases and gasoline sales, thereby limiting the event’s overall impact.

Table 4 summarizes the ten industry sectors most affected by the Challenge Cup, based on a population count of 3,260. Consistent with the purchases made by participants/attendees of the event, the two most significant impacts occurred in hotels/ motels and full-service restaurant industries.

Observations and Concluding Comments

The economic impact estimates reported in this study are conservative by design and may underestimate the actual impacts by a margin of 6.5 to 8.0 percent. One explanation is that the number of non-roster visitors who attended the event might be underrepresented. Because of the strict travel restrictions that many states imposed during the Covid-19 pandemic, we added only one to two people for every four players listed on team rosters to the population count, a ratio of 1/4 to 1/2 per player. Under normal circumstances, this ratio is likely one-to-one or more.

TABLE 4: ECONOMIC IMPACTS BY INDUSTRY SECTOR

Sector

Hotels &motels, including casino hotels Full-service restaurants

Employment Labor Income Value Added Output

3.7 $94,681 $211,105 $376,787 5.5 $122,646 $137,554 $271,187

Museums, historical sites, zoos, & parks Other personal services

1.1 $35,748 $39,059 $86,299 1.6 $39,143 $30,998 $53,722 Real estate 0.4 $4,619 $28,986 $53,045 Transit and ground passenger transportation 0.8 $14,317 $19,927 $44,531 Owner-occupied dwellings 0 $0 $26,872 $41,455 Retail - General merchandise stores 0.5 $13,064 $20,814 $32,395 Management of companies and enterprises 0.1 $9,344 $11,779 $21,138 Wholesale trade 0.1 $6,068 $12,558 $19,507

A second explanation is that the analysis does not include purchases made by USSSA to host the Challenge Cup. We can infer a reasonable estimate based on the registration fee to enter the tournament. If each team paid the $395 registration fee, this revenue source would have generated $64,385. Assuming USSSA spent the entire sum to host the Challenge Cup or fund future events, the total impact on output/ sales on the Brevard County economy would be another $101,000.

We also note that the number of teams that traveled to Viera was significantly lower than anticipated because of the Covid-19 pandemic. According to Strojan Kennison, the 2021 Challenge Cup would have drawn over 220 teams, increasing the total number by 35 percent or more. Under this scenario, a 220-team event would create between $1.75 M and $2.09 M in sales.

The USSSA Challenge Cup has rapidly grown over a short three-year period. Planning for the 2022 event is well underway and includes expanding the tournament to 12 days and adding several new divisions. Strojan Kennison is expecting close to 500 teams for next year’s tournament, tripling the size of this year’s event. If successful, an annual event of this magnitude would have a profound impact on the regional economy and could well generate an impact exceeding $5 M per year. n The author would like to thank Strojan Kennison, Director of Conference USSSA, for his insights about the Challenge Cup event, and Paul T. O’Leary, Director of Marketing, USSSA, for his assistance with information about 2021 Challenge Cup team rosters and USSSA Space Coast Complex.