The circular tourism economy

Rest assured, unlicensed vendors, no wrestlemans are coming to overturn your carts of not-official WWE merchandise.

A federal judge in New Orleans this week delivered a smackdown to World Wrestling Entertainment, rejecting the company’s request to allow its personnel to confiscate alleged bootleg goods sold at events surrounding this weekend’s WrestleMania XXX without having to identify ahead of time who exactly is selling the fraudulent items.

You may think to yourself, "Well of course. There is no conceivable justification for handing the World Wrestling Entertainment company special law enforcement powers in your city simply because they are visiting there."  You would then be surprised to learn that this sort of thing does in fact happen. 

In the past, federal judges across the country have been receptive to WWE’s requests to allow it to directly seize counterfeit goods. Ahead of WrestleMania XXVII in Atlanta in 2011, a judge gave this permission and the company seized 3,000 T-shirts that were being sold for $10 apiece, WWE said.

By now we're used to reading boilerplate uncritical  headlines about the economic "boon" to the city each of these events is supposed to carry with it.  But one has to wonder if the extraordinary measures taken to control the flow of the supposed "economic impact" limits its distribution among the host city's population. 

Similar issues arose just after last year's SuperBowl.

The Super Bowl Host Committee has said it expects the game will have a $434 million impact on the city. That figure, though, isn’t the net revenue that local and state governments will deposit into their treasuries, experts argue, and many local businesses said they had disappointing or slower business than expected.

Pam Doerr runs a small shop on St. Louis Street in the French Quarter that sells small jewelry items and art. She said she made two sales between Thursday and Saturday. Both of those customers were locals, she said.

“The people were nice, the crowds were here, but they just didn’t spend,” she said. “I was very disappointed.”

There is no question the crowds were here. The Quarter looked like the city was celebrating Mardi Gras Day all weekend. And tourism officials said there were no hotel rooms available in the city.

“We are pulling final numbers today, but it’s safe to say hotels were at 100 percent (occupancy) for the Super Bowl weekend,” Kelly Schulz, spokeswoman for the New Orleans Convention and Visitors Bureau, said in an email.

This report jibes with other anecdotal evidence I heard during Superbowl week. Independent shopkeepers and vendors did poorly.  This is probably in part because most visiting fans planned to spend their money on "Officially licensed NFL merchandise" which could be had from various temporary stores set up in rented spaces around the quarter like this.









Bartenders and waiters just did okay.   Some did very well, of course, but mostly the crowd was comparable to any event weekend with transient visitors checking into the typical tourist-ridden haunts.  The NFL high rollers, though, appear to have kept their money with in a tight circle of private parties and closed events. For all the attention paid to the tounge-in-cheek "Do Not Serve" Goodell stuff, it was never likely that Roger or anyone throwing around Roger type money would have come in contact with our local service staff anyway.

Michael Regua, executive chef of Antoine’s for 36 years, said that previous Super Bowls have seen a surge of business at the restaurant during the week leading up to the game. This year things were slow until Friday, he said.

“A lot of people had parties and other functions to go to” before the weekend, said Wendy Chatelain, Antoine’s director of sales and marketing.

“I’m not going to say it was disappointing. But we geared up to do more, and it seems everyone got to the city on Friday,” Regua said. “We hoped to have the whole week.”

Michael Pearson, a sports marketing professor at Loyola University’s Joseph A. Butt College of Business, said he’s always skeptical about the expected economic impact that host cities say they will receive from large sporting events.

Much of the money that flows into the game, some economists argue, flows out of the host city and back to the headquarters of those companies hired to help put on what has become a days-long production.

One such private event took place at Armstrong Park.  

The NFL Honors ceremony, a two-hour prime time awards special event, will be held at the Mahalia Jackson Theatre on the evening prior to Super Bowl XLVII (Saturday, 2/2/13). And although the city’s official press release indicated that Armstrong Park would not be closed to the public in preparation for this event until Wednesday, 1/30/13, the park has, in fact, been locked up tight since Monday, 1/28/13.

Was the city even compensated for the use of this facility? (The max event fee is $1,500)

The hotels, though, were packed. For all practical purposes, hotel occupancy has become equated with whether or not we judge an event successful. But it's deceptive to assert that occupied rooms translate into direct benefit to anyone other than the hoteliers themselves.  Keep in mind, the great majority of revenue generated by the hotel/motel occupancy tax goes to right back into supporting tourism related entities.

Three state entities — the Louisiana Superdome Commission, the Ernest N. Morial Convention Center and the state general fund — get 9 of those 13 cents per hotel dollar. The Superdome Commission — responsible for the Superdome and the New Orleans Arena — gets the biggest cut: 4 cents per dollar, or about $34 million in 2013, based on city revenue estimates. The next largest beneficiary is the New Orleans Exhibition Hall Authority — which governs the Ernest N. Morial Convention Center — with 3 cents, or about $26 million in 2013.

Two cents go directly to the state general fund. Of that, about $7.3 million is allocated this year to the New Orleans Metropolitan Convention and Visitors Bureau and $2 million to the Morial Convention Center for debt services on outstanding construction bonds.

Of the four cents not going to the state, two-and-a-half cents are divided between the New Orleans Regional Transit Authority and the Orleans Parish School Board.

The remaining penny-and-a-half goes to City Hall — meaning only 11.5 percent of the city's hotel/motel tax take goes to city government. At the Nov. 9 budget hearings, council vice-president Jackie Clarkson gasped when she misheard RTA president Justin Augustine announce the agency's share of hotel/motel revenues of "one and a half." "We only get one and a half," she said.

Add to that, the various mechanisms by which large event organizers like the NFL control how and where their visitors spend money on dining and shopping and a picture arises of a much more self-contained "economic impact" to the city at large than tourism leaders tend to describe in the press.

Of course WWE doesn't do this on the scale the NFL does. (Few do.) But clearly there's a model there which others are trying to emulate.  If Judge Berrigan had granted WWE permission to send its employees around town as quasi-law enforcement officers harassing local merchants at will, it isn't hard to imagine such a practice becoming a standard accompaniment to any major event.

Ashlye Keaton, an adjunct lecturer in the Tulane University Law School who specializes in entertainment and intellectual property law, said granting the motion could have created a ripple effect.

“There are all kinds of conventions that come into town. We are a tourism-breeding ground, and you know, if they were successful in that motion, just imagine the size of the can of worms that would open for anyone else coming down here,” Keaton said. “Everybody would be filing their motions in advance.”

For this weekend, though, the most WWE's agents can do to suspected bootleggers is call the NOPD.  And while that's theoretically more constitutionally valid than, say, sicking some pro wrestlers on them, we all know that in practice, it may actually be worse.