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Archive for Sunday, April 1, 2007

Moving game to K.C. means ‘major business opportunity’ lost

Economist’s analysis confirms fears of area business owners

April 1, 2007

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Judy Billings, executive vice president for the Lawrence Chamber of Commerce

Judy Billings, executive vice president for the Lawrence Chamber of Commerce, discusses how the game's relocation is affecting "town-gown" relations. Enlarge video

Jim Marchiony, an associate athletics director at Kansas University

Jim Marchiony, an associate athletics director at Kansas University, discusses how he expectes Lawrence businesses to react to KU's decision to move the game to Arrowhead Stadium. Enlarge video

Cinda Garrison, owner of Prairie Patches in downtown Lawrence

Cinda Garrison, owner of Prairie Patches in downtown Lawrence, discusses how she expects KU to react to business concerns about the game being moved. Enlarge video

Kevin Weiberg, commissioner of the Big 12 Conference, discusses the move of the KU-MU game to Arrowhead Stadium.

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Moving this season's Kansas-Missouri football game to Arrowhead Stadium will cost Kansas, Douglas County and the city of Lawrence a combined $713,000, according to an economist's analysis commissioned by the Journal-World.

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 pump 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 nonconference opponent would produce.

That money - which would have gone for everything from bratwurst for barbecues to beer in bars and holiday gifts to be purchased on Massachusetts Street - will be spent in Missouri instead, said David Darling, a retired Kansas State University economist hired by the newspaper to assess the effects of shifting the game to Arrowhead Stadium.

"It's a major business opportunity wrapped around a big game-day event," said Darling, who runs a private consulting firm after 22 years on staff at K-State, where he studied retail spending and helped communities with strategic economic planning.

Missing shoppers

The financial conclusion confirms the fears of the Lawrence Chamber of Commerce and an array of business owners in Lawrence, who worry that they'll be missing out on sales that go along with a full, or nearly full, Memorial Stadium.

"We have great concern about this," said Mayor Mike Amyx, who already has joined fellow commissioners in formally objecting to the game's relocation. "These are severe consequences for us. These are losses for all the businesses who help support activities throughout the community."

That the Missouri game is considered the premier home game on KU's slate this season - and will fall during the pivotal first weekend of the winter holiday shopping season - frustrates merchants even more.

"It definitely would've been the biggest weekend, with the game in Lawrence," said Cinda Garrison, owner of Prairie Patches, which sells gifts, flowers and an array of KU-oriented items at 821 Mass. in downtown Lawrence. "It would've kept people here and brought people in. Now there's not going to be anybody here to shop."

Couldn't turn it down

Leaders at Kansas Athletics Inc. defend their decision to play the game at Arrowhead.

Moving the game will guarantee the department at least $1 million in revenues during each of the next two years, said Jim Marchiony, an associate athletics director. During the last home Missouri game, in 2005, the athletics department banked a profit of $719,000, then zero from last year's game in Columbia, Mo.

"This is something that we could not turn down," Marchiony said.

The department also ensured that it had eight home games - instead of the usual seven - scheduled for this year so that the Missouri game could be moved while still keeping the customary seven home games in Lawrence.

Marchiony said he hadn't heard any complaints from businesses personally but knows discontent exists. He's a member of the chamber's board of directors, which, along with the Lawrence City Commission, has publicly expressed to the athletics department displeasure about the move.

"I think most business owners realize what Kansas athletics and the University of Kansas do for the city of Lawrence on a year-round basis and - they don't necessarily like it, and we don't expect them to like it - I think they'll sit back and appreciate what we do," Marchiony said.

Negative effects

In his analysis, Darling calculated two financial conclusions: the total economic impact of the Missouri game being moved, and the difference between what the Missouri game would be expected to generate and what KU's additional home game will be expected to generate this season.

Darling determined that the Missouri game would spur $3.57 million in spending. The replacement game - whether it's considered the Sept. 1 opener against Central Michigan, the Sept. 8 game against Southeast Louisiana or another matchup in KU's preconference schedule - will be expected to generate $2.69 million in spending.

That means trading the Missouri game for an early-season, out-of-conference contest will leave merchants, governments and others missing out on an estimated $713,025, Darling said.

Marchiony acknowledged that KU might have played all eight home games in Lawrence if the Arrowhead option had not materialized. The NCAA, in a change that went into effect last season, now allows teams to play up to 12 regular season games, instead of the previous limit of 11.

The extension allows KU to play four nonconference games instead of the usual three.

But Marchiony noted that KU could have opted to play a road game elsewhere for "a ton of money," he said, rather than schedule an additional nonconference game at Memorial Stadium.

