A Study of the Economic Impact of Ohio Athletics on Athens County, OH

Transcription

1 A Study of the Economic Impact of Ohio Athletics on Athens County, OH Prepared For: Dan Hauser Associate Athletic Director Ohio Athletics Convocation Center S211 Athens, OH Prepared By: Joel Campbell Chris Kosmala Andres Lares Rashawn Nelson Ohio University Center for Sports Administration May 5, 2009

2 Table of contents EXECUTIVE SUMMARY...2 PURPOSE...3 METHODOLOGY...3 STUDY FINDINGS...4 DEPARTMENTAL SPENDING & REVENUE...5 ECONOMIC IMPACT OF FOOTBALL...5 ECONOMIC IMPACT OF MEN S BASKETBALL...5 ECONOMIC IMPACT OF BASEBALL...6 ECONOMIC IMPACT OF VOLLEYBALL...6 ECONOMIC IMPACT OF WOMEN S BASKETBALL...6 ECONOMIC IMPACT OF SOFTBALL...6 ECONOMIC IMPACT OF NON-TICKETED EVENTS...6 FURTHER RESEARCH...6 CONCLUSION...7 WORKS CITED...8 APPENDIX A: LIST OF SURVEY QUESTIONS TO SPECTATORS...9 1

3 EXECUTIVE SUMMARY The Ohio University Athletic Department has become a staple in Athens County, which ranks low among household income among Ohio counties. The Department stimulates the community with jobs, provides multiple forms of entertainment, and provides substantial economic impact through the millions generated yearly. According to researchers in the Ohio University Center for Sports Administration and School of Recreation and Sports Sciences, the total direct economic impact of the Athletics Department is $8,191,312. This impact was calculated using revenues from three sources: visiting team spending, fan spending during home events, and revenues tied to outside agencies/organizations. Specifically, Ohio University football made the biggest economic impact on Athens County during the academic year with a direct impact of $2,129,490. Men s basketball contributed $1,532,210 while baseball was responsible for an impact of $605,991. Volleyball chipped in $411,086 while women s basketball and softball garnered $131,078 and $91,777, respectively. Non-ticketed events contributed $174,657 to the Athens County economy. According to Dr. Ming Li, the Director of the School of Recreation and Sport Sciences at Ohio University, the total economic significance of the athletic department, as a unit of Ohio University, was $11,920,514. This figure is based on the total expenditures of the entire department and was taken from budgets provided by Ohio University. This study, conducted by graduate students of the Center for Sports Administration at Ohio University, only estimated the direct economic impact of the Ohio University Athletic Department in order to produce conservative figures. Future studies could calculate the indirect impact by including other sources of revenues and implementing an economic multiplier. However, this study was limited to the direct impact, leaving open the possibility for future research to find secondary impacts of the department. 2

4 PURPOSE Athens County, located in the South East section of Ohio is home to Ohio University. The mostly rural county s 2007 population was approximately 65,200 and student enrollment of over 16,000 undergraduates and over 4,000 graduate students. The Ohio University athletics department is host to 16 varsity sports. Ohio athletic teams compete at the NCAA Division I level and like many colleges and college communities, Ohio University and Athens enjoys the substantial economic impact of its athletic teams. The increased exposure that a major college sport brings to each area, especially a town the size of Athens, adds to the overall entertainment and quality of life for the county. Athletic teams participate in televised and radio broadcast events that serve as a two to three hour long commercials for the University. This study will also serve the Athens County community. This has long been an area cited by many experts as under-developed socio-economically and Ohio University is often seen as among the main economic drivers of the region. The athletics department, while also serving as a marketing and publicity arm of the university, also hopes to help drive the Athens County economy through hosting events and increased tourism to the area. According to the U.S. Census Bureau s most recently available data, Athens County has a median household income of $25,889, significantly trailing the Ohio median of $47,750 which represents the three-year average median (ending 2007) for the state. According to this data, Ohio was tied for 28 th, along with Arizona, in three-year average median household income in the United States. Therefore, Athens County significantly trails the average American household income. Athletics can be used as another vehicle to help build the Athens economy. To asses the impact of its athletics programs of the surrounding community the athletics department has reached out to the Center of Sports Administration. Four graduate students in the Sports Administration program at Ohio University set out to gather, analyze, and report the findings from the year long study. The study received extensive support and assistance from the department s Associate Athletic Director of External Operations, Dan Hauser and the Director of the School of Recreation and Sport Sciences, Dr. Ming Li. METHODOLOGY Direct economic impact was calculated in several ways for the purpose of this study. First, the funds from economic impact were divided into six commonly-used categories associated with tourism and special events: Accommodations Food & beverage Transportation (including fuel) Entertainment Retail expenses Other spending 3

