Do they make a difference? Professional team sports clubs’ effects on migration and local growth: Evidence from Denmark

Highlights

•	Can professional team sports in Denmark have effects on local growth and migration?
•	Danish handball clubs have marginal effects on average income.
•	Ice hockey’s effect is negative and football remains insignificant.
•	Concerning migration, no effects are found in relation to any of the three sports studied.
•	On these grounds, using public money on professional team sports cannot be justified.

Abstract

It is a common argument in Denmark that municipal involvement in professional team sports can be justified on the grounds of local impact. The use of public funds to directly or indirectly subsidise local professional team sports clubs (PTSCs) is often seen as warranted due to the PTSCs’ positive effects on local economic growth or (inbound) municipal migration. However, can PTSCs be associated with tangible effects at all? This question has never been answered properly in a European context. Based on data covering the 2008–2013 period, and using spatial panel regression models, this article examines this issue in relation to three dominant professional sports in Denmark: football (soccer), handball and ice hockey. The study finds effects for only one of the sports examined, with Danish handball clubs exercising a marginal effect on average income. Ice hockey’s effect is negative and football remains insignificant in all models deployed. Concerning migration, negative effects are found in relation to female handball clubs. These findings are consistent with previous research and have implications for local sport policies and managers. Municipal politicians, public authorities or sport managers should no longer rationalise the use of public funds for local PTSCs on the assumption of (tangible) economic effects or population growth, as it appears to be an inefficient use of public money. If policy makers want to increase municipal income or inbound migration, they should engage themselves in developing more appropriate strategies.

Keywords:

• Professional team sports
• Economic growth
• Migration
• Denmark

Acknowledgements

The authors wants to thank two anonymous reviewers and the associate editor, Pamela Wicker, for valuable comments on earlier drafts of this article.

Notes

1 For a comprehensive discussion of methodical issues around measuring the economic impact of sporting events, please refer to Storm (2012), on which parts of this section of the article are based.

2 In order to converge the models, we did not include a lagged dependent in model 3 (as there is very little yearly variation in population). We did include it in our sensitivity models, and this did not alter the substantive results.

3 Given a municipal tax level at 24.7% and 76,948 inhabitants (2014 numbers).

4 With regard to competition law in the European Union, which applies to Denmark, direct or indirect public subsidies affecting cross-border competition among firms are also illegal.