Failed concert promoter Harold MacKay told the Chronicle-Herald that the economic impact for last year’s Black Eyed Peas and Country Rocks shows was worth the loss to the taxpayer:
The two shows that we did not make money on, and we lost money on, generated $13 million in economic spinoff,” he said in an interview.
“Yes, it cost $360,000 to do that because we didn’t sell enough tickets, but damn it, at the end of the day, is that not a good business transaction? I mean, God almighty.”
Problem is, MacKay appears to be pulling those numbers right out of his ass.
“We did not prepare or supply any additional economic impact or expenditure data related to the other outdoor concerts hosted by Power Promotional Events Inc.,” says Suzanne Fougere, spokesperson for Trade Centre Limited.
Fougere says so far as anyone at TCL knows, no provincial department has conduct any economic analyses of the shows. City officials say that they, too, have no such information.
There was what’s called a “direct spending profile” completed for 2009’s Paul McCartney show. Note that this is not an economic impact report—a spending profile just says how much people spent to go to the show, and doesn’t attempt to measure lost or displaced business because of the show. That would take an additional level of analysis that wasn’t conducted.
Still, that report shows 26,504 people plus all the promoter’s expenses totalled $8.2 million in money spent for the event.
A total of 18,371 people bought tickets for the Black Eyed Peas and Country Rocks show. MacKay would have us believe that even though about 5,000 fewer people attended those shows than attended the McCartney show, they spent almost $5 million more than the McCartney attendees.
The reality is even worse that that. About half of the attendees to the McCartney show came from outside HRM, so at least that half of the audience spent money that wouldn’t have been circulating in Halifax anyway.
No study has been conducted, but it’s unlikely very many people travelled to Halifax to see the Black Eyed Peas; the money locals spent going to the show was simply money that would’ve been spent elsewhere locally, meaning it’s not really new economic impact.
More, if we’re going to get into real economic impact, we’ll have to start discussing the hundreds of thousands of dollars owed to local businesses by Power Promotions—that is, the money never paid for services rendered to The Coast, The Chronicle-Herald, Scanway Catering, TourTech, and Royal Flush. And then there’s the $359,550 in city revenue that won’t be spent on more productive pursuits like street infrastructure and the like.
For The Coast’s complete coverage of the Common concert financing scandal, click here.
This article appears in Mar 24-30, 2011.
People like that dude are excellent at pulling numbers out of their ass. Isn’t it lovely? As my grade 6 math teacher would drill into our heads “show your work, show your work, or it isn’t a complete answer and you only get half points!”.
Mackay just needs to stop talking. The only “economic spinoff” that occurred was the multiple small businesses left with their pockets empty after Mackay didn’t fit the bill.
The only money spent at the Pea’s concert was likely on booze, because you had to be drunk to make it through their show.
As for downtown small-business spending, if anything, it hinders it, as people who are usually out on the weekend, shopping, eating, etc. Have either left the city entirely to escape the concert crowds all together, or stay at home to avoid the expected crowds.
These concerts were a massive waste of time and money, and this is coming from someone who supports the ideas of a concert on the commons, skating on the commons etc.
I’m sure a cursory look at the Revenue Canada HST numbers would bear out the case that these concerts helped Halifax well beyond the “forgiveable grant” change cost us. In fact I bet most of was recouped in income tax.
I’m sorry, that comment doesn’t make any sense. “Recouped in income tax” – who’s income tax? And even assuming that somehow money was earned in income tax, how exactly are municipal funds replaced by federal and provincial taxes?
Sounds to me like you got your numbers out of the same place MacKay got his.
Mr. Wesson, you’re making things up. What in the world does “income tax” have to do with revenues for the city and local businesses? Are you talking about sales tax? And some places claim they had really crappy sales that weekend – like Spring Garden Rd had one of its worst weekend ever. How can you deny that it was a failure?
Lest we forget the loss of income businesses suffer when the non-concert going folks decide to avoid the city during events. IE: I go out to dinner a lot but on weekends I know there are traffic or parking issues I avoid halifax. I also avoid Halifax anytime the Mooseheads play for the same reason. I hate traffic and parking challenges
I have a lot of problems with the increased HST revenue arguement. It assumes if the concerts had not taken place those monies would not have been spent on other taxable goods and services. I think for the most part people spend all of the money they allocate to entertainment and personal spending. No concerts? The money would have been spent on dining, clothing and household personal items generating the same amount of HST for governments.
73.2% of statistics are made up on the spot. Then again, 4 out of 3 people can’t do fractions…
What is the correct Economic Impact Assessment?
Here’s a discussion paper as a place to start…
https://docs.google.com/viewer?a=v&pid=exp…
Economic Impact? Negative $3.5 Million
And here’s an Ontario Government Course on how these things are properly calculated and expressed.
http://www.reddi.gov.on.ca/guide_ecimpacta…
It’s just not that hard to figure out. You need a calculator and a free 45 minutes.
Here’s a good read on Harold, scroll to page 60 (or 15 in adobe):
http://highered.mcgraw-hill.com/sites/dl/f…
“Both Mr. Annand and Mr. MacKay have learned that being “painfully naïve” in making financial predictions can result in surprisingly low revenue.” – lmfao
I notice that the Direct Spending Profile attached to the article and the cost figures recently released gives us enough information to do an Economic Impact Assessment of the Paul McCartney Concert.
https://docs.google.com/viewer?a=v&pid=exp…
Bottom Line: $3 million negative economic impact including spin-offs and multiplier.
Calculated using methodology per:
http://www.reddi.gov.on.ca/guide_ecimpacta…
There are a lot of negative impacts, and many of the “positive” aspects are only replacing economic activity that would have happened anyway. Some businesses (Janes on the Common for one) shut down as the concerts reduce perceived security of person in the area close to the show and their customers stay away anyway. There is no compensation offered, yet they would normally be full. Hotels are booked by concertgoers, I am sure, but they only displace the normal tourism attendees that time of year, driving their spending elsewhere. Emergency routes to the hospitals are at the very least compromised. Shift workers’ routines are shot to hell by the noise. The Common is lost to public use for 6 weeks (the poor doggies, holding it that long!!). Transit is all off schedule… oh, wait, no change there.
I live close by. We decide to stay home to protect our property in the event Halifax’s finest cannot. So we lose a summer weekend – have you thought of that? When we only have about three nice ones all summer? I am happy when it rains on the show, except that means the Common will be a mud pit for weeks. They still have not been able to fix the damage done at the northwest corner setting up for McCartney, it’s still a bog.
The Common is not supposed to be used for these types of events. It is supposed to be “common”, not fenced off. And on top of it, these damage our economy and our city’s reputation. Yet staff, all awash in their hero-worship glow from the proximity of ageing drug addicts, continue to subvert the democratic process and push for these huge fiascos. Just who are they working for?
As more and more information is uncovered it is clear that there was no economic impact intended. This was purely intended to garner Mr Kelly political gain at any price. We need to continue to dig into this scandal.
We also should investigate the Harbour Solutions Project and the mayor’s office.
What is the status of the plants now? are any of the plants currently meeting their compliance requirements?
The whole city is being run as one big photo-op for Mr Kelly. We must rid ourselves of this man!!