Sunday, April 1, 2007

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

Economist's analysis confirms fears of area business owners


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.

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.

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.

Audio clip

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

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."


90rockchalk 11 years 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.

sevenyearhawk 11 years ago

Again, I contend that if the program gets better in the long run - then the revenue that is lost from that one game will be made up when the attendance is better at the other home games ...

it would also help if the football team started scheduling some bigger names in the non-conference portion of the season.

Why not take a shot and sign some home and home deals with some other emerging BCS programs - instead of every directional school in Louisiana!

William James 11 years ago

Exactly, sevenyearhawk. The problem is not that KU only has 7 games at Memorial Stadium this year instead of 8. The problem is that one of those games is Florida International and another one is South Central Louisiana(or whatever). Why not replace one of those games with a school that most Americans are aware that they have a football program. Like Iowa or Colorado State or even one of the military academies. Im sure that would close the gap quite a bit and maybe we could start getting some articles about football. By the way, Im sure these businesses are making a lot more revenue now on gameday than they were during the Bob Frederick, Terry Allen era.

William James 11 years ago

These guys make it sound like The Great Depression. Oh, what tough times we live in.

sevenyearhawk 11 years ago

fabio -

that's brilliant!

why not play one of the military academies!

that's an almost certain draw - especially it if is Army with Ft Leavenworth and Fort Riley so close!!!

/gets ready to write an e-mail to Lew ... //my brother-in-law is an Army captain and West Point grad, he's in the Middle East right now - his FOURTH trip. Good thing he drives a tank! :D

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