Going Downtown

How much money does your athletic program add to the local economy?

By Dr. Michael Vienna

Michael Vienna, PhD, is the Director of Athletics at Salisbury University and a member of the Athletic Management editorial board.

Athletic Management, 15.6, October/November 2003, http://www.momentummedia.com/articles/am/am1506/downtown.htm

What is the value of your intercollegiate athletics program? This question can be answered in a myriad of ways. Most of us spend a lot of time examining our programs’ educational value, student-athlete developmental value, and entertainment value. But have you ever analyzed its economic impact on the local community?

Most athletic administrators correctly assume that their intercollegiate athletics program has a positive impact upon their community’s economy. However, not many administrators can cite a realistic dollar amount.

Here at Salisbury University, we have spent considerable time examining our athletics program’s value within higher education, but we also wanted to examine how our 21 NCAA Division III teams affect the local economy. We felt this information could be a powerful tool in working with upper-level administrators, local business leaders, and potential donors. Once these groups truly understand, in real dollars, the financial impact the athletics program makes, their support is easier to obtain.

Therefore, at the conclusion of the 2001-02 academic year, we began a project to determine an accurate dollar figure for our effect on the local (Wicomico County, Md.) economy. We didn’t have the money to hire a consultant or do extensive survey work, so we used the resources we had and chose our survey participants carefully to ensure a high return rate.

While the project took almost two years to complete, the outcome proved well worth the effort. The following describes the process and results.

Because this undertaking required some expertise in economics and survey research, we turned to the Business, Economic, And Community Outreach Network (BEACON) within our university’s business school. BEACON is a self-supporting unit with a stated goal of contributing to the region’s business, economic, and community development through tangible outreach projects. The only drawback to this partnership was that, when a paying job came along for the program, our project would be placed on the back burner, thus constantly extending the timeframe of our project’s completion.

If a school does not have such resources, there is a good chance there may be an organization within the community that analyzes the local economy. A good starting point would be an area chamber of commerce. A pro bono arrangement could be made with a person or organization within the community to assist with this type of economic assessment.

The first step in our research was to compile a list of possible sources of local economic impact. These included the spending patterns of the following groups:

• visiting teams
• spectators of visiting teams
• parents of Salisbury athletes who attend home games
• other nonlocal spectators (scouts, media, etc.)
• game officials
• spectators of high school athletic events on our campus
• participants in our sports camps
• NCAA representatives visiting our campus
• prospective student-athletes and their families who make recruiting visits
• our own athletics staff members who would not live in the area if Salisbury did not have an athletics program
• Salisbury student-athletes who might not be here if it were not for our athletics program.

The next step was to narrow our research. We did not have the resources to examine the spending patterns of all the groups, so we needed to ascertain what figures would be the most accurate and easiest to obtain.

To help make this determination, we conducted a focus group of head coaches, student-athletes, and leaders from the hospitality industry and county tourism office. To assist in recruiting local business leaders to attend an evening meeting, we gave them a modest gift certificate for the university bookstore as a token of our appreciation.

During this process, a business professor from BEACON asked questions designed to assess the basic travel and spending habits of athletic teams and affiliated individuals. This gave us direction on how to format our survey questions and provided validity of our entire process.

From there, we determined that our best targets for assessing economic impact upon our community would be the visiting teams and the parents of our student-athletes. Why these two groups? They would be a manageable set of individuals to survey, and they were the people who consistently visited our area as a result of our program. We knew which teams visited during the previous year and the email addresses of their head coaches. We also had the mailing addresses for all of our student-athletes’ parents. Plus, our computer model allowed us to correlate the travel and spending habits of our parents with the habits of the parents of visiting team athletes.

We first surveyed all visiting head coaches who had competed at our university over the previous year. In the hopes of a good response rate, we developed a Web-based survey instrument using a software program called SphinxSurvey. This is an all-in-one program for the design, administration, processing, and analysis of surveys completed via the Web. It was easy to use and saved on mailing costs since we simply sent an e-mail with a link to the Web survey to all our visiting coaches.

The best part of using a Web-based program was that respondents simply had to point and click when answering our questions and then hit a send button. This resulted in an excellent response rate of 51.8 percent by the visiting coaches (56 total). An additional benefit of using a Web-based survey was that, when the surveys were returned, we were able to have the results sent directly into a database program to assist with the compilation of our statistics.

The questions posed to our visiting coaches were:

• What sport were you coaching?
• How many people were in the travel party?
• What type of transportation did you use?
• What was the distance you traveled?
• How many meals did you purchase?
• What was the average cost of each meal?
• What type of restaurant did you eat at?
• Did the team stay overnight?
• What was the average price spent per room?
• What other shopping did members of the travel party do during the trip?
• What dollar amounts were spent on these shopping trips?

We also surveyed all of our 16 head coaches. The computer model we used to analyze our data had the capability to draw a correlation between our teams’ spending behaviors when we travel and what visiting teams do while visiting our area. This added to our confidence in the figures.

The second chunk of information we wanted was spending patterns of the student-athletes’ parents—those affiliated with both our teams and visiting teams—while attending contests at Salisbury or other schools we compete against. Because of the difficulty in surveying parents from visiting schools, we limited our questions to the parents of our own student-athletes.

The survey administered to our student-athletes’ parents was done via a postal mailing with a return envelope included. Fortunately, we had an excellent response rate of over 55 percent (a total of 245). However, since this survey was not done electronically, it was more time consuming due to the inputting of the data into the computer software program.