Taking into account that KU added a replacement home game, Darling said, local and state governments will be going without some potential tax revenues:

l Lawrence will miss out on about $22,519 in the city's share of sales taxes, while the county would miss out on an estimated $4,226. The city total includes an estimated decline of about $3,000 in taxes on sales of alcoholic beverages.

l The state of Kansas will miss out on an estimated $62,182 in sales tax revenues.

State Sen. Roger Pine, R-Lawrence, said sales tax revenues finance an array of government services. At the state level, such money goes into the general fund, which finances K-12 education, social services and hundreds of other programs and services that Kansans rely on.

"Any way you look at it, anytime a community or the state loses revenue, that has a negative effect," Pine said. "There's not anything the state of Kansas can do about it. I don't think we want to interfere with their decision making, but, on the other hand, we're disappointed that we don't get to share in the benefits as we would otherwise."

'Long-term loss'

Kevin Weiberg, commissioner of the Big 12 Conference, said he would prefer to see all conference games played on campus or in a school's home community rather than at a pro stadium or other off-campus venue.

But Weiberg did acknowledge that exceptions already are in place, such as the annual Red River Shootout - now, in recent years, known as the Red River Rivalry - that has pitted Texas and Oklahoma on the grounds of the Texas State Fair in Dallas each year since 1929.

"It's one of the reasons that you have these kinds of high-profile sporting events: to draw folks back to the campus and the local community," Weiberg said, noting that such decisions are left to member schools. "I think that these things should be fairly rare, and so far they are. They're limited. And it's hard to imagine a scenario where there would be more than just the occasional one game for any one institution."

KU officials will wait to see how the two-year deal works at Arrowhead before deciding whether to pursue a continuation, Marchiony said: "We'll make a judgment after that."

But Bob Johnson, chairman of the Douglas County Commission, doesn't expect to see another KU-MU game played at the base of Mount Oread during his lifetime.

"It's a long-term loss, but what can we do?" said Johnson, a football season-ticket holder who does not plan to attend the game at Arrowhead, a decision he calls "my little way" of protesting. "We can grouse about it. That's it."

While such grousing likely will fade, Johnson said, the fiscal losses will endure for years to come.

"We are not, today, at peace with this. My guess is in another generation or two we will be."

Until then, Johnson said, "we'll have to find ways to make this up."

Comments

jmadison 7 years, 4 months ago

Biased study, bought and paid for the Simons family.

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Michael Capra 7 years, 4 months ago

I BLAME THE CITY COMISH FOR LETTING THIS HAPPEN

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Jeff Barclay 7 years, 4 months ago

Big time college sports. You've asked for it. You've expected it. Now, unfortunately, you've got what you asked for.

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monkeyhawk 7 years, 4 months ago

Why don't we see the same outrage about all the businesses that have closed or never been allowed to operate in Lawrence, not to mention all the job losses thus requiring the dreaded commute?

"It's a long-term loss, but what can we do?" said Johnson, a football season-ticket holder who does not plan to attend the game at Arrowhead, a decision he calls "my little way" of protesting. "We can grouse about it. That's it."

One of the few things the county and city commissions cannot control...kind of a helpless feeling, isn't it?

I will exercise my little way of protesting on Tuesday. Then I will look forward to the county elections.

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oldgoof 7 years, 4 months ago

I join Barclay's 7:38 post.

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Mike Blur 7 years, 4 months ago

Agreed, this is the price we pay for being big-time collegiate sporting competitors.

Not only do the coffers of the KUAC get filled--

Believe it or not, many top-notch recruits are swayed by the opportunity to play even ONE GAME in an NFL stadium. Better players means KU might actually sell out Memorial Stadium for every game, not just NU, KSU and (sometimes) MU. Better players mean more TV games (and not just Fox Sports Regional slots.) Better players might mean getting off that bowl bubble and actually qualifying for something other than a "dot-com" bowl.

It's something that must be done if we are going to be a big-time player in intercollegiate athletics.

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TheNorthlander 7 years, 4 months ago

The KU-MU is scheduled in Lawrence every other year. Businesses can be disappointed that they can not rely on that potential revenue this year, but are they actually relying on it? Are they building business strategies and survival around it?

KU has an additional game on the home schedule, to bring the total to 7 played in Lawrence. The goal will be 6-7 home games in Lawrence each year.

Business owners will have to become creative and find a way to make-up their apparent margin profit loss. The smart businesses will do so.

KU and MU are joining the trend of moving rivalry games to larger venues, so plan on this being the case for many years to come. The following two years are "experiment years," but will prove to work.

Also, does this study account for games played 2 days after a Thanksgiving holiday weekend, including when students are not staying in the dorms and/or Lawrence?

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Bruce Bertsch 7 years, 4 months ago

While the study is not flawed, it looks only at the financial impact of moving the game and replacing it with a lesser game. It assumes that all other factors remain the same, which is not the case as that Saturday is the first Saturday after Thanksgiving which is a HUGE shopping day. Given that this variable is not included it is likely that the $713k number is highly inflated. Of course that is what the owners of the LJW wanted.

