UM athletics and budget cuts - article

[EverettGriz]

I've even provided you studies to support the position that the dollars spent at football games are going to be spent in Montana whether or not there are games.

Well, yes, but that has nothing to do with the "velocity" of money, because that metric is time-dependent, and it is highly unlikely that the average person is going to spend that money in the same time period. Indeed, if they keep it in the bank, it reduces the velocity of the money, and the economy shrinks.

Using Missoula's retail sales as the base, the money spent on football (collegiate sports) is about 1.33% of the total. Is that "meaningful?" Well, per capita for Missoula, its about $263 per person, a larger amount than the median income US income increase over the past 8 years.

Missoula represents about 15% of the state's retail sales volume. The effect of the football games (and other sports) would impact the Missoula economy in terms of the "velocity" of money by increasing it from "6" -- the estimated current V/M in the US economy -- to about 6.1%. Is that huge? As a national multiplier, yes. On a state-wide basis, that would increase the V/M to just over 6.01%. Not much, but it is meatsureable. And it is a "plus." Add in the other sports in Montana and it has significance.

75, as I pointed out, the dollar volume spent is far too insignificant for the velocity of money to have any meaningful impact. Additionally, Montana's consumer consumption rate on a monthly basis is 95%, so the money almost certainly will be spent in that time period.

And yes, at the local (Missoula) level, the money spent on football is obviously significant. But that wasn't Barrett's point.

 

[UMGriz75]

75, as I pointed out, the dollar volume spent is far too insignificant for the velocity of money to have any meaningful impact. Additionally, Montana's consumer consumption rate on a monthly basis is 95%, so the money almost certainly will be spent in that time period.

And yes, at the local (Missoula) level, the money spent on football is obviously significant. But that wasn't Barrett's point.

All sorts of intriguing research questions. The 95% level does not likely represent the typical Griz household that attends games; it is certainly arguable that people that can afford that kind of time off, travel, tailgates, beer, whiskey, and floozies aren't the sweating masses living paycheck-to-paycheck.

Although I find only 0.1% increase in the V/M at the local level, that IS an increase and represents a certain significance because a V/M of 6 is itself historically low and representative of an extremely anemic economy in general. That is, that 0.1% is more important when the V/M is 6 -- businesses just hanging on -- than when the V/M is closer to the historical average of 8, when the economy is generally considered "healthy."

 

[PlayerRep]

There are several positive components for increased economic activity, not just velocity of money.

Besides velocity, there is the additional in-state spending by people in and out of Missoula. There is the spending that comes from out of state fans, as well as the opposing teams, occasionally tv crews, etc. There is the spending that occurs around the state from people who just watch the games, in bars or at parties. This one may or may not involve much incremental spending. There is the multiplier effect, which overlaps with velocity of spending. There are the capital expenditures for building athletic facilities, i.e. construction and maintenance. There is the spending of out of state athletes, including their scholarships that come from either the GSA or the State, but then are paid to the university, increasing university tuition revenue.

The Nebraska study concludes that a decent amount of the in-state spending would go out of state, which is a point I made earlier. "Of course, some Lincoln area fans would spend money attending sporting events in Kansas City or Omaha or taking vacations. Survey results found that between 2% and 8% of Lincoln area fans would spend money outside of the area in this way, depending on the sport." My point is that some people would use their Griz/Cat game/tickets savings to watch sporting events out of state or take vacation out of state. This might include Denver, Mpls, Seattle, Spokane, Las Vegas, Mexico, Hawaii. Entertainment/travel budgets don't necessarily get spent locally or in-state.

The assertion that college athletics in MT doesn't increase economic activity in MT is neither credible nor supported by data.

 

[EverettGriz]

So, just so I'm clear: the primary direct impact comes from -- at best -- 8% of Griz fans who would spend money elsewhere.

Let's make a wild assumption and assume that each Griz fan spends $200 attending games (the actual dollar spent per fan is probably one quarter that number). Assume 6 home games. Let's also assume that the absolute maximum of 8% spend their money elsewhere. So the absolute BEST case would be: 25,0000 X 6 games X $200/game = $30,000,000. $30 million X .08 = $2.4 million.

Consumer spending in Montana is $39.5 billion a year.






Yeah, I think we're done here.

 

[PlayerRep]

So, just so I'm clear: the primary direct impact comes from -- at best -- 8% of Griz fans who would spend money elsewhere.

Let's make a wild assumption and assume that each Griz fan spends $200 attending games (the actual dollar spent per fan is probably one quarter that number). Assume 6 home games. Let's also assume that the absolute maximum of 8% spend their money elsewhere. So the absolute BEST case would be: 25,0000 X 6 games X $200/game = $30,000,000. $30 million X .08 = $2.4 million.

