The biggest money-making event in college sports began this week with millions of fans around the nation filling out their NCAA men’s basketball tournament brackets and then tuning in to watch the thrills and spills of March Madness.
A year after the Final Four was played here in San Antonio at the Alamodome and received rave reviews, the event has moved on to Minneapolis with a promised return in 2025. Until then, the biggest college sporting event in town each year reverts back to the Valero Alamo Bowl, the college football postseason game contested here each year in late December or early January.
A recent analysis of the 2018 Alamo Bowl showed it’s doing well when it comes to generating revenue, too.
The 2018 Alamo Bowl was the most successful in the game’s 26-year history when it comes to economic impact on San Antonio, according to a company contracted to estimate spending related to the game.
The analysis conducted by Houston-based Economic Analytics Consulting estimated 41,578 out-of-state visitors came to San Antonio to see Washington State defeat Iowa State, creating a total economic impact of $52.9 million. Both figures are new records for the Alamo Bowl, which was first played in 1993.
The company based its analysis on surveys conducted at the game. The final report is based on 374 usable surveys covering 1,474 attendees. The data was then scaled up to estimate what all out-of-town visitors spent collectively.
Chris Johnson, principal at EAC, said people were asked where they traveled from, where they stayed while in town, how long they stayed, and where they spent money, among other questions.
The report covered visitors to the area rather than attendees from the area because it was assumed locals would have found other forms of entertainment on which to spend money. Johnson said a statistically valid sample generally requires only 200-400 to be presented in such surveys.
“I think what we put together is a reasonable and reliable estimate,” Johnson said. “If you’re looking for perfection in the sense that you’re able to talk to every person and have them have perfect recall on their spending and they’re willing to provide you answers, that would be wonderful. But the costs of that would be incredibly high, and, of course, people just won’t talk to you. It’s not a realistic option that is on the table.”
The announced attendance of 60,675 and the 6.1 million viewers who watched the game on ESPN ranked No. 1 and 2 respectively for non-College Football Championship bowl games last season.
The analysis found the average length of stay for the 2018 game was 3.4 days and produced $4.3 million in tax revenues for the City.
“When you take a step back and look at the bowl when it was first established in 1993, Christmas and New Year’s used to be one of the slowest tourism weeks of the year, if not the slowest,” said Derrick Fox, Alamo Bowl president and CEO, “and now we’ve turned it into one of the more robust weeks of the year.”
The Alamo Bowl has a contract with the Pac-12 and Big 12 Conferences to select teams from those conferences based on where they finish in the conference standings and national rankings. In 2018, the bowl featured two teams from cold-weather states with fan bases that generally are willing to travel to see their teams play.
When the Alamo Bowl invites a Texas team or a team from a nearby state such as Oklahoma, San Antonio might benefit from larger attendance but lose out when it comes to fans making longer stays in San Antonio, Fox said.
Fox said conducting an economic impact study helps provide a clear picture of how the bowl game is performing and benefiting the community. EAC also conducted a study of the 2017 game that showed an economic impact of $38.3 million, with 37,616 out-of-town visitors, for the game between Stanford and Texas Christian University.
In addition to the game’s economic impact, the Alamo Bowl has contributed more than $1 million in scholarship money to San Antonio-area high school and college students, Fox said.
The bowl game also invested $6 million in technology upgrades at the Alamodome in time for the 2018 NCAA Men’s Final Four.
As a mathematician and college football fan who has traveled to several bowl games myself, I sometimes wonder exactly about these economic impact surveys. Based on the $52.9 million dollars generated by 41,578 out-of-state visitors to the bowl game that amounts to $1272.30 spent by each person. That’s the average so some fans spent less and some spent more.
I was at this year’s Sugar Bowl to see my team play in that game. I went with two family members for 3 nights/4 days in New Orleans during New Years. Hotels in New Orleans are traditionally expensive but especially during New Years. We spent liberally while there. Yet we didn’t come close to generating the $1272.30/person at the Sugar Bowl that the Alamo Bowl made. In fact, including the cost of game tickets, the three of us combined only spent $1500 in a city and bowl game that is more expensive than the Alamo Bowl.
Also consider that the ones spending more at a bowl game are the official members of each school’s traveling group (i.e. the players, coaches, band, cheerleaders, dance team, mascot, athletic department officials and school administration). But they are paying for the trip expenses using the money they earn from attending the bowl game. So it’s actually the Alamo Bowl who paid for those expenses. Yes, the Alamo Bowl uses sponsors to generate that money but the current named sponsor is Valero, a local company. So local money was used to pay for the bowl trip expenses of both schools so that portion shouldn’t be used in the calculations because it was money already in San Antonio.
Finally total money spent at chain hotels and restaurants should be adjusted when conducting economic impact studies. The only money that should be counted from hotels should be the payroll costs because that goes to local residents and the hotel occupancy taxes the city earned. The rest of the money the hotel makes will go to the chain which most likely has a headquarters located in another city so that money shouldn’t be counted. The same for chain restaurants, with the only money generated for locals coming from payroll and tips.
I’d be skeptical of an economic impact analysis paid for by the Alamo Bowl.
How much does the Alamo Bowl receive in subsidies from local government?
How much does Derrick Fox get paid?
Fox & the Alamo Bowl have an interest in touting as big an economic impact number as possible. Take the figures from the EAC study with a grain of salt. Oh, and don’t forget about the time Derrick Fox lied to Congress.