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Post-season college baseball & economic impact

2009 June 2
by Skip Sauer

This story from Tallahassee reports on the economic impact of hosting a regional and super-regional series in the NCAA baseball tournament. Like most media coverage on economic impact, the story is written as if the local dollars that are generated by the sporting event are significant. No doubt they are, for the businesses impacted. If I were selling Florida State t-shirts and ball caps I’d be delighted: sales at the Garnet and Gold Stores were up a reported $10,000 to $15,000 last weekend. Restaurant sales at a place named Po’ Boys — no doubt a favorite hangout for local sports fans — were 20% ahead of normal.

As usual, however, the dismal scientist doesn’t see that there is much to crow about in these figures. Some fans who bought a t-shirt at the regional are likely to wear it to next fall’s football game. The purchases in an otherwise dull sporting period for FSU substitute from the much larger mass of purchases that stem from the crowds at home football games. Once again, the unseen is more difficult to detect than “the seen.” The same goes for most of the po’ boy sandwiches sold last weekend. Some of those dollars were not spent in Tallahassee grocery stores, Tallahassee restaurants more distant from the stadium, and locations in Florida from where some FSU fans traveled. Unseen, and hard to measure, but doubtless a significant offset.

The largest figure mentioned in the article is the $102,000 that FSU bid to get next weekend’s super-regional (the bid for the last weekend’s regional was $92,000). As stated by FSU’s sports information director, any sales by the University over and above the bid are kept by FSU, and the NCAA collects the bid amount, if accepted. Now, if you are Florida State and interested in gaining national television exposure by competing, and winning in the NCAA championship, you will have to take into account the value of this exposure, and the fact that Arkansas, their competitor for the super-regional, is interested in the same thing. Competitive bidding should push bid prices to a point where the expected profit (inclusive of the value of exposure) in increasing the bid falls to zero. How much does that leave FSU?

The stadium at Florida States “seats” about 6500 (at some venues, staff, the grounds crew, and even the ballplayers are counted as those in attendance, so a hard count of actual paying customers is not easy to come by). Tickets are sold as both singles and as a block for the entire tournament. At Clemson’s regional last weekend, the tournament block cost $70 for the seven scheduled games. (Note: Clemson also “seats” about 6500, and reported attendance of 6217 for Monday’s championship contest, after two competitors, Alabama and Tennesee Tech had been eliminated. No doubt Alabama’s fans were long gone by then.) Assuming a sell-out and comparable prices, gross ticket sales would be about $455,000. Subtract the NCAA’s fee, the marginal costs of cleanup, staffing, groundskeeping, and umpiring, and a rough guesstimate is that FSU might have cleared between $200,000 and $300,000 on ticket sales. Add some additional profit from concessions, perhaps a bucks or two per attendee (as opposed to tickets sold, as FSU only played three games en route to their championship), and perhaps the larger figure is the closer to the truth.

The bottom line is that the NCAA collects a nice chunk of change for lending its brand to the sixteen regional and eight super-regional contests during this two week period: something on the order of $2.4 million. (TV revenue should be tacked on to this). The hosting schools, depending on ticket sales, might bring in enough net revenue to cover the costs of the baseball season, which in the past has not been a revenue-generating sport. The food and t-shirt sales are nice for a few local vendors, but small potatoes in the larger scheme of things.

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