Consumer spending in Montana is $39.5 billion a year.

Yeah, I think we're done here.

No, I don't agree. There is positive impact from multiple sources. MT Griz fan spending, non-MT Griz fan spending, opposing team/fan/other spending, velocity, multiplier, building/improvements for athletics, tuition from out of staters, people who choose to move to Missoula/Bozeman due to desirability of the location including athletics, companies that choose to come to Montana due to those same things, etc.

Again, you're just a goal post changer. I don't recall that Barrett said anything about the magnitude of the spending. He said that was no increase in the state, as athletic spending just moved spending around in the state. That statement, which you defended, is not accurate.

 

[Buttegrizzle]

Not all Griz game attendees are from Montana. While it may not be blip on the states' overall economy I guarantee there are businesses in Missoula that will disappear if Griz athletics fall off. Missoula needs to collectively realize your pandering Rep Barrett is just another bandwagon anti-business politician ready to kill every economically viable golden goose that comes along. Mining, timber, coal, oil, transportation and now Griz games? I for one won't be traveling to Missoula to watch the math club lecture series.

I chose UM as a high school senior because I saw Derrick Pope break a backboard. Not a really impressive criteria for academic selection but still. UM got me to pony up for two degrees because of sports.

Kind of sad you chose your academic future based on a dunk...I agree though athletics should be prioritized because they give the school exposure, I personally chose U of M because of the amazing campus, academic departments, people, tight knit community, and the awesome place that is Missoula.

Well, it was the basketball atmosphere more than the one dunk. But let's face it 1) does it matter where you go the first four years if you don't have a pre-determined major? 2 ) the atmosphere at Carroll, and a couple private colleges in Washington and Oregon I was considering were not as interesting. Plus, In-state tuition was pretty cheap. And to be fair, despite my rudderless entrance to UM I found things to get interested in, graduated twice and even got a job. So it worked out.

I'll be honest. My allegence to UM is much stronger in regards to the athletics than the academics. That is kind of sad maybe but I don't get as excited about contributing to a department that nearly lost accreditation while I was a grad student. Sorry. Just not committed that much. If a new weight room will bring in more 3-star recruits. Yep. I'll chip in. Athletics gives me entertainment and a source of pride, as well as being distraction from daily BS. It makes me happy (most of the time). It keeps me connected to the U. Take it away or reduce it to mediocrity and I've got no reason to send more money there.

 

[GrizLA]

face it. Without athletic programs recognized throughout the country, UM would be just another small liberal arts college that happens to be in the city of Missoula that would be little more than a large truck stop without it. For most out of state alumni, UM is a fond memory, but that would be all, if there were no successful programs. Since this administration chooses to largely ignore its distant grads, it is easy to forget them. Athletic success is vital to a small school like UM that exists in a state that refuses to fund its best known educational institution.

 

[PlayerRep]

face it. Without athletic programs recognized throughout the country, UM would be just another small liberal arts college that happens to be in the city of Missoula that would be little more than a large truck stop without it. For most out of state alumni, UM is a fond memory, but that would be all, if there were no successful programs. Since this administration chooses to largely ignore its distant grads, it is easy to forget them. Athletic success is vital to a small school like UM that exists in a state that refuses to fund its best known educational institution.

Good post. Good perspective.

 

[UMGriz75]

So, just so I'm clear: the primary direct impact comes from -- at best -- 8% of Griz fans who would spend money elsewhere.

Let's make a wild assumption and assume that each Griz fan spends $200 attending games (the actual dollar spent per fan is probably one quarter that number). Assume 6 home games. Let's also assume that the absolute maximum of 8% spend their money elsewhere. So the absolute BEST case would be: 25,0000 X 6 games X $200/game = $30,000,000. $30 million X .08 = $2.4 million.

Well, no, that's backwards. If "8% of Griz fans would spend their money elsewhere," then 92% of Griz fans wouldn't be spending their money "elsewhere" within the time frame measuring V/M. And that 92% would have to be counted as spending their money in such a fashion as to accelerate V/M.

If Montana's "GDP" is $39 Billion, and if the V/M is six, then the "money" in circulation at any given point in time is about $6.5 billion, and in Missoula, about $950 million. The amount estimated by UMBER is, then, about 3% of the total supply of money added to the supply on six weekends for the most part. Looking at it that way, the V/M increases from 6 to about 6.2%. It's not huge, but it is measurable, and it is significant. Economists would love to be able to jigger that result on purpose if they could. In the national economy, that would mean an additional $533 Billion of economic productivity. As the man said, "a billion here and a billion there and pretty soon you're talking real money!"

