Impact of the University of Texas Athletics Department
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Impact of The University of Texas Athletics Department September 8, 2015 8121 Bee Cave Road, Suite 100 Austin, TX 78746 Table of Contents Introduction & Methodology……………..…………………………………………… 3 Executive Summary…………………………………………...……………………........ 8 Impact of Capital Investment………………………………………………………….. 17 Impact of Texas Football ………………………….………….….…………………..… 18 Impact of Men’s & Women’s Basketball……….…………..……………….…… 21 Impact of Texas Relays/Track & Field……………….….………………………..… 23 Impact of the Frank Erwin Center…..…………………..………………………..… 26 Impact of All Other UT Sports….………………………..………………………..… 28 Additional Impacts……………………………………………..………………………..… 31 Appendix………………………………………………………………………………………... 36 About AngelouEconomics…………………………………..………………………..… 45 Texas Athletics Economic Impact |2 Introduction & Methodology INTRODUCTION This report quantifies the economic impact of The University of Texas at Austin Athletics Department (Texas Athletics) for the most recent completed year, the 2013 – 2014 academic year, marking the first time that a comprehensive economic analysis has been completed for all of Texas Athletics. Texas Athletics is a major economic contributor to Austin and to the state of Texas. Texas Athletics manages 20 intercollegiate sport teams, approximately 200 home events per year, and more than 500 student-athletes. Outside of Men’s & Women’s Basketball, the Frank Erwin Center hosts an average of 190 events per year. The department employs approximately 350 people with a median salary of $53,864. AngelouEconomics has been retained by Texas Athletics to evaluate the full economic impact of the department on the Austin region as well as the state of Texas for the following venues: 1. Football • Including the 2013 AT&T Red River Showdown and Valero Alamo Bowl 2. Basketball • Both Men’s and Women’s Basketball 3. Texas Relays/Track & Field • Including Texas Relays and the UIL State Track & Field Meet 4. Frank Erwin Jr Special Events Center • Concerts and events 5. All Other UT Sports • Softball, baseball, golf, rowing, soccer, swimming, tennis, and volleyball The economic impact analysis put forth in this report will measure Texas Athletics’ impact in terms of jobs, labor income, tax benefit, and total economic output. For this study, economic output is defined as the total value of all goods and services produced within the local economy, both for the Austin region and for the state of Texas. Texas Athletics Economic Impact |3 Introduction & Methodology CAPITAL INVESTMENT, TEXAS ATHLETICS OPERATIONS, & VISITOR SPENDING In order to gain a full evaluation of the impact of Texas Athletics, an analysis of capital investments made by Texas Athletics, on-going Texas Athletics operations, and visitor spending was conducted. The total economic impact of Texas Athletics is defined by the sum of these three expenditure categories. TOTAL Capital Texas Athletics Visitor Investment Operations Spending ECONOMIC OUTPUT Capital Investment: Over the past 20 years, Texas Athletics has invested more than $465 million in the Austin economy through the building and renovation of athletics facilities. The construction and expansion of athletics facilities will generate additional economic impacts to the region. One such impact would be the increase in employment that would be necessary to cover the maintenance of those new and updated facilities. Texas Athletics Operations: Operational expenses for the 2013 – 2014 academic year were provided to AngelouEconomics by Texas Athletics and their partners. Only spending captured within the region of analysis, Austin and Texas, is included in the model. Texas Athletics Program Revenues 2013 – 2014 Operating Budgets Football $112,508,162 Men’s & Women’s Basketball $16,618,227 Texas Relays/Track & Field $345,000 / $884,388 Frank Erwin Center $18,556,268 All Other Sports $10,732,450 Total $159,644,495 Source: Texas Athletics Texas Athletics Economic Impact |4 Introduction & Methodology Visitor Spending: Visitor spending includes the spending of out-of-town fans as they attended 2013 – 2014 events. Such spending includes hotel costs, restaurants, automobile expenses, shopping, and entertainment. These figures were modeled by multiplying the number of out-of-town visitors by the average spending per person. In 2013, F1 weekend was the same weekend that Texas Athletics hosted Oklahoma State at Darrell K Royal Stadium. Hotel prices for F1 weekend are 2.5 times higher than on a normal weekend. The average expenditures for the Oklahoma State game were adjusted to reflect the increased hotel prices. Total Out-of-Town Visitors by Venue Average Per Person Expenditures Annual Attendance Spending Football 484,617 Hotel (F1 Weekend) $51.80 ($122.16) Men’s