Nebraska's Financial Health
Photo Credit: John S. Peterson

Nebraska’s Financial Health, and Its Impact on the Local Economy

April 28, 2020

In 2014, the Nebraska Bureau of Business Research was tasked with studying the economic impact Husker athletics has on the local economy of the Lincoln metro area and the greater state of Nebraska. Its findings might help to underscore the impact a lost or altered college football season might have on the university and the surrounding community.

A seven-game home schedule during the 2013-14 season and a spring game with more than 60,000 fans in attendance brought an estimated $42.9 million in revenue from fan spending to just the Lincoln metro area. All things equal today, adjusting for inflation would bring that estimation to around $47 million in 2020.

Add in the revenue Nebraska athletics brings in from ticket sales to home football games, revenue from things like merchandise and concession sales in-stadium, and revenue from royalties, ads and sponsorships, an altered football season, or a season played without fans, could have an impact as large as nine figures.

Nebraska athletics as a whole posted a profit margin of nearly $12 million for fiscal 2019, according to reports sent from the university to the NCAA. Football was much better off, with a reported profit margin of $59.7 million.

Athletic Director Bill Moos told the Lincoln Journal-Star several weeks ago the department was “comfortable,” but no one will be immune from hardship should those profit margins start taking hits.

A USA Today report revealed that in total at least $4.1 billion in fiscal-year revenue was at stake for athletics departments at the 50-plus public schools in the Power Five conferences, which averaged out to around $78 million per school.

Football alone at Nebraska generated $96.1 million in revenue.

Ticket sales account for a little under one-third of that.

 

Working in NU’s favor is the fact the department is debt-free. On average, Big Ten conference athletic departments have $11.8 million in debt. The FBS median is lower, at $4.6 million, but Nebraska is one of a select few who live completely debt-free. The Huskers have been since fiscal 2015. Amongst its peers at the Power Five level, Nebraska is the only public university that can make that claim, according to the Knight Commission’s CAFI database.

Even though Nebraska Chancellor Ronnie Green has told university leadership he expects to hold in-person classes in the fall, and power brokers in college football say holding games without fans in attendance would seriously alter the fabric of college football, a season with empty stadiums remains very much on the table.

Should that potential reality come to pass, local Lincoln businesses might take serious hits along with the university. One restaurant suggested, “it would be bad.” (Hail Varsity will have more on that side in the coming days.)

A poll of over 400 Husker fans on Twitter, though admittedly not a representative enough sample of the whole, showed at least a noteworthy gap in responses. When posed with a situation where bars and restaurants are open, but fans are barred from games, roughly 71% of responses said they would stay at home for a football Saturday instead of watching from downtown.

One person said “I’m currently redoing my mancave,” and that they “may never go to a game again.”

What’s interesting is the spending habits of a fan after they’ve attended a game.

The 2014 study is the most recent scholarly data on the dollars-and-cents impact the Huskers have on the metro area, but one of the authors of the study, Dr. Eric Thompson, said he wouldn’t expect things to be too drastically different if conducted today.

Exactly how much change would be speculation, but the addition of Scott Frost as head coach would likely not drastically alter things like fan spending after the fact, according to Thompson. The study also only estimates fans who attended a home game and then went to a retail or hospitality business after the fact; people traveling to Lincoln but not to the game were excluded.

  Per fan from outside metro Total (544,000 fans) Per fan from metro Total (245,000) All fans (789,000)
Food $23.36 $12.7 M $21.08 $5.2 M $17.9 M
Shopping $9.81 $5.3 M $4.00 $1.0 M $6.3 M
Transport $18.00 $9.8 M $8.38 $2.1 M $11.8 M
Recreation $4.12 $2.2 M $3.41 $0.8 M $3.1 M
Lodging $12.11 $6.6 M $1.70 $0.4 M $7.0 M
Misc. $1.59 $0.9 M $1.13 $0.3 M $1.1 M
Gross Total $68.99 $37.5 M $39.70 $9.7 M $47.3 M
Adj. for concessions   – $3.0 M   – $1.4 M – $4.4 M
Total   $34.5 M   $8.3 M $42.9 M

Spending; Source: BBR calculations

According to Thompson’s findings, Nebraska athletics, on the whole, generated $245.5 million in output to just the Lincoln metro area for fiscal 2014. It supplied $87.0 million in worker income and 3,420 jobs, of which a quarter were event staff, concession staff and other “on-call temporary jobs.” In other words, staffers who might be deemed non-essential personnel in the event stadium access is restricted. There was also another $936,000 in direct sales tax revenue for the city of Lincoln.

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