Ijsms 16 04 2015 B004

International Journal of Sports Marketing and Sponsorship
Intangible and tangible value: brand equity benefits associated with collegiate athletics
Carl S Bozman Daniel Friesner Matthew Q McPherson Nancy M Chase
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Carl S Bozman Daniel Friesner Matthew Q McPherson Nancy M Chase , (2015),"Intangible and tangible value: brand equity benefits
associated with collegiate athletics", International Journal of Sports Marketing and Sponsorship, Vol. 16 Iss 4 pp. 22 - 45
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Intangible and tangible value: brand equity
benefits associated with collegiate athletics
Keywords
brand equity
college athletics
community benefits
Carl S. Bozman
Professor of Marketing Abstract
School of Business Administration, Gonzaga University
Daniel Friesner This paper presents a simple methodological framework

Associate Dean and Professor of Social and Administrative Science, to characterise the tangible and intangible benefits of
RESEARCH PAPER
College of Pharmacy, Nursing and Allied Sciences, North Dakota State
University, Fargo, North Dakota (ND) 58108, USA
a university athletics department. The methodology
Email: daniel.friesner@ndsu.edu is applied to the athletics department at Gonzaga
Tel: +1 701 231 9509 University (GU) in Spokane, Washington USA. The
Fax: +1 701 231 7606
brand equity associated with this department is
Matthew Q. McPherson estimated at approximately US$5.8 million in 2006. Of
Associate Professor of Finance, School of Business Administration,
Gonzaga University this, between $617,000 and $2.71 million is ascribed
to a specific type of tangible brand equity (with the
Nancy M. Chase most plausible estimate being $926,000); namely, the
Associate Professor of Management Information Systems
School of Business Administration, Gonzaga University impact of GU athletics events on the economic vitality
of the local community. The remainder is attributed to
Peer reviewed (unobserved) intangible brand equity benefits.
Executive summary
Collegiate athletics are a strategic investment for record. This implies that institutions must gain some
many universities in the USA. The National Collegiate benefits associated with athletics beyond the (net
Athletics Association (NCAA) reported nearly 350 accounting) revenues generated by their athletics
Division I members and nearly 300 Division II teams. Brand equity is a likely source of benefits.
members in 2014. A minority of institutions are able However, empirically characterising the sources and
to finance their athletics programmes and achieve contributions of athletics department-related brand
surplus net-revenue by having just one or two highly equity to the institution is often difficult.
profitable collegiate sports. However, this is not the A parsimonious, four step methodology is proposed
norm and programmes typically lose money regardless to quantify the brand equity of an athletics department.
of one particular sport’s popularity or winning A fifth step in the methodology (not explored fully
l JULY 2015 l International Journal of Sports Marketing & Sponsorship 22
SMS16.4 Paper 3 McPherson KT.indd 261 13/07/2015 19:38

Brand equity
in this manuscript) allows the researcher to attach $617,000 and $2.71 million can be ascribed to the
statistical significance to brand equity estimates. The impact of GU athletics events on the economic vitality
first step entails collecting (usually through public of the local community. The remainder is attributed to
information request) the income statement for the (unobserved) intangible brand equity benefits.
athletics department’s explicit revenues and expenses.
Doing so gives the researcher a minimal estimate
of the athletics department’s value to the institution Introduction
(otherwise the institution would not subsidise the net

