The Big Business of Football

It’s no secret that college football is big business. The student-athletes aren’t paid a salary, but everyone else profits. Tickets, concessions, merchandise and more: If you can slap a logo on it, someone can sell it. It’s a simple formula. Victories equal money — and lots of it. The more a team wins, the more people benefit. A successful college football team can breathe millions of dollars into the local economy each weekend.

The Only Game in Town In Tallahassee, college football is a major player in the local economy By Lee Gordon Originally published in the Dec 2010/Jan 2011 issue of 850 Business Magazine

 

It’s no secret that college football is big business. The student-athletes aren’t paid a salary, but everyone else profits. Tickets, concessions, merchandise and more: If you can slap a logo on it, someone can sell it.

It’s a simple formula. Victories equal money — and lots of it. The more a team wins, the more people benefit. A successful college football team can breathe millions of dollars into the local economy each weekend.

That formula has a proven track record in Tallahassee. When Florida State University and Florida A&M University are winning football games, everyone profits. The stadium is packed, hotels are sold out and restaurants are overflowing.

“Whenever there’s a game day, whenever you keep people in town, people feel it,” said Tallahassee Chamber of Commerce CEO Sue Dick.

People were certainly feeling it in the late 1990s. FSU football was a national powerhouse and FAMU was a perennial power in what used to be known as Division 1-AA. As recently as 2004, an FSU-Miami football weekend in Tallahassee could bring in as much as $10 million to the Capital City. Fans drove hundreds of miles and stayed multiple nights — a beautiful sight for area business owners.

But the past decade has been tough on everyone. The Seminoles and Rattlers have struggled on the field, and that has had a trickle-down effect on the local economy. The unemployment rate is up and the economy is in shambles — a lethal combination leading to empty seats, empty restaurants and a slew of hotel vacancies.

“The last couple of years, the ticket sales haven’t been as good because the team isn’t winning and we are in the recession,” said Mark Bonn, the Robert H. Dedman Professor of Service Management in FSU’s Dedman School of Hospitality. “That’s 95 percent of the explanation. People aren’t spending their discretionary funds for specific games. It’s a national trend — times are tough.”

Added the Chamber’s Sue Dick: “What we’ve seen the past couple years was impacted by the economy and the performance of the teams. We’re seeing a spin with the transition of the (FSU) program with (new head football coach) Jimbo Fisher.”

Selling the college football experience

Fisher alone can’t bring the economy back to where it once was. Winning football games will help. But there are also factors that play a role. The time of the game is a major factor as to whether fans show up. A noon kickoff against a lower ranked team isn’t attractive to a family driving to Tallahassee from around the state. Three of FSU’s first four home games in 2010 were noon kickoffs and the September 25 game against Wake Forest was the lowest attended game (61,647) since 1992.

“We as an organization are committed to winning and we’re doing everything that we can to ensure that,” said Jason Dennard, FSU’s assistant athletic director. “But part of the success that we are trying to accomplish depends upon people coming, and being part of the program, coming to the games and, as the commercial and the campaign says, is committed to being there.”

But how much money is spent each weekend is also dependent on the opponent. A Florida State-Miami weekend stands to make millicapital-sausageons more than a Florida State-Samford weekend. (Unfortunately for local business, this year’s Miami game was played in South Florida.) The same can be said across town at FAMU, where Homecoming weekend is a major moneymaker for the city.

FSU’s College of Business and Dedman School of Hospitality partnered with Visit Tallahassee in 2008 to break down the numbers. Before the recession, an average FSU home football weekend could bring upwards of $5 million to the Tallahassee area. The first game of 2010 brought in about half of that. The same can be said at FAMU, where in 2005 Homecoming weekend brought in about $2.5 million. Now, an average home football weekend brings in close to $1 million.

“There are a couple of things that happened,” Bonn said. “Where is the team coming from that we are hosting? If it’s Boston College or someplace like Utah, I just don’t know what the draw is going to be from that geographical destination. Depends on where the team is that we are playing, and is it a big rivalry or a drive market?

