The Return of College Football

Alexa Klotz

Mrs. Straub

Economics

7 September, 2014

The Return of College Football

Fall is the start of many changes here in the United States. Leaves change their color, the temperature drops, seasons change, and everyone anticipates one thing; the start of the college football season. Year after year people come together to celebrate their favorite college football teams. This means those die hard fans traveling all over the country to watch their team's progress throughout the year, and surrounding businesses bringing in lots of money. College football helps the economy out tremendously with bringing up the business of local hotels, restaurants, and shops, while also selling gear and tickets to fans.

These fans are constantly having to deal with opportunity cost when deciding to go to games. Students give up studying for exams in order to go to these games, while parents may be giving up the chance to either be working or spending quality time with their children. While they may be missing out on these other things, it is indeed a plus for the economy for them to be attending these games. According to economist.com, college football generated 2.4 billion dollars in the 2012-2013 season. Tickets to games are a huge resource that are scarce. People are always wanting seats to that big game, but that doesn’t mean they are always going to get them.

Figure One: Expenses and revenue of college football teams

The most notable thing to take away from this chart is that Alabama spends the most on its football program for any university. But that investment has paid off with Alabama winning 3 championships in the past 5 years. Although the team spends the most on their program, they do not bring in the most revenue. The University of Texas made the most revenue with over $103 million dollars. Collegiate Licensing Company stated that Texas was the top selling institution for CLC licensed products for the eighth year in a row. Michigan also makes more revenue than Alabama, but sold less merchandise than Alabama. So what was it that put Michigan above the Roll Tide? Michigan receives royalties from the Big Ten Network. What’s most interesting though is that Boise State has been able to make a higher net income than larger schools such as Northwestern and Louisville, while investing a way smaller chunk of money into their program. This just shows that some teams earn economic success by spending large amounts of money, while other teams develop licensing contracts, and some spend reasonable amounts of money and still generate good feedback.

College football doesn’t just bring people together to cheer on their favorite teams, but it really does boost up the economy. These teams generate a lot of money that will not only help out their school, but also their surrounding community when traveling fan bases buy merchandise, food and book hotels. College football is more than just touchdowns and celebration dances; it’s about people with differences coming together to build a better economy.

Figure Two: Breakdown of Revenue by Team

Works Cited

"The Economics of College Football: A Look At The Top-25 Teams' Revenues And Expenses." Forbes. Forbes Magazine, n.d. Web. 8 Sept. 2014. <http://www.forbes.com/sites/aliciajessop/2013/08/31/the-economics-of-college-football-a-look-at-the-top-25-teams-revenues-and-expenses/>.

"ncaa revenue." ESPN. ESPN Internet Ventures, n.d. Web. 7 Sept. 2014. <http://espn.go.com/>.

"Wildcat formation." The Economist. The Economist Newspaper, 8 Feb. 2014. Web. 8 Sept. 2014. <http://www.economist.com/news/united-states/21595967-why-college-football-players-want-unionise-wildcat-formation>.

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