UA Construction Drives Economy

Athletic director Jeff Long believes in a three-part recipe when it comes to attracting championship-level student-athletes to the University of Arkansas.

Top-shelf coaches are a must, as is a strong academic reputation, Long said. And the third ingredient?

“We have to have something to draw people,” Long said of the largely out-of-state recruiting base most UA coaches use to fill their rosters.

That something is facilities, as in $164.8 million worth from 2002 to 2011, and another $40 million in 2012. Add to that athletic department construction projections ranging from $212.3 million to $264.9 million over the next two decades, and the UA’s commitment to its sports teams is crystal clear.

Perhaps less obvious to some, yet equally undeniable, is another fact: The UA athletic department’s construction activity is one of Northwest Arkansas’ key economic drivers.

In a UA study done last year by the Center for Business and Economic Research at the Sam M. Walton College of Business, it was estimated the total economic impact of athletic department construction from 2002 to 2011 was $288.7 million. In 2012 alone, it was estimated to be $64.5 million.

All of it adds up to a major chunk of the area’s entertainment and leisure and hospitality industries.

“If the athletic department disappeared, we’d lose a great deal of our leisure and hospitality industry in the region,” CBER director Kathy Deck wrote in an email response to questions about the study. “Restaurants and hotels simply wouldn’t survive.

“And, without those amenities — as well as the athletics themselves! — other people considering moving or staying in the region would find fewer amenities to attract them.

“It would be a hit to the region’s identity in a way that losing hundreds of jobs in almost any other sector wouldn’t be.”

 

Study Session

Long said reading economic impact studies from other athletic departments originally piqued his interest in having one done at the UA. It was after working as part of the Northwest Arkansas Council, however, that he finally felt compelled to approach Deck.

“I learned far more about this region, what drives the economy here, the employment opportunities, the growth that’s going on in this region in terms of population,” Long said of his time working with the council.

“I’m always a competitive sort, so I started thinking, ‘Well, what piece of that are we? What piece of that is the university, and what part of that is intercollegiate athletics?’”

Thus, Deck and research assistant Mervin Jebaraj went to work. To generate an economic estimate for the athletic department’s construction activity, they used IMPLAN.

IMPLAN, according to the study, “employs an input-output approach to evaluate the economic impact of construction activity in the state of Arkansas.

“The basic data sources for the current edition of the IMPLAN database and the model used in this study are the Input Output Accounts of the United States, developed by the U.S. Department of Commerce, Bureau of Economic Analysis, and county income and employment data published by BEA and the Bureau of Labor Statistics.

“IMPLAN uses a 525-sector input/output model to measure the effects of three types of impacts: direct, indirect and induced.”

While direct construction jobs are the obvious ones, Deck explained indirect and induced jobs via email.

“An indirect job is a ‘supply chain’ job,” she wrote. “That is, it is a job created at one of the businesses that UA athletics purchases from. It could be at a local printing company or a local equipment supplier.

“An induced job is one that is created because of the individual salaries from direct and indirect jobs in the area. So, examples might be at a local grocery store or movie theater … or anything else that people buy.”

The model also generates a multiplier, which is the ratio of total impact to direct impact. The multiplier associated with the UA study is 1.81, which means every dollar in athletic department expenditures generated $1.81 in economic activity.

“I’ve seen some studies that used a much higher multiplier, which makes their impact look bigger, but I trust what Kathy has done,” Long said. “I think hers is a very real number, and it doesn’t overblow the impact.”

 

Long View

Long has been viewed — and not always favorably — as more of a modern-day CEO than an old-school AD. He sees himself as neither, but understands the evolution of college athletics into big-time business.

“I see myself more, to be honest with you, as an educator, a teacher,” Long said, “but you can’t be a Division I athletic director at this level and not have business acumen, have an eye to business, and lean on other businesspeople for advice and counsel. At a $100 million annual revenue, we’re big business in this state.

“I don’t know what the numbers are, but I’m not sure there are a hundred companies in the state that generate that kind of revenue.”

Long also understands the vast majority of Razorbacks fans are far more concerned with wins and losses than they are with balance sheets.

“Most fans are looking for this as an escape from business, so they’re thinking of it in terms of that,” he said, “but I do think it has an impact on those who see it and understand it, and see that when they contribute, when they buy a ticket, when they make a contribution to the Razorback Foundation, they are giving more than to just this entity.

“It does play out in Northwest Arkansas, as well as throughout the state, in terms of economic impact.”

Long came to the UA in the fall of 2007 as an adviser to then-chancellor John White, and took over as athletic director on Jan. 1, 2008. He said he knew from the get-go facilities construction would be a priority.

“Some of the vision started before I got here,” Long said. “It started when I came here to interview for the job, just looking at what was here.

“Coach [Frank] Broyles has done a wonderful job, but there were some pieces missing and I thought that we could come in and add those pieces, just build upon what Coach had built.”

From 2008 to 2011, 16 athletic department construction projects were completed at a total cost of more than $18.9 million. Ongoing is a football center that will cost about $40 million.

Even Deck expressed surprise at “how important the construction impacts were to the Northwest Arkansas region at a time when there wasn’t much going on for the big construction companies in the area.”

Those projects, plus the ones that are part of the athletic department’s 20-year construction master plan, had a profound effect on Long, too. His recipe for success, it seems, came with a dash of unforeseen kick — a trickle-down effect on Northwest Arkansas’ economy.

“I get chills talking about it, but when I saw that impact … that really gripped me, surprised me,” Long said.