Basketball 41,928 Women’s Basketball 7,289 Retail $31.20 Texas Relays/UIL Track 52,586 Restaurants $31.90 Frank Erwin Center 219,292 Transportation $33.30 All Other Sports 62,434 Total 868,146 Total (F1 Weekend) $148.20 ($218.59) Total Visitor Spending by Venue Texas Relays/ Frank Erwin All Other Football Basketball Total UIL Track Center Sports Hotel $30,829,901 $2,876,133 $7,071,083 $9,041,141 $3,753,985 $53,572,243 Retail $15,182,730 $1,623,566 $2,890,583 $5,829,690 $2,252,337 $27,778,906 Restaurants $15,501,605 $1,803,470 $4,205,885 $13,231,095 $2,252,105 $36,994,160 Transportation $16,189,957 $1,818,370 $3,233,346 $10,242,185 $2,481,361 $33,965,219 Total $77,704,193 $8,121,539 $17,400,897 $38,344,111 $10,739,787 $152,310,527 Sources: Smith Travel Research, D. K. Shifflet & Associates, AngelouEconomics, Texas Athletics Economic Impact Results: All results presented for the economic impact analysis are adjusted for inflation and represent 2015 dollars. Texas Athletics Economic Impact |5 Introduction & Methodology Total hotel room stays are computed applying the average of 2.5 per room to the total out-of-town attendance. Hotel Night Stays by Venue Total Annual Football 193,846 Basketball 19,687 Texas Relays/UIL 22,385 Frank Erwin Center 87,717 All Other Sports 27,921 Total 351,556 Sources: AngelouEconomics, Texas Athletics Visitor spending totaled $152.3 million, which serves as the input for the visitor spending model. The total economic benefit of visitor spending will be much higher as the direct spending creates additional impacts to the local economy. AUSTIN AND TEXAS MODEL This report presents two models for the economic impact of Texas Athletics: the Austin model and the Texas model. The Austin model analyzes the impact of operation expenses and visitor expenditures in the Austin region. The Austin region is defined by the 5 county area, including Bastrop, Caldwell, Hays, Travis, and Williamson Counties. The second model measures the impact that Texas Athletics has on Texas. The Texas impacts include all impacts that occur outside of the Austin region but within the state. This accounts for all away games, including the 2013 Valero Alamo Bowl in San Antonio as well as the AT&T Red River Showdown in Dallas. Texas Athletics Economic Impact |6 Introduction & Methodology WHAT IS AN ECONOMIC IMPACT The total economic impact of Texas Athletics is derived through direct spending by the department as well as expenditures by visitors. Money spent by either party on goods or services becomes revenue for local businesses. These businesses spend their new revenue to acquire employees and goods necessary to fulfill orders, thus placing the money back into the local economy. This snowball spending effect is referred to by economists as the “Multiplier Effect.” The multiplier effect is made up of the direct, indirect, and induced impacts. AngelouEconomics utilized the IMPLAN Input-Output Model to calculate the effect that direct spending had on the Austin and Texas economies. Direct Indirect Induced Limited to the effects in the Includes increases to sales, The household spending local economy that occur incomes, and jobs in patterns of employees as a direct result from business sectors that through all business Texas Athletics. support or supply Texas sectors that experience Athletics. increased earnings as a result of Texas Athletics. Source: Implan Texas Athletics Economic Impact |7 Executive Summary TEXAS ATHLETICS DEPARTMENT In 2014, AngelouEconomics was engaged by Texas Athletics to conduct an economic impact analysis for the most recently completed 2013 – 2014 academic year. The economic impacts will be concentrated on the following venues: 1. Longhorns Football 2. Men’s & Women’s Basketball 3. Texas Relays/Track & Field 4. Frank Erwin Center 5. All Other UT Sports Texas Athletics' economic impact on the Austin and Texas economy is generated through the following input factors: Average Annual Capital Investment & Expansion Projects Texas Athletics Yearly Operational Budget Expenditures Visitor Spending of Out-of-Town Event Attendees Tailgating The 2013 AT&T Red River Showdown in Dallas (impact on state) The 2013 Valero Alamo Bowl in San Antonio (impact on state) In addition, there are many other benefits of Texas Athletics that go beyond the economic contributions. Texas Athletics benefits the entire university system through the Longhorns brand, which garners alumni support through monetary donations. Texas Athletics creates significant impact in the Austin and Texas economies. Its operations are a boon to local small businesses and provide economic stability to the region. Texas Athletics Economic Impact |8 Executive Summary REPORT HIGHLIGHTS Key Highlights: Texas Athletics accounts for 5.2% of the $6.3 billion travel industry in Austin Average spending per person