revenue shortfall). The second step is to determine Collegiate athletics are a strategic investment for
what aspects of athletics programme brand equity many universities in the US. According to its website,
(beyond net revenue) can be quantified. The literature the National Collegiate Athletics Association (NCAA)
suggests that athletics programmes draw visitors from reported nearly 350 Division I members and nearly
outside of the local economy, which generate economic 300 Division II members in 2014 (see http://www.
benefits to the institution and the local economy. ncaa.org/about?division=d1 and http://www.ncaa.
These benefits are measurable using input-output org/about?division=d2). A minority of institutions are
models. The third step entails conducting surveys, able to finance their athletics programmes and achieve
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or gathering the information necessary to implement surplus net-revenue by having just one or two highly
the input-output model and evaluate the economic profitable collegiate sports, e.g. the University of Texas
contribution of the athletics department. The fourth Longhorns (Isidore, 2006). Longhorn football is a very
step is to subtract the value of those economic impacts lucrative sport and netted over 25 million dollars in
from the revenue shortfall to determine the remaining 2012 alone (USA Today, 2014). Such a surplus allows
value of intangible brand equity. The second and third net-revenue-generating sport(s) to internally subsidise
steps should be repeated if additional, quantifiable non-revenue sports, as well as other institutional
sources of brand equity exist, until either the shortfall priorities.
is covered or the sources of tangible brand equity are In most circumstances, however, having one or two
exhausted (i.e. a non-negative value is achieved in extremely successful sports does not ensure that an
step four). As an optional fifth step, a description of entire athletics department generates positive cash
applying simulation analysis to steps two through four flow. Once the various subsidies are accounted for,
is provided. This step allows the researcher to attach most collegiate athletics programmes lose money
statistical properties to brand equity estimates. regardless of a particular sport’s popularity or winning
As an illustrative case study, this methodology record. The median budget deficit (i.e. generated
is applied to the athletics department at Gonzaga athletics department revenues less expenses) for
University (GU) in Spokane, Washington in the US. a Football Bowl Subdivision (formerly Division I
The brand equity associated with the department is A) programme was $12,272,000 in 2012, up
estimated to be approximately $5.8 million in 2006, from $5,902,000 in 2004 (Fulks, 2013a). The
with tangible brand equity from local economic fiscal situation for other NCAA members was even
impacts totaling just under $1 million. Because of the worse. The median net revenue shortfall for Football
varying number of assumptions and computational Championship Subdivision (formerly Division I AA)
requirements associated with simulation analysis, the athletics departments was $10,219,000 in 2012 (up
current study does not attempt to attach statistical from $5,907,000 in 2004), while the median loss
properties to these estimates, but does provide a associated with Division II membership in 2012 was
simple sensitivity analysis based on variability in daily $4,521,600 for schools that sponsored football and
visitor spending patterns. More specifically, between $3,539,900 for those that did not sponsor football
23 International Journal of Sports Marketing & Sponsorship l JULY 2015 l

Brand equity
(Fulks, 2013b). With greater travel expenses, facility providing additional revenue streams, e.g. increased
upgrades and more intensive (and expensive) recruiting student enrollment (Frye, Bozman, & Stotlar, 2002;
and student athlete support initiatives, these losses are Martinez et al, 2010).
expected to continue (and increase) for the foreseeable The benefits of an institution’s athletics programme
future. Indeed, much of the conference realignment brand equity go well beyond ticket and merchandise
that has occurred (and continues to occur) over that sales. For example, successful sports programmes
past three to five years appears to be a direct attempt have been shown to increase student applications and
to minimise these losses by acquiring greater revenue lead to increased student retention (Tucker, 2004).
streams, primarily through more lucrative media Rhoads and Gerking (2000) also document new and
contracts. larger donations from alumni and unaffiliated friends
Over and above new media contracts, the subsidies than might have otherwise been expected. Perhaps
necessary to cover athletics department net revenue even more importantly, collegiate sports programmes
shortfalls come from a variety of sources. Student fees can alter the perception of a community, relative to
are one popular method used to pay for intercollegiate other communities, and cause it to be seen as a more
athletics. For example, in 2010, approximately 21% of attractive place to live, establish a business or visit
Longwood University’s tuition and fees (or $2,022 of (Johnson & Sack, 1996). In this way, an athletics
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$9,855 per student) was used to support the athletics department’s brand equity can enhance the college
department (de Vise, 2010). Moreover, in 2012, 69 or university’s overall economic impact within the
Division I athletics programmes required subsidies to community.
cover at least three quarters of their operating budgets Despite the obvious institutional benefits associated
(USA Today, 2014). Direct state support for public with increasing the value of brand-related assets
institutions of higher education is also common. through athletics programmes, very few studies explore
This form of financial subsidy ranges from funding the mechanism by which these benefits accrue or
the expenses associated with building all or part of investigate whether the magnitudes justify subsidies
athletics facilities to the direct provision of operating received from other sources. Studies estimating the
budgets (Howard & Crompton, 2004; Clotfelter, economic value of higher education institutions are
2011). quite common, with over four dozen such studies
Given these subsidies, the majority of NCAA published since 1960 (Florax, 1992; Giesecke &
institutions must value sports programmes in ways Madden, 2006). However, athletics programme
other than profitability. Otherwise, universities would brand equity benefits are typically aggregated within
not maintain their athletics programmes. Building institutional measures of economic impact, and thus
institutional brand equity is one plausible justification cannot be distilled from these studies. One notable
(Clark, Apostolopoulou, Branvold, & Synowka, 2009; exception is Thompson (2005), who estimated the
Henseler, Wilson, & Westberg, 2011; Martinez, total economic impact associated with the athletics
Stinson, Kang, & Jubenville, 2010). Collegiate department at the University of Nebraska to be
sports, either independently or in conjunction with in excess of 114 million dollars during the 2004
other education related activities, can increase the academic year.
accumulated value of an institution’s brand related Two additional issues limit the usefulness of existing
assets. A well-known, and highly regarded, school economic valuation studies. First, some investigators
name or trademark can increase student and donor may be unconcerned with the specific contribution of
retention, allow tuition and gift premiums to be an athletics department’s contribution to institutional
more easily maintained and make an institution less brand equity and may be more interested in using
vulnerable to competitive action or crisis as well as methods designed to justify a decision that has already

