Toni Cruanyes: "The Copa America generated around 1,000 million euros in profit"
Jordi Valls: "For every euro invested by the public sector, 17 euros have been invoiced. In economic terms, I believe that it has had a positive result."
TV3. 'TN afternoon', 5-3-2025
When the decision was being made as to where the last edition of the America's Cup would take place, I was a councillor at Barcelona City Hall and played a certain role in persuading the mayor to go for it. I do not regret it, because at the time it seemed to me that the city needed an injection of optimism. I will begin by stating this fact so that the rest of this article is not misinterpreted.
I have had the patience to read the report that has just been presented by the public entity Barcelona Capital Náutica and that has been prepared by an institution of mine. alma mater, the University of Barcelona. It aims to measure the economic impact that this celebration has had on Catalonia and the city. It is very similar to many others that I have had the opportunity to study in recent years and, like all of them, it is very easy to understand.
All of these studies are intended to prove a counterintuitive idea: that spending creates wealth. In this case, that it is good business to throw a party.
The idea is as follows. A public administration pays for an event that attracts an audience. This audience spends money in the form of travel, catering, hospitality, impulse purchases, etc. This expenditure, in turn, requires purchases of products by the supplying companies, creates jobs and generates wages and profits. The beneficiaries of this income, in turn, spend this money on other purchases, which, in turn, generate more turnover, more jobs, more wages and more profits, and so on in a mechanism that economists call a "multiplier" because the final result is much higher than the initial impact. It is much higher in every sense, and specifically in the form of jobs created and in the form of tax revenue generated in the form of VAT and social security contributions. That is why it is often concluded that public administrations end up taking in more money than they had initially put in. In the study we are now considering, the authors estimate that for every euro that the public administrations as a whole invested in the Copa America, they ended up collecting 3.3 euros: a great deal!
These studies belong to the same set of academic products as the Laffer curve, popularized by Reagan in the early 1980s, according to which a tax cut can trigger an economic recovery so vigorous that the treasury ends up collecting more money. Its scientific basis is the same as that supporting the curative capacity of sodium hypochlorite against cancer or against covid: none.
How is it possible that universities continue to produce studies like the one in question? For two reasons: because there are institutions willing to pay for someone to defend the indefensible and because it is possible to imagine very specific circumstances in which this type of surprising effect could occur.
These very specific circumstances result in an acute economic paralysis with high unemployment. Only in this exceptional case could public spending or tax cuts end up generating higher tax revenues. The father of this concept – JM Keynes – who wrote in the midst of one of the most acute economic crises that capitalism has ever experienced, argued that the point was for the state to start public works, even if they consisted of opening and filling holes in the ground, because only in this way could a paralyzed economy be unblocked.
What is the connection between this exceptional and critical situation and Catalonia, which hosted the America's Cup? None. It is true that many people watched the boats, and it is true that these people spent money in the city. However, it cannot be deduced from this that without the regattas the number of visitors would have been lower, that there would have been fewer jobs or that the GDP would have been lower than observed. Tourists, businessmen and workers would simply have done something else.
In fact, I have been studying the figures for overnight stays in Barcelona hotels and it is not possible to see in any way that there were more overnight stays in the months of September and October of last year than there would have been without the Copa America.
One thing should be clear: if organising the Olympic Games were a business, Switzerland would undoubtedly have organised an edition of them by now.
