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More on the Economics of Bowl Games

2009 December 22
by Brad Humphreys

Inside Higher Ed reports that a number of teams participating in bowl games will not be taking the marching band, as well as reducing the number of cheerleaders and the size of the “official party” of administrators, faculty and staff that often travel with teams to bowl games. Boston College and Nevada will leave the band at home; Minnesota will reduce the number of band members and cheerleaders traveling to the Insight Bowl in Tempe. The reason? The bad economy, and the high cost of travel. Airfare (or charter flights), hotel rooms, food, practice facilities at the bowl site for the team and band all add up to large travel costs associated with playing in bowl games.

That’s just the tip of the iceberg. An article in the San Diego Union-Tribune exposes the dirty little secret of bowl games: on average, schools lose money when they participate in bowl games. Although participants in the BCS bowls will each receive $18,000,000 this year, some of that revenue must be shared with other conference members, reducing the payday to individual participants. Also, all bowls require participants to purchase a certain number of tickets, usually more than 10,000, to the game, no matter how many they actually sell to fans. Last year, Western Michigan was stuck with over 10,000 unsold tickets to the Texas Bowl, costing the university over $400,000. The Union-Tribune article claims that unsold ticket guarantees cost bowl participants over $15 million last year, and expects the cost to rise this year as fewer fans travel to bowl games across the country.

Bowl games are viewed as local economic development projects by host communities. The losses incurred by many participating institutions suggest a subsidy flowing from college football fans to cities that host bowl games. Worse, the existing evidence indicates that college bowl games actually do not actually generate much local economic benefit for host cities.

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