5 Data were collected from three main sources. First, an online survey was developed and invitations sent to the 44 institutions which had teams travel to Athens County for varsity-level competition. Letters from Ohio University Director of Athletics Jim Schaus were sent to the athletic directors at these departments with carbon copies sent to athletic business managers. Of the 44 invitations sent, 25 participated for a 56.8% response rate. Those who responded gave the amounts of all monies spent in Athens County during each trip. Second, spectators who attended games were surveyed on site. Upon being approached by a researcher, participants were told about the purpose of the study and asked if each resides in Athens County. Those who did not reside in the county were asked if the sporting event was a main reason for the visit to Athens County. Participants were asked to list their expenses that were already incurred and those they might make after the event. For a complete list of questions please see Appendix A. It should be noted that for the purposes of this study, Ohio University students were considered residents of Athens County and therefore, their expenditures in Athens County are not factored into the direct economic impact. Third, all fundraising revenues received by the department from donors outside of Athens County were added up. This was done through information provided by the Director of Athletic Development and the Ohio Athletics Ticket Office. Moreover, department revenues from external sources such as game guarantees, royalties, MAC Championships and NCAA Championships, and sponsorship were summed. All of these sources along with the first two research initiatives were added together to determine the total direct economic impact of Ohio Athletics on Athens County. To calculate the direct economic impact, no multipliers were used to calculate secondary impacts. For more information, please see the further research section below. Moreover, the research team decided it would be beneficial to calculate the economic significance of Ohio University Athletics on Athens County. This figure includes departmental spending in the form of departmental salaries and scholarship payments to Ohio University plus payments to local businesses for books, supplies, and housing. Additional spending in Athens County for supplies and operational expenses was also included in the economic significance figure. This information was obtained from the budget of the department through the business office. STUDY FINDINGS Through the research conducted by the students in conjunction with records from the athletics department, it has been determined that the total economic significance of Ohio Athletics, as a unit of Ohio University, on Athens County for the academic year is $11,920,514. The direct economic impact of Ohio University Athletics on Athens County is $8,191,312. It should be noted that this figure only represents the direct economic impact and does not include any secondary effects which are common when presenting economic impact studies. For more information, please see the further research section below. The following is a breakdown of this figure by area including departmental operating significance, the economic impact of each ticketed sport sponsored by Ohio University, and the 4

6 economic impact of sports sponsored by Ohio University which do not require a ticket for spectator admission. Departmental Spending & Revenue Through the course of normal operations of the department, there are various expenses and payments that produce an economic impact on Athens County. For the purposes of this study, the research team chose to focus on several sources of direct economic impact: revenues from outside donations, revenues from game guarantees, revenue from royalties, revenue from championships, and revenues from sponsorships. Monetary donations received by the athletics department from outside donors contribute to the direct economic impact of the department on Athens County. This new money outside sources totaled $747,022 in the fundraising year ending March 30. This was verified by donor information provided by the department. Revenues from guarantees, royalties, championships, and sponsorships from outside sources amounted to $2,368,000. These numbers have been verified by budget reports provided by Ohio University. All of these contributed to the total direct economic impact of $8,191,312. The athletics department, as a unit of Ohio University based on total expenditures, has an economic significance of $11,920,514 for the school year. This is the result of expenses by the department in Athens County for the purposes of continuing operations and also includes salaries and scholarship payments, which include stipends for rent and school supplies for student-athletes. Economic Impact of Football In the fall of 2008, five football games were played at Peden Stadium. While this has been the normal number of homes games for the program in previous years, the football team plans to play a sixth home game in future years, thus creating a bigger impact on Athens County each year. Fans were surveyed at three of the five games creating a sample size of 1,058 out of a possible 76,380 of football attendees. The direct economic impact of Ohio University football on Athens County was $2,129,490. This figure is comprised of two sources: $2,045,100 of funds spent by spectators who attended the game from outside of Athens County and $84,390 worth of funds spent by visiting teams on accommodations, food & beverage, and travel in Athens County. Again, it should be noted that with the addition of a sixth game to the home schedule, the direct impact of Ohio University football is expected to increase in future years. Economic Impact of Men s Basketball In the season, Ohio University hosted 15 men s basketball games. In most years, the department will host games indicating that the results of direct impact on Athens County will be similar to future years. The research group surveyed 163 attendees from the season. The direct spending of spectators summed to $1,473,077 while visiting teams spent a total of $59,133. The total direct economic impact on Athens County for men s basketball is $1,532,210. 5

