Economist to discuss cost of moving KU-MU football game from Memorial Stadium to Arrowhead
April 3, 2007
This chat has already taken place. Read the transcript below.
David Darling, an economist based in Manhattan, Kan., will discuss his analysis of the cost of moving the KU-MU football game next season from Memorial Stadium to Arrowhead Stadium in Kansas City, Mo. Read the full report in Sunday's Journal-World.
Good afternoon. This is Dennis Anderson, managing editor of the Lawrence Journal-World. I will be moderating today's chat with David Darling, a Manhattan-based economist who was commissioned by the J-W to determine the economic impact of the Kansas University-Missouri University football next November being moved from Memorial Stadium in Lawrence to Arrowhead Stadium in Kansas City, Mo. Welcome, David.
Thank you for the opportunity to join in this discussion.
Let me provide some background for readers on what you found in your analysis. You determined that moving the game to Arrowhead would cost Kansas, Douglas County and the city of Lawrence a combined $713,000. The Nov. 24 Thanksgiving weekend game - moved at Kansas University's behest from Memorial Stadium in Lawrence to the NFL stadium in Kansas City, Mo. - would have been expected to generate more than $3.5 million worth of retail sales and tax revenues into the coffers of businesses, governments and others who have come to rely on such rivalry games.
The $713,000 loss is the difference between what the KU-MU game would generate and revenue that an early-season home contest KU added to the schedule this season against a non-conference opponent would produce.
How did you come up with your numbers?
This project is different than some of my other economic studies.
I did not have a good starting point. So I took a while to come up with a spending pattern of fans.
My estimates are based on input and research fom a wide range of sources.
First, I started with 48,000 fans half of them from outside the Lawrence area. Then I used a fan budget from a study done in 1986. This then was inflated to 2007 values.
If I understand the Arrowhead deal correctly, the KU athletic department will bring home an extra $1 million over the next two years. If the AD spends that money on new scholarships, new employees, new marketing, and so forth, won't a lot of those dollars make their way into the Lawrence and Kansas economies and offset some of the loss from moving the game?
Yes. According to assitant athletic director Jim Marchiony, much of the money will circulate locally. That is ideal. But, I can not state a leakage factor. When I did an impact analysis of an additional $1 million a lot of the money went to the construction sector.
Did you consider the benefits of having next year's KU-MU game in KC rather than in Columbia? I think that more Lawrence people will go to a game in KC and will buy tailgate supplies and fill up with gas in Lawrence before they travel.
No. I did not. Any time one answers one question,
two or more pop up. That is good for business.
The Booth Hall of Fame was built and is being enhanced with $7million plus from the children of two KU fans who enjoyed attending athletic events at KU. How can you estimate the cost to KU in future gifts such as this which may not be given because the donors become alienated by moves such as the Arrowhead game?
No one can estimate the cost of something not happening.
This does prompt a thought. It would be interesting to look at the role of Kansas Athletics Inc. in the local economy.
Also, it would be interesting to learn who is on the board
of directors. Are all the local stakeholders represented. If not, why not?
Did you consider the long-term benefit of having a financially successful team, which often leads to wins, which leads to more financial success for Lawrence?
No. My task was to forecast the economic and fiscal impact of a KU-MU game, assuming it was held in Lawrence in the fall of 2007. I then calculated the marginal difference between a KU-MU game with a game with less of a fan base. K-State has experienced the impact of a successful football program. It has made a big difference to KSU and the local economy.
Mr. Darling, isn't common among those who request a cost analyis to often be told what they want to hear? Given this possibility, the question is: Why is the cost of moving a KU game to Kansas City really that necessary? The J/W should have paid for a study about what venues to bring to Lawrence to make money for the community.
The issue, I am told, was the decision to move the game to Arrowhead. I was chosen as a cosultant who had no interest in the issue and could be objective. You bring up an interesting point. Another question to ask is why KU does not choose to bring in a big name team?
I understand the immediate monetary consequences from this weekend, but how would you assess potential increases in economic revenue if having a game in Arrowhead can improve the quality of recruits, and improve the team overall, thus increasing the revenue from the other home games? Along a similar vein, surely the revenue from the remaining home games far surpasses what the home games were like 10 years ago, when the team fared much poorer. Finally, will an additional KC game (that would normally be in Columbia) help Lawrence at all?
Let's start with a point of fact. It is KU's turn to host MU. One can look at trends in fan turn-out at games to see if the fan base is growing. More fans in the Memorial Statium and more fans coming to town will drive up the impacts. An additional KU game may hurt the retail community when fans leave town on Thanksgiving weekend and also shop in the Kansas City Metro. More fans are expected to go to Arrowhead than went ot Columbia to the game in the fall of 2006.
We are out of questions. I want to thank our readers and Mr. Darling for participating in today's online chat.