I’ve had a few questions about the financial impact of a college football shutdown/season without fans on the local economy and have been looking for answers. The best I’ve found so far (h/t) comes from a college professor of economics who published this in Forbes:
… The total local effects differ widely between a relatively small community like Auburn, Alabama and larger places like Austin, Texas or Columbus, Ohio because of differences in the amount of additional local spending on game weekends and the size of that spending relative to the size of the local economy. Using average estimates of both the direct impact of the lost revenue along with the ripple effects using Bureau of Economic Analysis “multipliers” for this kind of activity, the total impact is about 1.7 times the size of the lost revenue. For the local areas with the very top revenue-producing programs the total loss amounts to about $250 million ($150 million x 1.7) and about $140 million for areas with programs earning $80 million per year. Those are not huge numbers for larger areas but a big blow to smaller college towns.
No Fans Allowed:
If fans are excluded from games but a full slate of games is played, the impact on university revenue would be similar to the 8-game outcome. About 30% of revenue for top-tier programs comes from ticket sales. With additional revenues from concessions and merchandise, somewhere around 35% of normal revenue would be lost. However, this scenario has a larger impact on the local area because of the lack of spending in local businesses by fans attending games. There is also the possibility of no fans allowed and a shortened schedule. The combined effect would be something like a 66% reduction in normal revenue.
Exactly whose paycheck is impacted depends on choices made by universities. Head coaches and main assistants will continue to get paid, although there may be some that agree to a salary reduction. On the other end, local businesses will lose out on the revenue and some temporary staff hired for game days will lose those jobs…
Now, how much you have to discount because, generally speaking, most people aren’t flocking to bars and restaurants at present (certainly not as they were in pre-COVID days, anyway) I can’t say, but it wouldn’t account for all of those numbers. In other words, the loss won’t be pretty for Athens’ businesses and their employees.
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