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ABSTRACT Pearson, Bryant Gatewood ABSTRACT Pearson, Bryant Gatewood. The Economic Impact of the 2000 NC State Football Season on Wake County, NC. (Under the direction of Dr. Michael A. Kanters) The purpose of this study was to objectively assess the economic impact of the 2000 NC State football season on Wake County. Data were collected from several sources to yield an accurate assessment of the economic impact of NC State football on its host community. These sources included: 1) visitor travel and expenditure data, 2) NC State football expenditure data, and 3) relevant data from Wake County. Visitor data were obtained by using two separate samples and surveys. A 20-item questionnaire was mailed to 1,000 randomly selected 2000 NC State football season ticket holders that reside outside of Wake County. In a separate convenience sample, another 1,200 subjects were administered a 12-itmem questionnaire at the Duke game on November 11, 2000. SPSS was then used to generate frequency distributions and summary statistics for the visitors in both samples. NC State football data were supplied by the NC State Athletics Department, and relevant Wake County data were retrieved from several different sources. The economic impact model used in this study (LOCI- Local Area Impact Model) used both local level data and input-output methods to determine the direct, indirect, and induced effects of the 2000 NC State football season on employment, income, and retail activity in Wake County. The multipliers used in this study were derived from input- output analysis of Wake County’s economy using IMPLAN Pro4, and the local level data consisted of the aforementioned visitor data, NC State football data, and relevant Wake County data. The results of the study indicated that the 2000 NC State football season generated 86 new jobs, $2,894,290 of new income, $9,096,507 of new retail spending, and $1,821,707 of new service purchases in Wake County. THE ECONOMIC IMPACT OF THE 2000 NC STATE FOOTBALL SEASON ON WAKE COUNTY, NC By BRYANT PEARSON A thesis submitted to the Graduate Faculty of North Carolina State University in Partial fulfillment of the Requirements for the Degree of Master of Science PARKS, RECREATION AND TOURISM MANAGEMENT Raleigh 2001 APPROVED BY: ______________________________ ______________________________ ________________________________ Chair of Advisory Committee BIOGRAPHY The author was born on December 6, 1972 in Atlanta, Georgia. He earned a Bachelor of Business Administration degree with a major in Marketing from the University of Georgia in 1995. After several years in sales, he decided to pursue a career in the sports profession and entered graduate school at NC State in order earn a Master of Science degree with a concentration in Sport Management. While in graduate school, he held a graduate assistantship and worked for both the Carolina Cobras of the Arena Football League and the Carolina Hurricanes of the National Hockey League. Currently, he is working for the University of Georgia Athletic Association in athletic development. ii ACKNKNOWLEDGEMENTS First, I want to thank Dr. Kanters for his encouragement, support and tutelage in this project. Without his guidance, knowledge, and understanding, this thesis would not have come to fruition. In addition to being an outstanding educator, mentor, and boss, he has been, most importantly, a great friend. I also want to extend my gratitude to Dr. Rea and Dr. Gustke for taking time out of their busy schedules to serve on my committee. I want to thank David and Tosha Cardenas, Mike and Amy Wirsching, Robert Sisson, and Greg Hoban for waking up early on a Saturday morning to help me distribute and collect surveys at the Duke game. I would also like to thank Robb Wade and Charlie Cobb for supplying me with prompt, accurate, and detailed information required to complete this project. Finally, I want to let all my family members know how much their love, encouragement, and support helps me in every endeavor or challenge in life I decide to undertake. iii TABLE OF CONTENTS LIST OF TABLES...................................................................................................... vi 1. INTRODUCTION........................................................................................... 1 2. LITERATURE REVIEW ................................................................................ 6 2.1 The History and Rise of “Big-Time” College Athletics ............................. 6 2.2 Benefits of “Big-Time” College Athletics ................................................. 12 2.3 Economic Impact...................................................................................... 20 2.4 Previous Studies ....................................................................................... 23 3. METHODS ..................................................................................................... 30 3.1 Visitor Data .............................................................................................. 31 3.2 Economic Impact Model........................................................................... 34 4. RESULTS ....................................................................................................... 36 4.1 Season Ticket Holders’ Survey ................................................................. 36 4.2 Single-game Ticket Purchasers’ Survey .................................................... 44 4.3 Economic Impact...................................................................................... 48 5. CONCLUSIONS............................................................................................. 57 5.1 Limitations ............................................................................................... 59 5.2 Future Research ........................................................................................ 61 6. LIST OF REFERENCES................................................................................. 63 7. APPENDICES A. Economic Impact Flow Chart..................................................................... 67 B. The Multiplier Effect of Visitor Spending .................................................. 68 C. Season Ticket Holders’ Survey................................................................... 69 iv D. Single-game Ticket Purchasers’ Survey ..................................................... 73 E. Majors of Season Ticket Holders That Were NC State Graduates ............... 76 v LIST OF TABLES Table 2.1 2001 Bowl Payouts .............................................................................. 11 Table 2.2 Reported Profits and Deficits of Division 1 Schools ............................. 14 Table 4.1 Summary Statistics for Socio-Demographic Variables of Season Ticket Holders.......................................................................... 37 Table 4.2 Summary Statistics for Level of Involvement for Season Ticket Holders.......................................................................... 39 Table 4.3 Travel Patterns of Season Ticket Holders to Home Games ................... 42 Table 4.4 Season Ticket Holders’ Expenditures in Wake County......................... 44 Table 4.5 Summary Statistics for Socio-Demographic Variables of Single-game Ticket Purchasers............................................................. 45 Table 4.6 Travel Patterns of Single-game Ticket Purchasers to Home Games ....................................................................................... 47 Table 4.7 Single-game Ticket Purchasers’ Expenditures in Wake County ....................................................................................... 48 Table 4.8 1999 Tax Rates and Collections ........................................................... 49 Table 4.9 Retail Activity...................................................................................... 50 Table 4.10 Public Service Costs............................................................................. 50 Table 4.11 Demographic and Economic Base Data................................................ 51 Table 4.12 General 2000 Football Program Information ........................................ 52 Table 4.13 Tourist Related Information ................................................................. 55 Table 4.14 Economic Impact of the 2000 NC State Football Season on Wake County ...................................................................... 56 vi INTRODUCTION Since its humble beginnings in 1852, intercollegiate athletics has evolved into a highly visible, extremely competitive, commercial enterprise in today’s society. For example, the most prestigious 2001 bowls had payouts reaching $13.5 million per team; ABC signed a seven-year deal before the 1998-99 season worth an estimated $700 million for the broadcast rights for the four BCS bowl games (Orange, Fiesta, Sugar, and Rose); CBS paid $6 billion for the rights to broadcast the men’s NCAA Tournament (basketball) through 2013; and the NCAA catapulted into the billionaire range as an organization in the 1990’s (Houck, 2000; Sperber, 2000; Zimbalist, 1999). In addition to the astronomical television contracts, bowl revenues, and NCAA Tournament revenues, the media also tends to accent exorbitant coaches’ salaries and seemingly lucrative sponsorship and licensing agreements. As a result, widespread public perception is that athletic programs are highly profitable. Contrary to public perception, however, one of the best-kept secrets and most sobering realities about college athletics is
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