Economic Impact of CSU Bakersfield's Move to Division I

A move by California State University, Bakersfield to NCAA Division I competition would generate some $6 million worth of economic impact on Bakersfield annually, according to a study by two CSUB economics professors.

Professors David Berri and Abbas Grammy, in their study, concluded that CSUB would experience increased attendance, and that fans of visiting teams visiting the community would spend thousands of dollars on food, accommodations and miscellaneous items.

Berri said that the fact that CSUB is a smaller university shouldn’t affect its ability to compete at the Division I level. “In essence, Division I basketball is the ultimate melting pot of large and small universities,” he said. “Those outside of Division I, though, are like children pressing their noses to the candy shop window. The sweet treats are in sight, but very much out of reach.”

The two professors investigated the financial feasibility of CSUB joining the Big West Conference, a conference that will have an opening soon as two members are leaving. In particular, they projected the revenues needed to support a Division I athletic program at CSUB and measured the economic impacts of this decision on the community.

They found the move to Division I is beneficial to CSUB in many ways. It would:

1. Support the university's Partnership for Excellence vision.
2. Improve the university's image in the community and academy.
3. Attract more and better student athletes supported by increased scholarships.
4. Generate greater enrollments for various academic programs.
5. Enhance the university's national, regional, and local exposure.
6. Foster closer ties to the university's alumni across the state and nation.
7. Enlarge financial contributions to the university.
8. Increase business in Bakersfield and Kern County

The highlights of the study are as follows:

1. With a modest conference winning percentage of 0.400, in the first year of Division I competition, Berri and Grammy expect basketball attendance to rise 12.5 percent from 2,400 to 2,700 per contest. They anticipate total attendance at all CSUB sporting event to increase from 54,500 to 62,800.
   
   
2. CSUB would need an extra $2.7 million to support a Division I athletic program. The needed additional funds would come from various sources:

   Institutional Support	$419,922
   Ticket Sales	$52,744
   Sponsorships & Memberships	$959,775
   Fundraising Events	$11,650
   Student Activities Fee	$1,200,000
   NCAA & Conference Distributions	$85,000
   Others	$4,050
   Total	$2,733,141

3. CSUB visitors would spend more than $869,000 annually in Kern County. They will generate additional revenues for various local businesses:

   Hotel Rooms	$272,349
   Retail Trade	$140,460
   Dining	$280,920
   Automotive	$70,230
   Miscellaneous	$105,345
   Total	$869,304

4. The additional $2.7 million of CSUB expenditure and $869,000 of visitors' spending are expected to generate $5.7 million annually of total economic benefit for Kern County. Knowing this information, the community would be willing to increase donations to the university to support this move.

   University’s Economic Impact	$4,810,328
   Visitors’ Economic Impact	$1,350,589
   Total Economic Impact	$6,160,918
   Total Economic Impact Retained Locally	$5,666,044

Berri and Grammy concluded the study with the following observations:

1. Attendance and wins are related in Division I basketball. If CSUB wins only 40 percent of its conference games, they predict attendance will exceed what the university currently observes in Division II.
   
   
2. They do not observe a large positive correlation between winning percentage and enrollments. "Smaller universities can be successful in Division I," they said.
   
   
3. "Our research demonstrates that the move to Division I will generate substantial economic benefits for Kern County. An additional $3.6 million of spending by the university and visitors is expected to generate $5.7 million annually of total economic benefit."
   
   
4. Community support will be needed to make a successful transition to Division I. "If we demonstrate to the community the economic benefits of this move, the request for additional donations can prove successful," they said.

Media Contact: Mike Stepanovich, 661/654-2456, mstepanovich@csub.edu