“Clemson is a five-hour drive, maybe,” he said. “That’s doable. You expect them to come down in big numbers, and you could go back the same night. But when they do stay, they spend money.”

Both Florida State and FAMU try to work together so that both teams aren’t playing home games on the same Saturday. It has happened in the past, but it’s not commonplace. That synergy between the two schools helps to create a buzz every weekend in Tallahassee and ensure that there will almost always be a home football game every Saturday from September through November.

“There’s been an effort not to have so much overlap between FSU and FAMU,” Dick said. “Having the two universities working well together benefits the community because there aren’t two games on the same day.”

A new era of football and business in Tallahassee

Hotel Duval opened its doors in the fall of 2009. A trendy, upscale hotel in the shadows of downtown Tallahassee, the hotel has 117 rooms and houses Shula’s Steakhouse, as well as the Level 8 Lounge on the top floor. Because of its location, newness, and ability to attract out-of-town customers, the hotel has been thriving this football season. According to general manager Marc Bauer, one good weekend could bring in close to $100,000 for the hotel.

“We opened at the middle or latter part of football last year,” Bauer said. “I was interested to see how it would transpire. For us, we were sold out for many of the home football games in advance. A lot of it has to do with (being) the new guy in town and our location (in relation) to the stadium. It’s obviously big business for us. It’s the engine in the fall that drives us and 250 to 300 covers at Shula’s and enormous nights at Level 8.”

Area hotels have also become creative in order to attract visitors. A few years ago, most Tallahassee hotels required a two- to three-night minimum stay for football weekends. But when the economy began to slide, the food and lodging industries had to think outside the box. They also had to do more than just offer up a bed to draw people to town.

“People want value, so if you can package a game-day ticket and discounted hotel, it’s great,” Bonn said. “Anything you can do to show value added. Bundling and packaging is very important.”

The Chamber of Commerce also began marketing college football in Tallahassee as a “Gamecation.” Come to the game, but enjoy the city and everything in it, is the idea behind it. Spend money at restaurants, go to the mall, stay for a couple of nights in a hotel and feed the local economy with out-of-town dollars.

“FSU did some marketing at The Villages (north of Orlando),” Dick said. “‘Come up to the game — we’ll bring you up here, you spend time and money. If you don’t want to spend the night, it’s OK.’ (They’ve) been creative in packaging ideas and bringing people into town who wouldn’t have (come before).”

A home football game is not just a recruiting tool for Jimbo Fisher, Joe Taylor, Leonard Hamilton and the other coaches on Tallahassee’s two university campuses. A lot of business is done around football, and a football weekend is a chance for the Chamber and other business leaders to recruit outside money and outside business into the Capital City. Some arrive as early as Thursday for a Saturday football game to experience the ambience of a college football weekend in Tallahassee.

“Look at the skyboxes,” Dick said. “People come to town and use football games as a way to entertain. Whereas other communities go to the Dolphins or the Heat or the Jaguars game, our businesses use (the college games) for client development. It’s a sales tool for our community.”

Added Bonn: “Visitors are here having lunch at the club getting ready for the game. They are tying business in with their travel. It’s an important part of our community, even when we’re not winning. It makes people excited to see that it’s a viable part of the community.”

Football Weekends and Legislature: Tallahassee’s Lifeblood

$10–15 million: 2004 FSU vs. Miami

$2.5 million: 2010 FSU vs. Samford

$2–2.5 million: 2005 FAMU Homecoming

$1 million: 2010 FAMU regular season game

$1 million +: Average week of legislative session in Tallahassee

$500,000: Amount of revenue lost per week for restaurants affected by the legislative gift ban

Source: Mark Bonn, FSU’s Robert H. Dedman Professor of Service Management in the Dedman School of Hospitality, in partnership with Visit Tallahassee.

 

CORRIDOR BY THE NUMBERS

 

$5 million: The approximate amount an average FSU home football weekend could bring into the local economy before the recession. The first game of 2010 brought half that. In 2005, FAMU’s homecoming game brought $2.5 million to local businesses. Now, the average is $1 million.

Source: FSU and Visit Tallahassee