Brand equity
been made or which people wish to make in the near economic impacts as possible (i.e. the tangible
future. In other words, these studies may be conducted components of brand equity) and subtract those values
by individuals with a vested interest in identifying a from the actual costs of supporting the university’s
particular outcome and presenting aggregated (rather athletics programmes. The difference is an estimate
than disaggregated) results that may help justify the of the minimum additional dollar value that must be
pre-intended outcome (Lee, 2001; Matheson, 2002). placed on athletics programme donations, enrollment
Second, economic impact studies (which include generation and other benefits, over and above its
valuations of brand equity) frequently contain method- monetary cash flow and local economic impact, in
ological flaws, such as the failure to exclude local order to justify a strategic investment by this university.
residents or to incorporate local activities which would That is, assuming that this university continues to
have otherwise occurred. For example, community support its athletics department at current levels, the
residents will still spend most, if not all, of their difference reflects a minimum estimate of the university
recreation dollars on local entertainment substitutes, athletics department’s intangible value, or intangible
including other collegiate sports programmes, when brand equity. Whether the university in question
a particular athletics programme does not exist. actually places that amount of value on the programme
Furthermore, out of area sports participants and is left to the executive-level decision makers within
RESEARCH PAPER
spectators who displace other potential events may the university, who must decide whether to increase,
easily spend less money in that enterprise than people decrease or maintain current subsidies to the athletics
engaged in those activities which have been crowded programmes. As an illustrative example, the brand
out. These issues must be accounted for (and are often equity for the GU athletics department, a successful
not) in any economic impact or brand equity study, non-football NCAA Division I athletics programme, is
and a failure to do so over-states the magnitude of the estimated for the 2006-2007 fiscal year.
resulting estimates (Friesner, Rosenman, & Bozman, The remainder of this paper proceeds in the following
2009). A conclusion that a collegiate athletics steps. First the role of collegiate athletics in shaping
programme enhances either the welfare of a specific the economic vitality of local economies is discussed.
university or community seems more an act of faith The study’s primary objectives are developed and
than reason. Furthermore, evidence regarding whether postulated. Next, the empirical methodology is
or not collegiate athletics programmes stimulate new presented. The methodology applies both institutional
and existing revenue streams which exceed their costs data and survey data within an input-output model
is inconclusive. framework to characterise the impact of a university
The reasons why a higher education institution athletics department on the local economy. This impact
would choose to invest in collegiate athletics, and is subsequently compared to the net revenue currently
the potential gains from doing so, are not obvious. generated by the department to identify the surplus
In this study, an empirical methodology is proposed or shortfall. As noted earlier, a shortfall indicates the
to quantify a university athletics department’s brand minimum value that the university must place on an
equity by disaggregating brand equity into its tangible investment in athletics (i.e. its minimum intangible
and intangible components. To avoid many of the brand equity value) to justify maintaining the current
shortcomings and biases discussed in the previous level of support. The methodology is then applied to
paragraphs, our goal is not to investigate whether the case study of the GU athletics department; hence
the tangible and intangible benefits of an athletics those estimates are presented and interpreted. The
programme justify the costs to the university as a paper concludes with a discussion of how this, or any
whole. Instead, we account for as many possible other higher education institution, can independently,
quantifiable sources of monetary cash flows and as well as in collaboration with community leaders

