Grace Lochner
Mr. Reuter
A2 Economics
September 18th, 2020
The Economic Impact of the Pac-12 and Big Ten Postponing Football Seasons
Whether you’re a season ticket holder, college student, student athlete, or weekend couch warrior, a major aspect of the fall season is college sports such as football, especially in the Pac-12 and Big Ten schools including University of Wisconsin, Madison, University of Minnesota, University of Iowa, University of Arizona, Arizona State University, etc. This year, though, with the Coronavirus Pandemic, these institutions have pulled the plug on one of their largest sources of revenue, which is predicted to, and already has, make/made explosive economic impacts.
Andrew Brandt, the Business and Legal Analyst for the NFL and columnist in Sports Illustrated, and former VP of the Green Bay Packers, says that when he played for the Packers, they calculated over $10 million per game weekend, which is calculated to be roughly $14 million now. After researching similar regions within the Big Ten Conference, he found that the revenues were all very high:
Penn State: $130 million per season
Michigan: $112 million per season
Wisconsin Madison: $16 million per season
These yearly collections play a large role into the funding of the school and athletic program, which will produce positive externalities such as more students being drawn to attend the schools, who’s tuition will also bring in revenue, as well as more funding going into the education of those students, producing more successful people in the workplace post-college. The cancellation of these seasons, though, will have negative externalities such as surrounding hotels losing business from those who would have been travelling in town for game days, restaurants in the towns not collecting half of the revenue had students grabbed a bite to eat before or after the game, and those who report on the sidelines or do pre/post game talks not having games to discuss or report.
Dave Brown is a teaching professor of economics at Penn State and he says, “I was a little surprised by the cancellation of football. At the very least I thought they would try to have some sort of a season with limited fans… or maybe have a season with no fans just to still try to get some sort of TV network revenue.” Brown said that Penn State's football revenue “pretty much subsidizes” every sport at Penn State except for men’s hockey and basketball. The question remains then, if the athletic department can hold any other sport financially without the major support that football games ring in. Yet another negative externality of cancelling a single fall sport.
The economic downfalls that would come as a result of postponing or cancelling college football are undeniable as the revenue brought in is incomparable to any other sport. Yet aside from this, the players themselves are using their voices to try to continue forth with a fall season, simply due to the love of the game, as well as logistics that go with drafting for the NFL or redshirting a season. Trevor Lawrence, the projected number one draft out of Clemson University, who could sit the season out and still remain the top pick, is one of the loudest voices, who is joining the movement in attempting to revive an almost dead season. Not only do college towns and universities need revenue in order to provide quality education an athletic programs, trainings, and experiences, these players who dedicate their lives to performing at their best need the opportunity to put to showcase their work and provide their service of entertainment, also known as college football, that is a staple in the fall season and would be extremely detrimental to postpone or cancel all together.
Works Cited
“ABOUT ANDREW.” Andrew Brandt, 1 Jan. 1982, www.andrew-brandt.com/about-andrew/.
Brandt, Andrew. “Football's Economic Impact on College Towns, Players and the NFL.” Sports Illustrated, 18 Aug. 2020, www.si.com/nfl/2020/08/18/economic-fallout-nfl-impact-of-college-football-season-cancellations.
Forde, Ross Dellenger and Pat. “'We're All Effed. There's No Other Way to Look at This'.” Sports Illustrated, 8 Apr. 2020, www.si.com/college/2020/04/08/college-football-future-2020-ncaa-coronavirus.
Lawrence, Trevor. “People Are at Just as Much, If Not More Risk, If We Don't Play. Players Will All Be Sent Home to Their Own Communities Where Social Distancing Is Highly Unlikely and Medical Care and Expenses Will Be Placed on the Families If They Were to Contract covid19 (1).” Twitter, Twitter, 9 Aug. 2020, twitter.com/Trevorlawrencee/status/1292599402784325632.
I never realized how large of an impact closing a season would have on the schools’ budgets and the economy. I liked how you tied in all the factors that could change in those areas, like the local hotels and restaurants losing revenue as a result of less people traveling to watch the game. I also liked how you added in the part about college students and the positive externalities with having a large, well funded football team -- such as how it funds other sports teams at the school and helps to cover the tuition costs for students. I know that the University of Minnesota’s Men’s Gymnastics team was about to be cut due to the lack of funding, and now that they don’t have extra revenue from their football team, I wonder if they will get cut now.
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ReplyDeleteFirst of all, you did a great job making this an interesting blog piece that gave a concrete example positive and negative externalities. I agree that there should be some type of season for these players. You demonstrated the great financial impact of the cancelled season, and I think it would be smart to have games without an audience like they are at the professional level. Colleges have already lost so many opportunities/experiences that contribute to the “college experience”. Televised games could help with some of the financial loss that these colleges have faced, and it might restore some of the normal campus experiences.
