Blog: March 2011

How the Home Team Wins

By Kevin Wittner

What kind of implications does a home football game have for a city? When I conducted an independent study of the University of Arizona football team's impact this past fall, only one element was analyzed: The program's economic impact on the city of Tucson. Here's what I found.

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I am the first to advocate athletics' qualitative impact goes much deeper than dollars and cents. However, the purpose of the study was to find empirical evidence of visitor spending in Tucson that would not have occurred without the existence of a football game. More specifically, Arizona's Sept. 18 contest against the University of Iowa. While not every game is a Top 25 matchup between BCS-automatic qualifying institutions, it can serve as a baseline for how fans spend their money when traveling to games involving a successful team.

Prior to game day, experts from various fields were consulted including research economists at the Eller College of Management's Economic and Business Research Center (EBR), Eller College of Management marketing and statistics professors, officials from the Metro Tucson Convention & Visitors Bureau (MTCVB) as well as senior staff members from UA's athletics department. Full disclosure: As a former employee of UA athletics, it was important for me to have several third parties including the EBR and the MTCVB review my methods and results.

The game came and went--a 34-27 Arizona victory in front of 57,864 fans televised nationally on ESPN. Then the real fun started.

After collecting more than 1,700 surveys--both in person at tailgates and then online via e-mail to ticketholders--the data found out-of-state fans spent $606.45 per person while in-state fans tallied an average of $276.61.

One common misconception is that all fans in attendance or those watching--and consuming--at the local watering hole contributed to the impact. For spending to be considered economic impact, it is generally assumed that only visitor spending should be counted; this has been established as common practice in similar studies. In other words, locals who purchased tickets and racked up a large tab from guzzling lemonade later on were not to be counted because we're assuming their money is spent in Tucson.

Certainly, there are exceptions to this rule, but for our purposes let's ignore them here. In addition, the out-of-towners have to spend their money in Tucson. So while a fan's $400 airfare does not contribute to the local economy, the $50 spent on a rental car does.

Next, by multiplying the out-of-state population of 10,465 and the 6,296 in-state fans with their respective spending averages, the direct spending impact on Tucson was found to be just under $8.2 million (plus/minus nine percent). The only other figure factored in was the amount Iowa's team spent in town.

The EBR generously provided formulas to determine the money multiplier and the effect on jobs. The money multiplier--or value added--considers in what industry did spending occur and how do those dollars become 'recycled' in the economy. When a visitor stays at a hotel, some of that money will go to pay the front desk, bellhop, or concierge. The hotel also might retain a laundry service or need to purchase food for its restaurant. When the front desk associate, concierge, or restaurant then spends their money, the impact gets multiplied.

Ultimately, the $8.2 million spent from the game turned into approximately $13.8 million for the Tucson economy and accounted for 172.5 annualized jobs. Mind you, this does not represent the one-day-a-year game day jobs, but 172.5 full-time, year-round jobs.

Throughout the course of this research, some have stated that the Iowa game was chosen for this study because "Iowa fans travel well." There is no doubt Hawkeye fans--and most in the Big Ten--follow their teams with fervor. While this is undoubtedly true, so is this: Family Weekend (Oct. 9), Homecoming (Oct. 23), and games against USC (Nov. 13) and Arizona State (Dec. 2) have a similar effect. Furthermore, athletics officials report Tucson's warm weather climate, variety of amenities, resorts, and culture make the city a desirable location for alumni and season ticket holder or donor trips for visiting teams, particularly for those in the Northwest.

With this in mind, the entire seven-game home schedule was estimated to have generated $37.5 million in visitor spending which ballooned to $61.6 million for the city of Tucson when factoring in value-added money multipliers. For the people in Tucson, this meant 638.7 full-time, annualized jobs.

In summary, the real impact of an athletics department should not be defined as figures on a spreadsheet but rather in how it influences the lives of students, alumni, and the community. However, for the 172 Tucsonans who have jobs thanks to the Iowa game--or the more than 600 feeding their families because of the season--the word impact may not suffice. Now, it is in the hands of savvy business owners and other beneficiaries to find ways to maintain and increase this revenue generation.

Kevin Wittner is a second year MBA student at the University of Arizona's Eller College of Management. Previously, he has served as the media relations director for UA's national championship softball program and also worked in corporate communications for the Arizona Diamondbacks.