The caveat is that Montana's GDP includes sectors in which V/M is quite low (i.e. "mining"), and so fails to accurately measure consumer V/M which is correspondingly higher than the average. And as the consumer V/M is higher, the collegiate spending is commensurately more important. Perhaps there are numbers out there, I just can't find them today.

Money has to be "working" to generate positive results. It can't be sitting in the bank, it has to be buying goods and services. Most Griz fans, if they didn't spend the cash on game day, travel, overnights, etc, would not be likely to spend the cash "anyway" in a relevant time frame and in such a fashion to result in economic growth by increasing V/M.

Indeed, since much of the expenses are likely put on credit cards, and paid off in subsequent billings or months, the net aggregate of M1 is increased over what is actually available to the consumer as measured by M1. It's a neat trick, if a temporary expedient, for increasing V/M. The significance gets a little lost in the large numbers, but is of great significance to the economic sectors that directly benefit: hotels, bars, restaurants, UM bookstore, Athletic Department, Concessions, etc since the revenue is focused almost entirely on those local entities, and not distributed evenly throughout the economy (i.e. to "mining").

 

[EverettGriz]

So, just so I'm clear: the primary direct impact comes from -- at best -- 8% of Griz fans who would spend money elsewhere.

Let's make a wild assumption and assume that each Griz fan spends $200 attending games (the actual dollar spent per fan is probably one quarter that number). Assume 6 home games. Let's also assume that the absolute maximum of 8% spend their money elsewhere. So the absolute BEST case would be: 25,0000 X 6 games X $200/game = $30,000,000. $30 million X .08 = $2.4 million.

Well, no, that's backwards. If "8% of Griz fans would spend their money elsewhere," then 92% of Griz fans wouldn't be spending their money "elsewhere" within the time frame measuring V/M. And that 92% would have to be counted as spending their money in such a fashion as to accelerate V/M.

If Montana's "GDP" is $39 Billion, and if the V/M is six, then the "money" in circulation at any given point in time is about $6.5 billion, and in Missoula, about $950 million. The amount estimated by UMBER is, then, about 3% of the total supply of money added to the supply on six weekends for the most part. Looking at it that way, the V/M increases from 6 to about 6.2%. It's not huge, but it is measurable, and it is significant. Economists would love to be able to jigger that result on purpose if they could. In the national economy, that would mean an additional $533 Billion of economic productivity. As the man said, "a billion here and a billion there and pretty soon you're talking real money!"

The caveat is that Montana's GDP includes sectors in which V/M is quite low (i.e. "mining"), and so fails to accurately measure consumer V/M which is correspondingly higher than the average. And as the consumer V/M is higher, the collegiate spending is commensurately more important. Perhaps there are numbers out there, I just can't find them today.

Money has to be "working" to generate positive results. It can't be sitting in the bank, it has to be buying goods and services. Most Griz fans, if they didn't spend the cash on game day, travel, overnights, etc, would not be likely to spend the cash "anyway" in a relevant time frame and in such a fashion to result in economic growth by increasing V/M.

Indeed, since much of the expenses are likely put on credit cards, and paid off in subsequent billings or months, the net aggregate of M1 is increased over what is actually available to the consumer as measured by M1. It's a neat trick, if a temporary expedient, for increasing V/M. The significance gets a little lost in the large numbers, but is of great significance to the economic sectors that directly benefit: hotels, bars, restaurants, UM bookstore, Athletic Department, Concessions, etc since the revenue is focused almost entirely on those local entities, and not distributed evenly throughout the economy (i.e. to "mining").

75, you have to read (and try to make sense) of pr's posts for mine to make sense. It's not backward; it's correct. (note: didn't read past your first couple sentences)

 

[Buttegrizzle]

Politicians like Dick Barrett need to demonstrate some leadership and instead of whining hat in hand about cutting funding to higher education or athletics, how about go tell those highschool diploma republicans that run the place its not 1950 any more. We can't all make a living farming daddy's ranch. The state needs educated young people. Great societies fund education, the arts and the damn roads. Tell them to double down on athletics, and how about $100 million for a medical arts department while you are at it? God forbid they have to tap the Coal Trust fund. We can cut a mediocre university until it's even less, or invest in it.

 

[EverettGriz]

Politicians like Dick Barrett need to demonstrate some leadership and instead of whining hat in hand about cutting funding to higher education or athletics, how about go tell those highschool diploma republicans that run the place its not 1950 any more. We can't all make a living farming daddy's ranch. The state needs educated young people. Great societies fund education, the arts and the damn roads. Tell them to double down on athletics, and how about $100 million for a medical arts department while you are at it? God forbid they have to tap the Coal Trust fund. We can cut a mediocre university until it's even less, or invest in it.