The questions to our parents included:

• Where do you reside?
• What were the average number of people involved in the trip?
• What type of transportation did you use?
• What was the average number of miles traveled per trip?
• How many meals were purchased per person on the trip?
• What type of restaurant did you eat at?
• What was the average dollar amount spent per meal?
• What were the number of rooms rented for lodging and average amount spent per room?
• What additional activities did you engage in while in town and what was the average cost of those activities?

With all the data compiled, we were ready to assess the results. We again turned to computer software for help, using IMPLAN Professional™ to develop our economic impact model.

IMPLAN Professional allows a user to measure the impact of an entity, such as an athletics program, by taking into account every possible factor that could impact the local economy. This takes an economic impact study beyond just looking at the initial dollars being spent. It measures how the dollar is turned over within the community. For instance, a portion of the money spent in a restaurant becomes a part of a restaurant employee’s paycheck. That employee then purchases other items in the community. Thus, money spent by parents and visiting athletic teams while dining out in the community has a far greater economic impact than just the cost of the meals.

Once we placed our data into the economic impact software model, we were able to determine the local economic impact by visiting teams and parents. The total was estimated at $1,157,386 over the course of one academic year.

In addition, another interesting fact our study uncovered was the employment impact upon the local community. We discovered approximately 26 jobs would not exist within the community (in addition to our own staff) if we did not have an athletics program.

While we had expected the economic impact of our program to reach several hundred thousand dollars, we were pleasantly surprised when learning it was over one million dollars—especially considering the factors we did not assess as part of the study, such as referees, recruits, and full-time athletics staff. We believe that if a more thorough investigation were conducted, our economic impact would likely exceed two million dollars.

We feel this information will pay tremendous dividends as we look for increased internal and external support for our athletics program. We are sharing this information with the board members of our booster organization and university foundation fund-raisers with the hopes this will help with our fund-raising efforts within the community. In addition, this has generated interest from not only our senior level administrators at the university but some local politicians as well.

Since there has been a positive reaction to the actual economic impact of the athletics program, there is great hope and expectation we can parlay this into improvements and increased support in several areas. All of which we hope will improve our athletics program and enhance the experience for our student-athletes.

Coaches’ Survey
When evaluating the data from the visiting coaches’ survey, we found the following results:

Travel party size:
• 35.7% of respondents had a travel party of less than 20 people
• 44.6% had a travel party of 20 to 30 people
• 19.7% had a travel party of more than 31 people.

Type of transportation used:
• 42.8% used private charter buses
• 37.5% used vans
• 19.6% of teams used their institution’s vehicles

Meals during day trips:
• 32.1% of teams purchased their travel party one meal
• 26.9% purchased two meals
• 25.0% purchased three meals
• 16.0% did not purchase any meals

Meals during overnight trips:
• 44.6% of teams purchased their party fewer than three meals during the trip
• 28.6% purchased three meals
• 12.5% purchased four meals
• 14.3% purchased five or more meals

Type of restaurant:
• 50% ate at a fast food restaurant
• 50% chose a sit-down restaurant

Dollars spent on breakfast:
• 44.6% spent an average of less than $5
• 53.6% of the teams spent $5 to $10
• 1.7% spent more than $10.

Dollars spent on lunch:
• 12.5% spent less than $5
• 85.7% spent $5 to $10
• 1.7% spent $11 to $20.

Dollars spent on dinner:
• 7.1% spent less than $5
• 60.8% spent $5 to $10
• 32.1% spent $11 to $20

Number of rooms rented:
• 84.0% rented fewer than 10 rooms per visit
• 14.3% rented between 10 and 20 rooms
• 1.7% rented more than 20 rooms

Parents’ Survey
When evaluating the data from the parents’ survey, we found the following results:

• Parents traveled from 12 different states

Number of people in travel party:
• 5% traveled alone
• 65% included two people
• 23% included three people
• 7% had more than 3 people

Meals purchased on a day trip:
• 16% purchased 1 meal per person
• 54% purchased 2 meals per person
• 22% purchased 3 meals per person
(8% fell into the “other” category)

Meals purchased on an overnight trip:
• 6% purchased less than 3 meals per person
• 37% purchased 3 meals per person
• 18% purchased 4 meals per person
• 5% purchased 5 meals per person
• 14% purchased 6 meals or more per person
(20% gave no response, implying they did not travel overnight)

Type of restaurant:
• 66% chose to eat at a sit-down restaurant
• 30% chose fast food restaurants
• 4% chose to eat at the hotel/motel.

Dollars spent on breakfast:
• 39% spent less than $5 per person
• 51% spent between $5 and $10 per person
• 2% spent more than $10 per person
• 8% gave no response

Dollars spent on lunch:
• 9% spent less than $5 person
• 69% spent between $5 and $10 per person
• 17% spent between $11 and $20 per person
(5% were in the “other” category)

Dollars spent on dinner:
• 16% spent between $5 and $10 per person
• 63% of the parents spent between $11 and $20 per person
• 18% spent more than $20 per person
• 2% did not respond
• 1% spent less than $5 on dinner

Entertainment during overnight trip:
• 53% indicated they spent money on entertainment
• 26% indicated they did not
• 21% gave no response

Type of entertainment:
• 31% went shopping
• 10% went to the movies
• 10% went to the beach
(49% indicated the “other” category)