Tourism economic impact of University of Michigan football

Photo:  Michigan Stadium.  University of Michigan photo.

The impact of college sports, primarily football and basketball, can be quite powerful on local economies, because most of the schools aren't located in center cities.

Yes, I went to UM.  But seeing people get into fights after the football team lost turned me off big time sports more generally--so I don't go to games and watch sports on television almost never.

That being said, being an alum I'd rather the team win than lose, and I admit to being favorable towards U of Maryland's move to the Big 10 conference mostly because that means that the many Michigan alumni living in the DC area can see the various Michigan sports teams play locally, even if I am not personally interested.

... earlier in the year, American City Business Journals--the company publishes the Washington Business Journal and Baltimore Business Journal among others, did an investigative report on the capacity of cities to support additional professional sports teams ("American City Business Journals calculates the capacity of North American metropolitan areas to support new/additional professional sports teams").

Interestingly, the analysis also included large college football and basketball teams as part of the study.

This makes sense given the increasingly number of examples of college stadiums getting local public financing (the City of Chicago is financing the creation of an arena for DePaul University's basketball team and relocating the facility to the convention district, the Baylor football stadium was located in Downtown Waco and did receive almost 1/4 of its construction funding from the city), selling naming rights for stadiums, etc.

My only criticism of the study was that major college teams are likely to draw out-of-area attendees, unlike most professional sports teams and therefore the economic capacity to support college teams is a little different as they draw attendees beyond the boundaries of the metropolitan economy, which was the economic unit of analysis for the ACBJ study.

People walking on Hoover Street after a football game in Ann Arbor, Michigan. Photographer unknown.

A study on the economic impact of Michigan football on tourism visitation and spending in Ann Arbor ("What are Michigan football weekends worth to Ann Arbor tourism? Examining the economic impact," MLive) found that almost 90% of game attendees live outside of Washtenaw County, which supports my thesis. From the article:

Provided to MLive by the AAACVB, the study looked at the total net new economic impact on Washtenaw County from attendance at U-M football games during the 2013 season. By "net new economic impact," that refers to economic activity in the county that wouldn't have occurred if not for home football games.

Those games, in the instance of 2013, came against Central Michigan, Notre Dame, Akron, Minnesota, Indiana, Nebraska and Ohio State and drew 781,144 fans to Michigan Stadium.

The study by AEG concluded that those weekends combined to attract 632,853 visitors from outside the Ann Arbor area. That number includes those visiting but not attending the game, as well as ticketholders.

Perhaps the most surprising aspect of the study was the number of fans attending from outside the Ann Arbor area. AEG geocoded season ticket and single-game ticket sales by ZIP codes to determine that an estimated 87.3 percent of ticketholders come from outside Washtenaw County's roughly 350,000 residents.

According to AAACVB president Mary Kerr, previous estimates of that number were about 60 percent.

"That was significantly higher than we thought were coming from outside the area," Kerr said.

Winning makes a big difference.  The data in the study from the MLive report is from 2013, and in 2013 and 2014, the football team wasn't particularly successful.

Parking at Ann Arbor Pioneer High School. School system photo.

Earlier this week the Washington Post reported ("The Harbaugh effect: A Big Blue boom, all the way down to the parking lots") that the Ann Arbor Public School system, which rents parking spaces during games at the high school across the street from the stadium, finds that revenue is significantly greater this year already, compared to last year's losing season.  From the article:

The large parking lot at the big high school across the street from the giant stadium reaped between $43,000 and $54,000 for each of the first three home college football games of 2014. For the first three games of 2015, make that $62,000, $65,000 and $59,000.

“Isn’t that amazing, how one person can make that much difference?” Judy Solowczuk said.

Likely, revenue increases from increased attendance will be pronounced, especially in the hospitality sector (hotels/motels, restaurants, etc.).

Spending by nonresidents, not providing public financing for stadiums.  College sports may be a rare example, when the localities don't pay much towards a stadium or public safety management on the day of a game (which is unlikely) and so there can be considerable local financial benefit with little cost (except for places like Waco and Chicago).

Besides not "having" to provide funding for stadiums and arenas, the difference comes down to capture of spending from non-residents.  Most research on the economic impact of sports expenditures finds that it doesn't add new spending, but merely substitutes for other spending, because attendees are local

Professor Tim Chapin and the Political Economy of Sports Team Facilities.  A couple weeks ago, I happened to have an e-conversation with Neil deMause, co-author of the book Field of Schemes, and webmaster of the companion website, about some of these questions, and he pointed me to the work of Tim Chapin, a professor at Florida State University.

I hate to admit I wasn't familiar with Chapin's work, which looks at stadium development over long periods of time and the writings of geographers to drill down more deeply to consider the factors that yield more economic return to localities from certain types of facilities.

-- "Sports Facilities as Urban Revitalization Catalysts"
-- "Identifying the Real Costs and Benefits of Sports Facilities"
-- "The Political Economy of Sports Facility Location"