Using data compiled by the Convention, Sports and Leisure group (CSL) the consulting firm hired by CSU to do a feasibility study of an on-campus stadium, Maxcy pointed out that under the most optimistic economic conditions the on-campus stadium would generate a possible $90 million profit over 30 years. Under the most pessimistic conditions, the stadium could lose upward of $218 million over 30 years.
Looking at nine different scenarios outlined with revenue numbers generated by CSU’s hired consulting firm, the on-campus stadium would lose money under seven of those scenarios.
Maxcy was brought to CSU by Save Our Stadium Hughes, an organization that opposes the construction of CSU’s proposed on-campus stadium.
“Obviously [bias] is a concern,” said SOSH organizer Bob Vangermeersch on bringing out a presenter that was paid by SOSH for his analysis. “Everything from the university is so one- sided and all he did is use the numbers generated from their study.”
Maxcy has researched sports economics for more than 15 years and is also the vice president of the international association of sports economists.
Data compiled by CSL shows three tiers of possible revenue streams should an on-campus stadium be built. The revenue streams include money generated from ticket sales, donations, parking, advertising, naming rights and a facility development fee.
- Under the low-case scenario, grand total of all revenue generated would be approximately $12,832,000 in the first year of operation. This is a 119 percent increase, or double, over the last available year that revenue was generated at Hughes Stadium –– $5,865,082 in 2010 to 2011.
- The base scenario forecasts $18,186,000 in revenue to be generated in the first year of operation, an increase of 210 percent, or triple the revenue from 2010 to 2011.
- On the high end, revenue is calculated to quadruple to 342 percent to a total of approximately $25,948,000.
The data relies on “extremely optimistic” increases in premium seating and advertising revenue as well, Maxcy said. Under the base scenario, premium seating would have to increase 624 percent from $387,475 in 2010 to 2011 to $2,028,525 during the first year of operation of an on-campus stadium.
Vangermeersch said that those numbers, especially revenue generated from ticket sales, are artificially inflated.
“Some of the numbers from Hughes stadium were tickets that were part of sponsorship packages, so they’re carrying those over to the new on-campus stadium and using them as a way to forecast attendance,” Vangermeersch said.
The research firm CSL foresees a 22 percent attendance increase the first year followed by a four percent increase in the subsequent four years. According to Maxcy, this is an “exaggerated assumption.”
Based on analysis of other stadium projects, the attendance boost usually occurs only in the first year during the “honeymoon” phase.
Most problematic, Maxcy said, is a survey done by the firm asking potential ticket buyers whether or not they would purchase tickets at the new stadium. The survey results were used to determine future attendance and revenue at the on-campus stadium.
“As an economist, we don’t like survey data,” Maxcy said. “We like hard data on how people are spending money.”
Only 9.4 percent of surveys were returned and many of those are assumed to be people with a high interest in CSU football.
Under the hypothetical scenario of whether or not they would buy tickets, respondents might be more inclined to say “yes” even if they may not actually purchase tickets.
He added that in two situations on other campuses where an on-campus stadium was built, both at the University of Akron and the University of Minnesota, neither one came close to matching even the lowest attendance or revenue increases predicted by CSU’s hired firm should the university move forward with its own on-campus stadium.
There are also “spillover” costs like traffic, public safety, congestion parking and environmental concerns including trash and litter removal, according to Maxcy. Citizens may also chose to avoid the downtown area altogether on game day, meaning area businesses might lose money.
“New stadiums are not allowing cities to pave their streets with gold,” Maxcy said. Quite the contrary, the last 20 years of extensive research has shown “the myth is slowly being debunked” that bringing a stadium to an area has a positive economic impact.
There are some benefits that CSU could see with an on-campus stadium,
“It’s not fair to completely focus on the negatives,” Maxcy said.
If the university was to move into an elite conference, broadcast revenue could increase five to 10 times greater than what it is now. Along with that would come more exposure and advertising dollars.
Fort Collins resident Liz Preussner believes the university hasn’t done an accurate cost benefit analysis of an on-campus stadium. Bringing Maxcy to speak allows a more accurate picture of possible financial pitfalls to be looked at.
“This should have been from the beginning,” Preussner said. “Of course the people that did the feasibility study would say ‘let’s do it’. They have a lot to gain, while this person [ Maxcy] doesn’t have anything to gain.”
Senior Reporter Austin Briggs can be reached at firstname.lastname@example.org.