Good post.

 

[indian-outlaw]

Politicians like Dick Barrett need to demonstrate some leadership and instead of whining hat in hand about cutting funding to higher education or athletics, how about go tell those highschool diploma republicans that run the place its not 1950 any more. We can't all make a living farming daddy's ranch. The state needs educated young people. Great societies fund education, the arts and the damn roads. Tell them to double down on athletics, and how about $100 million for a medical arts department while you are at it? God forbid they have to tap the Coal Trust fund. We can cut a mediocre university until it's even less, or invest in it.

Bravo.... :clap:

 

[indian-outlaw]

Politicians like Dick Barrett need to demonstrate some leadership and instead of whining hat in hand about cutting funding to higher education or athletics, how about go tell those highschool diploma republicans that run the place its not 1950 any more. We can't all make a living farming daddy's ranch. The state needs educated young people. Great societies fund education, the arts and the damn roads. Tell them to double down on athletics, and how about $100 million for a medical arts department while you are at it? God forbid they have to tap the Coal Trust fund. We can cut a mediocre university until it's even less, or invest in it.

Bravo.... :clap:

Spoken like a butte guy that has relatives that made their living in a hole in the ground.

 

[indian-outlaw]

Politicians like Dick Barrett need to demonstrate some leadership and instead of whining hat in hand about cutting funding to higher education or athletics, how about go tell those highschool diploma republicans that run the place its not 1950 any more. We can't all make a living farming daddy's ranch. The state needs educated young people. Great societies fund education, the arts and the damn roads. Tell them to double down on athletics, and how about $100 million for a medical arts department while you are at it? God forbid they have to tap the Coal Trust fund. We can cut a mediocre university until it's even less, or invest in it.

Bravo.... :clap: Spoken like a butte guy that has relatives that made their living in a hole in the ground.

 

[EverettGriz]

Tell us what you really think, IO.

 

[Grizzlies1982]

Politicians like Dick Barrett need to demonstrate some leadership and instead of whining hat in hand about cutting funding to higher education or athletics, how about go tell those highschool diploma republicans that run the place its not 1950 any more. We can't all make a living farming daddy's ranch. The state needs educated young people. Great societies fund education, the arts and the damn roads. Tell them to double down on athletics, and how about $100 million for a medical arts department while you are at it? God forbid they have to tap the Coal Trust fund. We can cut a mediocre university until it's even less, or invest in it.

No, spoken like you've been living in a hole in the ground.

Politicians like Barrett need to grow a pair and face the fact Montana has TOO MANY public institutions of higher learning. Consequently we are underfunding each of these multiple (and often redundant) schools.

Do we need a separate college of technology in every town with an existing unit? Did we need to add one in Helena too? Do we need to offer largely the same curriculum at each campus?

Bottom line there isn't too few state dollars going into higher ed. There is too many units in this system. As a result those dollars are inadequate to allow any unit to actually excel.

The Board of Regents holds the keys to determine the specifics yet legislators like Barrett hold the purse strings. He makes noise about lack of support to UM but sure as hell won't face the facts we have too many units splitting the pie into smaller and smaller slices without actually increasing the number of Montanans served.

 

[Buttegrizzle]

Won't argue about smaller slices of the same pie. But Barrett is a Missoula Rep. It figures he would maybe try to promote UM instead of groveling.

I have total support in eliminating redundancy where it makes sense, hence my Med school comment. 1982, you think UM should cut it's departments that might be redundant at smaller school an branch colleges?

 

[grizindabox]

Won't argue about smaller slices of the same pie. But Barrett is a Missoula Rep. It figures he would maybe try to promote UM instead of groveling.

I have total support in eliminating redundancy where it makes sense, hence my Med school comment. 1982, you think UM should cut it's departments that might be redundant at smaller school an branch colleges?

Actually I think his argument is get rid of more of the smaller schools and branch colleges....

 

[UMGriz75]

Politicians like Barrett need to grow a pair and face the fact Montana has TOO MANY public institutions of higher learning. Consequently we are underfunding each of these multiple (and often redundant) schools.

Wyoming has one unit of higher ed. Period.

Montana has seven units, 8 or 10 subunits, six or seven adjunct units and within all of those, duplication of major programs all across the board. Business Schools now at UM, Billings, and MSU. Why? Because. That's why. UM was supposed to be the "business" campus, until Billings wanted a program and then MSU. Billings now has an MBA program, and MSU is pushing for one. Politics, and the Regents can't say no.

Regents tried to push for consolidation, "assigning" the smaller campuses and Vo-Techs to either UM or MSU with the "wink wink" that the flagships would do what the Regents would not do -- consolidate campuses and facilities. It was an impressive piece of thinking.