Perhaps they should also hire a study of what the financial results would be if KU were to go 0-12 for 3 years, due to bad recruiting, as opposed to the last three years of record attendance.

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getserious 7 years, 4 months ago

Those people that say that this is no big loss or that we have 7 other home games are naive at best, idots at worst. Toledo, or SouthEastWest Louisiana Tech, will bring about 200 fans, not to mention that KU will have a less turnout as well. I don't care if we were 0-11 when Mizzou came to town, it would be crowded. Plus the Tigers would bring about 5 to 10 thousand. If anything, I think the report is wrong, I would say the loss to be more around 3 million dollars. I know restaurant(not chain) and bar owners who's busiest days of the year are Big 12 home football games. This was a terrible, terrible,(Lew get your head out of your A$$) decision. Lew needs to realize that we are in this togeter. University and town. Quit screwing it up. Mayor Amyx, do something!!!!!

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skinny 7 years, 4 months ago

Let's see, KU has the option to make money for themselves to support the football program or KU makes money for the City of Lawrence to please the businessmen?? I think this is a pretty easy question to answer.

You go Lew, you the MAN!

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MyName 7 years, 4 months ago

Spoken like a true.... wait a minute, which town do you live in again Marion??

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Janet Lowther 7 years, 4 months ago

Just personally, I wouldn't mind if they moved all of 'em to KC.

Game days are just SO much of a a pain.

Of course, I wouldn't mind if KU got out of the big time sports thing altogether and spent the money on being an excellent school. Or affordable school, which it isn't either.

Admittedly KU has some great programs, but it has a whole lot of programs which could do with some attention.

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caveatguy 7 years, 4 months ago

Perkins doesn't work for you. He works for one man: Hemenway. If you don't like what is going on, call him, or his bosses, the appointed members of the Board of Regents.

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Fred Whitehead Jr. 7 years, 4 months ago

I saw this travisty coming when they moved the Oklahoma-Kansas game. Yup, Big Time Sports, Big Business, all the same. To hell with tradition, loyalty to the "old alma mater", fan support, community support, let's help the Kansas City Chiefs, a second rate small market team who's poor winning record has become predictible, support their crumbling stadium, fill their coffers with $20.00 parking fees, $5.00 hot dogs, $10.00 beer (ya think BEER has something to do with this, huh????) and other outrageous costs endured by the fans of this bumbling professional football team. Yeah, Lew, lets support the venue of the KC Dancing Squaws!!!!!!!What a notable idea, they will let the Kansas-Missouri game be played on an otherwise "dark" date and rake in the largess of what used to be the benefit of local merchants of a home team football game. And the "extra" game is a farce, how much will the local merchants get from a "game' with Sidewash U. Great substitue for a traditional rivalry game, eh??

The solution?!? STAY HOME! WATCH THE GAME ON TV. DO NOT PLAY INTO THE HANDS OF THESE GREEDY BASTARDS.

Simple. You the fans have the power, they cannot hold you up and shake money out of your pockets. Speak LOUDLY with your feet and keep your ticket, parking, hot dog and beer money in your pocket and watch the game on the old tube. That will send an absolutely undeniable message to the Dictators of the Dollars. Without which, they are powerless. Think it over.

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rockchalk90 7 years, 4 months ago

This analysis doesn't seem to take into account the extra $1 million that the KU athletic department will pocket from the Arrowhead deal. It assumes that none of that million will make its way into the Lawrence or Kansas economy. But more money for scholarships, higher salaries, or more ads in the Journal-World will eventually help the local economy.

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TheNorthlander 7 years, 4 months ago

getserious, "Toledo, or SouthEastWest Louisiana Tech, will bring about 200 fans, not to mention that KU will have a less turnout as well. I don't care if we were 0-11 when Mizzou came to town, it would be crowded. "

KU football games are averaging roughly 40,000 people a game in the 2005 and 2006 seasons. Season ticket holders are at about 29,000.

We see Missouri once every two years.

Weak arguments.

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getserious 7 years, 4 months ago

If this were a true "business" decision then the University would give the season ticket holder the "option" to not purchase the Arrowhead game. Not gonna happen. They make you buy it whether or not you want to.

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Crossfire 6 years, 11 months ago

Anybody notice the date on this B/S.

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Warren6032 6 years, 11 months ago

Norm Stewart (ex-Mizzou basketball coach) had a policy of not spending a dime in the state of Kansas. He and his team stayed in KCMO until game day, and bussed to Lawrence. I respect his decision. But why do Kansas season ticket holders have to travel to Missouri and spend our money, in Missouri, to watch a game that we paid for? Just something to think about.

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