Down, Set, Hike:
The Economic Impact of College Football
Lawrence C Fagin
This paper provides a practical examination of the economic impact of spectator sports on local economies. Confirming the results of other ex post analyses of sports in general, this paper finds statistically significant evidence that college football games in particular contribute positively to a hostâ€™s economy. The analysis of 3 metropolitan areas that play host to big-time college football programs finds that the number of home games played, the winning percentage of the local team, and winning a national championship has a large impact on ...view middle of the document...
Outside of auto racing and a small handful of golfing events, individual college football games at places like the University of Michigan and the Ohio State University have the largest live paid attendance of any sporting events in the country. (International Journal,2009) Television ratings are equally impressive. The Bowl Championship Series (BCS) championship game is the second-most watched sporting event in the country every year (behind the NFLâ€™s Super Bowl) and typically draws a television audience nearly double the size of games during the National Basketball Association finals or baseballâ€™s World Series. (Baade,Baumann 2008)
The popularity of the sport has led colleges, universities, and occasionally local communities to invest generously in infrastructure for their teams. In 2009, for example, the University of Minnesota will open a new US$288 million stadium, 55% of which was paid for with state funds (although the precise line between what constitutes state and university funds is admittedly unclear for a public university). (Baade,Baumann 2008)
In similar fashion to the major professional sports leagues in the Unites States, many colleges and universities have also upgraded their playing facilities over the past 15 years adding to both the number and quality of seats. It is not unusual for top programs to have a significant number of high-priced luxury boxes, a far cry from the simple bleachers of yesteryear. As a case in point, the University of Michiganâ€™s recent US$226 million stadium renovation plan includes replacing some existing stadium bleachers with 83 suites and 3,200 club seats. (UM,2009)
In towns that surround most college or university are small and usually have low median income. Cases in point for the following three universities, The University of Michigan, The University of Georgia, and The University of Tennessee, each of these Universities are located in rural America with low population and low average median income. The University of Michigan which is located in Ann Harbor, MI population 114,024, of which 36,892 (32%) are university students. The average median income for Ann Harbor is $46,299 per household. The University of Georgia located in Athens, GA population of 114,983, of which 34,885 (30%) are university students. The average median income for Athens is $28,118 per household. The University of Tennessee located in Knoxville, TN, population 173,890 of which 21,132(12.5%) are university students. The average median income for Knoxville is $27,492 per household. (CNN, 2008)
At each of these university, the universities itself are a major source of income and income generator of income by hosting college football games. At the University of Michigan they employ about 30,000 workers, including about 12,000 in the medical center. Other industries are drawn to the area by the university's research and development money, and by its graduates. High tech, health services and biotechnology are other...