Sports economic impact
Source: Los Angeles Sports Council
Earlier this year city officials announced that Los Angeles would try to become the site for the 2024 Summer Olympics. But to win the right to host the city’s third Olympics, L.A. boosters must first convince members of the International Olympic Committee that the region has the venues, fan interest and capacity to stage large-scale events.
A team of M.B.A. students from the UCLA Anderson School of Management might help L.A.’s Olympic supporters make their case: A report the students recently produced cited revenue, attendance and employment figures that show that in 2012, sports had a $4.1 billion impact on the economy in Los Angeles and Orange counties.
"Nowhere else in the world are people more nuts about sports than in the L.A. area," said Guy Holzman, one of four co-authors and a June graduate from UCLA Anderson. Those working on the report included Shannon Marquardson, Alan Druckman and Jake Darby, all "sports fanatics," Holzman said.
The project was more than just an opportunity for sports fans to align their personal interests with their academic work. It’s also an example of the unique opportunities UCLA provides students to apply the knowledge they acquire in the classroom to the real world. The study was part of Anderson’s Applied Management Research (AMR) program, which is the capstone project for M.B.A. students.
Now in its 47th year, the AMR program has connected M.B.A. students with a diverse array of more than 3,000 Fortune 500 companies, nonprofits, microfinance institutions and start-ups that need assistance with data collection, problem solving, capacity building and other strategic business issues. Recent partners have included AEG Marketing, Los Angeles City Planning, Microsoft, Global Witness, the YWCA Santa Monica and other organizations around the world. It’s an opportunity for organizations to get the quality of professional consultants at a fraction of the cost.
UCLA basketball
Sports are a multibillion-dollar economic engine every year in the Los Angeles region.
"When an employer looks at your résumé, he wants to see you have the qualifications for a job," said Holzman, who is now working in Los Angeles as a consultant in mergers and acquisition. "A résumé that states that you’ve worked on such a unique project is something that catches the eye of whomever is reading it."
This year marked the eighth time since 1993 that UCLA Anderson has partnered with the Los Angeles Sports Council, which sponsored the project along with the Los Angeles Area Chamber of Commerce, to study how being home to a wide variety of major sports — from professional basketball, hockey and baseball to NASCAR to the L.A. Marathon to collegiate sports — affects the local economy.
"The Anderson teams consistently have been bright and motivated," said David Simon, president of the Los Angeles Sports Council. "It has been a pleasure to work with them." Although this year’s study was not specifically designed for the Olympics bid, Simon noted that this type of data could prove valuable when the city tries to draw any major event like the Olympics or Super Bowl.
Though they were all sports fans, Holzman noted that team members maintained their professional focus. "It’s sports-related, but it’s a lot of spreadsheets with lots of numbers," he said. "It’s a business like any other business."
Team members represented a smart mix of specialties and expertise. Druckman, who played field hockey, tennis and golf back home in England, had a background as a strategy consultant. Darby’s background was corporate finance, and Marquardson’s specialty is in data research.
The team identified 55 local sports organizations, venues and major annual events, ranging from professional franchises like the Los Angeles Dodgers to venues like Staples Center to recurring annual events like the L.A. Marathon to major universities like UCLA. Then they examined annual revenue, attendance figures and employment — sports generated nearly 4,000 full-time jobs in 2012.
Not all organizations wanted to share relevant data, Holzman said, although most did. For those that did not, the students had to dig for information online, check publications like Forbes and examine previous studies.
Dodger Stadium
Fans pack Dodger Stadium. The nine pro sports teams in Los Angeles and Orange counties sold 82 percent of their tickets last year.
The $4.1 billion impact in 2012 was actually down 3 percent compared to the 2009 study. But the Anderson authors noted that result was expected given the harsh effects of the recession.
"Sports is not an ordinary day-to-day expense for the common person," Holzman said. "So in days of economic hardship I expected the results to be not as good as they were before."
Still, examining data that showed slight downward trends was engaging work, said Holzman, who researched horse racing, marathons, triathlons and bike racing. Team members divided the research equally and met weekly from January to June to compare data and plan what their next steps should be.
"Our work was undoubtedly valued by the L.A. Sports Council and was released to the press, so this was satisfying," Druckman said. In total, the teams provided between 1,000- 2,000 hours of work for each partner company or agency.
Simon of the Los Angeles Sports Council said that he’s always surprised by one or two findings in the series of reports. "The L.A. area’s nine professional teams combined sold 82 percent of all their available tickets last year, despite an industry trend of declining attendance at events during the same period due to the soft economy," Simon said.
"If you’re trying to show that there’s a huge throbbing sports market in L.A. then you can use that," Holzman said of the data.