How much is a fan worth to your program?

Good morning, and thanks for spending part of your day with Extra Points.

I’ll be back at my keyboard later this week, but in the meantime, we’ve got two last freelance pieces to deliver to your inboxes. Today’s, from Kyle McMillen, goes deep on the benefits economic impact analysis can bring to programs as they work to justify spending on and investment in athletics. Kyle’s a co-founder of the Parker Strategy Group, a consulting firm that focuses on economic impact reporting, and he uses the Extra Points Library to help him model the kind of financial impact a strong investment in sports can bring to a university community and the surrounding area. I’ll let him tell you more …

by Kyle McMillen

The House settlement didn't just change the way athletic departments pay their athletes; it changed the conversation athletic directors must be ready to have. Before last year, a university official might’ve asked, “Are we winning enough?” Now, the question is, “Can you prove winning is worth it?”

That's harder to answer, and doing so requires more than just pointing at a trophy case or conference standings.

The state of flux in college sports is nowhere near over. In the face of conference realignment, NIL deals, the transfer portal, gambling and the enrollment cliff, among other challenges, many programs are wondering how they will continue to strive for excellence. And that begs the question: Why keep spending so much money — potentially more money than ever before — on athletics? 

To give a good answer, athletics administrators need data — specifically, the kind of rigorous, defensible economic analysis that appeals to chancellors, state legislators and donors. Economic impact reporting has long helped universities and other institutions quantify what they mean to the surrounding economy. In the post-House settlement era, it may be one of the most valuable tools an athletic director can bring into a budget meeting.

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I’m a cofounder, along with Nicole Parker, of Parker Strategy Group, a consulting firm that specializes in economic impact reporting. With more than 600 studies completed, our firm has helped colleges and universities, Fortune 500 companies and nonprofits quantify their impact on the broader economy — and I think our work has never been more applicable to college sports.