I understand your concern for the direct impact on revenue from college football games, but I think there is even more to be said for surrounding businesses that benefit from them, as well as the impact on the athletes. The Milwaukee Business Journal reported that 585,000 people, or half of total Wisconsin tourists come to see Badgers games, which results in an economic impact of approximately 395 million. I think the college itself would do fine without football for a season, but some businesses may not. Of course, it is hard to determine the best way to go about having a season: do the players go into a bubble? Are some fans included?
ReplyDeletePersonally, I feel for the players as an athlete. I’ve already had a season taken away and it’s awful, but in college it would be a lot worse as these guys likely don’t have a lot of time on the field left and have put everything into their sport.
I thought that this was a well-written, insightful post. About one week ago, Big Ten football announced that they are bringing back college football this fall and that games will start on October 23th. But with this being said, The Lantern states, "The Big Ten greenlighted a nine-game season for conference football starting Oct. 23, however, the decision came with the caveat that spectators would not be allowed to attend." Because spectators are not allowed to attend Big Ten fottball games, I wonder how this will impact the economy of the Big Ten. I would assume that they would get revenue off of people watching their games virtually, but a majotrity of that money is going to go towards keeping Big Ten up and running, so I wonder how universities will be impacted by this. Great job!
ReplyDeleteI was also devastated when I heard the news of Big-10 football being cancelled, but I never took the time to really think about the economic impact it would have. I realized it would affect the college's revenue, but I didn't realize all of the other ways it impacts revenue too. Since players travel a lot, hotels will get less business, as well as restaurants, and less money will get put into scholarships and education now. I never realized how big of an impact college football has financially on the community as a whole, and your piece really enlightened me on that!I also think it's important to consider how this could affect seniors in college, as potentially missing your final year would be devastating, and something that they can't get back.
ReplyDeleteFirst off, I thought your blog was really interesting to read and I really liked how you added a tweet to show off another perspective. It blows my mind how much money is being lost per team because of the cancellation of the sport. I also agree with Trevor Lawrence’s tweet as people will be unlikely to social distance when they get back to their home town. If this keeps up for a matter of years, the economy will be losing money which is potentially more dangerous than Covid. How do you think this is going to impact future years? Do you think sports are going to be less likely to happen and the schools budget will drop?
ReplyDeleteI love that you chose a topic that many of us can relate to as college football fans. I felt it was a very well written article, especially how you used the opinion of a college football player. I found Lawrence's opinion to be very beneficial to form my own opinion and I was very interested. One thing that this blog made me think of was student athletes with full ride scholarships. Do you think that colleges would be allowed to take away that scholarship or reduce their scholarship in any way? If so, what would that mean for athletes who recieved a full ride that they were in desparate need of because they weren't financially stable enough to pay a college tuition?
ReplyDeleteI love that you chose to talk about something you can connect with and connected it to economics. Aside from that, though, I have heard that college football could be cancelled this year and I realized that it would have a significant impact on college economics but I guess I never fully grasped how serious it would be if that happened. You did a great job illustrating the severity of the situation to us using facts, quotes, and evidence. Continueing with this sports theme, because of all of the economic blows that colleges have suffered lately, they have had trouble holding onto men's gymnastics teams. Men's gymnastics is obviously a small sport compared to football and there weren't many D1 colleges to start, but now that they are having so many economic issues the number of colleges is starting to decline. This is just one of the many issues that arise from these economic blows and I hope that colleges will at least start to figure out how to maintain there sports.
ReplyDeleteCancelling the football season in these conferences was a huge mistake. In fact, it was such a big mistake that the Big Ten came back and changed the decision and said there will be a season with games starting in late october. There were several movements that were created to make this happen and the Big Ten got too much backlash for the cancellation. Is the Pac-12 next? We will have to wait and see in the near future. In addition to the cancelled season being a heartbreak for the players personal interests and desires this is obviously a blow to the universities financially. I remember reading that Barry Alvarez, the Wisconsin Athletic Director, said that Wisconsin could lose up to $100 million from not having a season. We are talking about hundreds of millions of dollars on the line. For some universities football brings in up to 95% of the athletic revenue. This is from the nearly 100,000 people stadium capacity, the merchandise, the food, etc. With the cancellation of the Big Ten being such a blow to people’s personal desires with taking away a central outlet in their life and the economic blow that some universities could face it was the right decision to get the season back on.
ReplyDeleteIt was crazy that they canceled the whole season but it's even crazier to look at the money side of things. From the merchandise to the really overpriced hot dogs I can see how it would defiantly make a dent in that years sales. Very nice job!
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