Brand equity
and other strategic partners, enhance the brand single accounting statement or set of statements) or
equity benefits associated with a collegiate athletics may accrue indirectly. The former characterise the
programme. athletics department’s accounting profit, while the
latter characterise the economic costs (inclusive of
opportunity costs) accruing to the athletics department.
Methodology Within the context of this study, the economic costs
of interest are those framing the institution’s decision
Framing the analysis to subsidise (or not subsidise) college athletics, and
In order to empirically quantify a college athletics thus provide a characterisation of the institution’s
department’s brand equity, a working definition for the brand equity. The contributions of economic costs and
term ‘brand equity’ must be established. Two related accounting profit to the formation of economic profit,
definitions exist in the literature (Gladden, Milne, & and by extension an athletics department’s net value to
Sutton, 1998). Aaker (1991, p. 15) defines brand the institution, can be expressed algebraically as:
equity as those assets that are ‘linked to a brand, its
name and symbol, that add or subtract from the value Athletics Dept. Net value = Total monetary revenues
provided by a product or service’. Farquhar (1990) – Accounting costs – Economic costs = Accounting
RESEARCH PAPER
defines brand equity as the additional value (beyond profit – Economic costs (1)
all other characteristics) that accrues to a product as a
result of its name. In both definitions, the underlying Equation (1) assumes that brand equity is interpreted
theme is one of value; more specifically, brand equity as an investment, which yields a series of accruals
is one type of firm value. This value is created by over time to the institution and thus is consistent
the impact of a name (or a corresponding product with Farquhar’s (1990) definition of brand equity.
or symbol) on consumers’ (subjective) evaluations For example, an investment in athletics may bring in
of a product. If the evaluation is positive, consumers tourism dollars from outside of the local economy or
demand more of the product, which leads to an increase student enrollment in future years.
increased financial windfall to the firm. Aaker explicitly We note, in passing, that there is a very strong
defines this return as a stock of wealth (an asset), connection between both Farquhar’s definition of
while Farquhar defines brand equity as a flow (or brand equity and Aaker’s (1991) definition, which is
accrual) which gradually accumulates as a stock of embodied in equation (1). More specifically, Besanko
wealth. In this analysis, we employ Farquhar (1990)’s et al (2004, pages 21-23) show that any economic
more general definition and explicitly define brand profit (or, in this case, economic net revenue) earned
equity as an accrual of value that occurs from the use by an athletics department is simply the net present
of a name, brand or symbol. value of these investments in brand equity over and
Given this definition of brand equity, the above accounting profit. If a firm earns zero economic
methodology follows standard economic theory and profit, then the institution’s subsidisation of an athletics
evaluates an athletics department’s tangible and department (in a given time period) is exactly equal
intangible value to the institution (Besanko, Dranove, to the net present value of brand equity investment
Shanley, & Schaefer, 2004). Any business decision (i.e. the value of assets net of liabilities and current
that is made by an institution at a given point in accounting profit shortfall/subsidy). In other words,
time (whether or not it is strictly profit maximising) estimates of brand equity, when measured as a stock
is made on the basis of net benefits – also known as of (accounting) wealth, should be identical to estimates
economic profit. These net benefits may accrue directly based on economic profit (or economic net revenue).
and explicitly to the university (and be captured in a Whether one adopts Farquhar’s definition or Aaker’s