7 Economic Impact of Baseball Through the hosting of 28 games during the 2009 season, Ohio University Baseball generated a direct economic impact of $605,991. This includes $501,573 spent by spectators from outside Athens County and $104,418 spent by visiting teams traveling to Athens County for competition. This figure may fluctuate somewhat in future years as the team hosted 26 games and 31 games during the 2008 and 2007 seasons, respectively. However, the high number of games played should keep it as an important economic driver of Athens County. Economic Impact of Volleyball Volleyball has become an increasingly important part of the department s sport offerings in recent years as the team has won national accolades. Accordingly, attendance and the direct economic impact of the sport have risen in recent seasons. In the 2008 season, Ohio Volleyball had a direct economic impact of $411,086, including $395,726 from monies spent by fans and $15,360 of direct impact by visiting teams. The program hosted 11 games in 2008 and will host a twelfth contest in Economic Impact of Women s Basketball The Women s Basketball program contributed a direct impact on Athens County of $131,078. Expenses of $79,500 by out-of-town spectators and $51,578 by visiting teams compose this figure. This direct impact was the result of 13 home games which is approximately the same number anticipated in future years. Economic Impact of Softball Ohio University Softball garnered a $91,777 direct impact on Athens County through participating in 12 home contests in the spring of $76,212 of this impact is attributed to spending by visiting fans with an additional $15,565 worth of expenses by teams from outside of Athens County. This figure may be a bit lower than other years as the team has hosted 18 games in each of the two seasons prior to Economic Impact of Non-ticketed Events Finally, there are seven additional sports sponsored by the athletics department which hosted contests at Ohio University in the academic year: women s soccer, women s field hockey, men s cross country, women s cross country, women s track & field, women s swimming & diving, and men s wrestling. These events are grouped together due to the fact that these events are hosted free of charge and do not require a ticket for spectator admission. Combined, these programs held 32 home events during the year and produced a direct economic impact of 174,657. This impact includes $138,028 of out-of-county traveler spending and $36,629 from expenditures by teams from outside of Athens County. As with other sport programs, this impact will fluctuate based on the total number of events hosted by these teams. FURTHER RESEARCH This report has presented the total direct economic impact of Ohio University Athletics on Athens County, along with some of the economic significance of the athletics department. However, the researchers chose not to calculate the secondary effects of Ohio University Athletics due to the absence of an appropriate economic multiplier. Without this, it would have been difficult to calculate the tax revenue received by Athens County and the State of Ohio and 6

8 the number of jobs supported by the athletics department. Future research can calculate an appropriate multiplier to make conclusions about the tax impact, income impact, and employment impact of Ohio University Athletics on Athens County. CONCLUSION The Ohio University Athletic Department continues to host numerous events and thousands of fans each year. This past season the football team enjoyed season total of well over 78,000 fans at Peden Stadium. The Ohio athletic department supports the Athens community with departmental jobs, exposure through nationally broadcasted events and other media coverage, and the total direct economic impact of fan spending within the county. Although there were hundreds surveyed, Ohio athletic events give a tremendous boost to local businesses as fans pour in to enjoy the games. In addition to the impacts on Athens County, the department benefits the University as a whole. When Ohio athletic teams travel around the country to perform, they are the symbols of the institution teams serve as national representatives for the University. As teams are covered by various media outlets, Ohio University s brand is exposed in those areas. Team travel, coaches recruiting, and televised appearances are all illustrations to the world of what greatness lies within Ohio University. Ohio athletics serves Athens County well. This study shows the significance and importance of Ohio athletics in the community. Aside from the University itself, no other single entity within the County generates any resemblance of an impact than does the Ohio University Athletic Department. 7

9 WORKS CITED Ohio University. (2008). Ohio University Annual Budget U.S. Census Bureau (2008, August 26). U.S. Census Bureau: Income. Retrieved April 25, 2009, from Three-year-average median household Income by state: Web site: 8

10 APPENDIX A: LIST OF SURVEY QUESTIONS TO SPECTATORS Presented below is the list of questions researchers posed to attendees of Ohio University Athletics events for the purposes of this study: Q1: Do you currently reside in Athens County? Q2: How many people are in your group, including yourself? *Note: Those respondents who currently reside in Athens County were thanked for their participation and their survey ended here. For those residing outside of Athens County, the survey continued with the following questions. Q3: In what zip code do you currently reside? Q4: Is this game a main event in your visit? Q5: Will you be staying at any paid accommodations during your trip? Q5a: (If yes) How many night will you be staying at these accommodations? Q6: How much has your group spent, or planned to spend, in Athens during your entire trip? Q7: Of the amount spent, how much has been spent in the following areas? Food/Beverage Accommodations Transportation Retail Entertainment 9