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Businesses see boost when O’s play in October

The Orioles are in the hunt for October again, and city businesses are buzzing, with many expecting increased traffic after last year’s surprise playoff run brought in more customers.

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Rachel Sheubrooks, owner of Sliders Bar & Grill near Camden Yards, holds an Orioles-themed can of National Bohemian beer and a Baltimore Tots appetizer. ‘The better the Orioles do, the busier we are,’ she says.

But, like the O’s playoff chances, financial gains from the playoffs are far from a guarantee.

“People will enjoy the experience … and that’s about it,” Dennis Coates, professor of economics at the University of Maryland, Baltimore County, said. “You have some things go up and some things go down, and on average, there’s no change.”

According to a 2001 report Coates co-wrote, “The Economic Impact of Postseason Play in Professional Sports,” a professional baseball, football or basketball team’s playoff appearance makes no significant difference in a city’s level of personal income, except in the event of a Super Bowl victory — and even then, the increase is only 1 percent.

Coates described the perceived economic growth as a “shell game,” in which “you’re moving the peas from one spot to another, but that doesn’t mean the number of peas is growing.” As an example, he pointed out that while playoffs often lead more people to restaurants, all the restaurant-goers aren’t spending money on groceries, so the city experiences little to no net gain.

But others say the playoffs do bring in additional customers.

“I definitely know there’s an uptick,” said Tom Noonan, president of Visit Baltimore, the city’s tourism agency. He said any playoff appearance results in more fans visiting local restaurants and staying in hotels, in addition to increased civic pride and morale.

He noted that playoff baseball has two unique benefits. Games are played throughout the week, as opposed to playoff football which is limited to Saturday and Sunday. Additionally, the fact that a Major League Baseball playoff series lasts at least three games (and as many as seven after the first round) means there are more opportunities to earn money, as opposed to the one-game, winner-take-all NFL playoff series.

Noonan said this makes up for the fact that football stadiums have significantly more seats than baseball stadiums. Camden Yards seats about 46,000 people; M&T Bank Stadium can host about 71,000.

“You can’t beat the number of games,” said Jeff Lang, manager of Frank and Nic’s West End Grille¸ who described the difference between playoff games and regular season games as “the difference between a good night and an amazing night.”

But Coates believes baseball’s longer playoffs actually result in reduced profitability. His report described the Super Bowl as a “national, even global stage in [a] do-or-die situation” in which victory can increase consumer confidence, which may explain the increased productivity that victorious cities experienced after a win.

From 1969-1997, according to the report, the World Series champions’ host cities did not experience such a boost.

“It’s also silly to think that everyone is in those bars and restaurants … would not have bought food and drink had there been no playoff game,” said Coates, who attributed the perception that playoff games benefit the whole city to public relations work.

Coates is not alone in his opinion. Neal Finnegan, professor of economics at Northeastern University in Boston, said in an interview for the university’s website that some gains teams describe as public are limited to the team itself.

“Cities benefit from their sports teams only in terms of people who are drawn to the city or who make expenditures they otherwise would not have,” Finnegan said. “Lots of economists have looked at these ‘public’ benefits and nearly unanimously concluded that they fall short of what proponents claim.”

Still, Noonan said even a chance of a playoff run can increase business in the area. He said as long as a team continues to win, local interest (and thus sales) avoid growing stagnant.

Thomas Rhoads, professor of economics at Towson University, said while Baltimore businesses could benefit (particularly those close to the stadium), not everyone would see gains.

“There’ll be some kind of impact; the question is, ‘How much?’” he said. “People get more excited about the city, and that typically translates to more dollars spent everywhere.”

However, Rhoads said, hotels would likely see no change in business.

“Orioles fans are going to come in, watch the game and go home,” he said.

The Orioles’ rough history (last year notwithstanding) led to a surge of consumer activity before and during October, according to Rachel Sheubrooks, owner of Sliders Bar & Grille. While the Ravens have made the playoffs six of the past seven years, before 2011, the Orioles hadn’t made the postseason (or even won more than half their games) since 1997.

“Nobody was expecting [last year],” she said. “The better they do, the busier we are.”