Brand equity
definition is largely based on empirical considera- must be some alternative benefits (or negative costs)
tions; that is, the type of data one has to conduct the to the institution as a whole, whose monetary value
empirical analysis. at least offsets the negative accounting profit. Those
The NCAA requires that all schools with Division benefits may be estimated via indirect means (i.e.
I status meet two criteria which directly affect an through the use and flow of tangible benefits) or may
athletics department’s accounting profit. First, an be latent to the researcher (i.e. intangible benefits).
institution must sponsor at least fourteen sports Because institutions typically pursue a wide range of
programmes (a minimum of eight for women and activities which generate these tangible and intangible
six for men). In addition, at least 50% of allowable benefits, our approach is to characterise the value of
financial aid must be awarded to student athletes as the single, most commonly pursued tangible benefit,
grants. A majority of these financial aid awards must leaving the remainder of these activities as intangible.
also be given to women (Keller, 2006). Since many Thus, equation (1) can be expressed as:
of these collegiate sports programmes do not cover
their direct expenses with ticket, media and other Athletics Dept. Net value = Accounting profit –
related revenues, they must be subsidised by other Economic costs = Accounting profit + Tangible
RESEARCH PAPER
sports which do produce positive net revenue or risk benefits + Intangible benefits = Accounting profit +
the entire athletics department incurring negative Tangible brand equity + Intangible brand equity (2)
accounting profit. As noted by USA Today (2014),
only seven Division I athletics departments (of the The most common activity of any institution is to drive
228 included in the study) did not require an external local economic growth. Aoki and Yoshikawa (2002)
subsidy. describe how higher education influences regional
These findings lead naturally to a research question economic growth through the innovation process.
that examines whether or not the benefits of a Division The fundamental factor that drives economic growth
I sports programme exceed the expenses associated in their model is the demand for new products.
with sports participation. Since a secondary objective Regional economies will experience significantly
of this paper is to employ the methodology within the higher growth rates whenever institutions of higher
context of a case study for GU, the research question is education facilitate the creation and dissemination of
posited within the context of the case study: new ideas and corresponding products (Rothaermel
& Thursby, 2005; Segerstrom, Anant, & Dinopoulos,
Case study question 1: Does the athletics 1990). Those products may be stimulated directly
department at Gonzaga University generate positive by an athletics department (for example, offering
accounting profit? sports camps for children) or through indirect means
(athletics events which generate revenues for existing
If, as the literature suggests, when a university’s business such as hotels and restaurants). This
athletics programmes do not generate positive leads to the second research question of this study,
accounting profit, then the economic costs associated which examines whether the impact of an athletics
with these programmes must be sufficiently negative department on the local economy is sufficiently large
to ensure that equation (1) is at least zero. Otherwise, to ensure that its overall contribution to the institution
the university would be better served by reallocating its as a whole is positive. Within the context of our case
resources away from athletics towards other pursuits. study, the research question can be stated as follows:
Put differently, if accounting profit is negative, there

Brand equity
Case study question 2: Does the Gonzaga University After describing each step, a sub-section is included
athletics department generate a sufficiently large which describes that step of the methodology within
tangible economic impact to ensure that the the context of the GU case study. The case study
department’s net value to the institution (i.e. brand employs a number of different publicly available
equity) is positive? sources, which can be obtained (or collected) by
both practitioners and researchers. Because the
If the second research question is answered in the case study employs data from a single academic
affirmative, then the athletics department is not institution and is intended as a practical example
only economically viable, but adds to the economic for practitioners, the case study produces relatively
profitability of its university as a whole. But, if simple, non-statistical estimates. The final section
the answer to this question is ‘no’, then either the of the empirical methodology describes several
institution should reduce funding to the athletics possible means by which academic researchers and
department or there are intangible benefits accruing advanced practitioners can apply the methodology
to the institution from the athletics department which using an explicit statistical foundation. Because all
are not captured in the economic impact estimates, information used in this study is either freely available
RESEARCH PAPER
and whose monetary values are at least as large as within the public domain, or pertains to the finances
the difference between the negative accounting profit of an academic institution (rather than a human
and the contribution of the athletics department to subject), the Gonzaga University Institutional Review
the local economy. Given the plethora of Division I Board certified the project as exempt and provided
NCAA athletics departments, the majority of whom permission to conduct the research.
consistently run large accounting profit deficits, we
assume the latter to be the case. As such, a final Step 1: Measure the athletics department’s
research question can be posited, which is provided accounting profit/net revenue
below in the context of this case study. The first step in the methodology is to establish a
baseline measure of accounting profit or net revenue
Case study question 3: What is the minimum for the athletics department. Since the majority of
monetary value of Gonzaga University athletics Division I and Division II athletics programmes are
department’s intangible brand equity? required to report this information to the NCAA or state
regulatory bodies, the information can be obtained via
publicly available sources or via open records requests
Empirical methodology to the institution.
This paper adopts an empirical methodology that is Implementing step 1 in the case study
consistent with the literature, and can be implemented To examine the accounting profit of the GU athletics
in a straightforward manner by both academic department, information on the revenues and
researchers (who may wish to use advanced statistical expenditures of the department during the 2006-2007
methodologies and draw conclusions across multiple fiscal year was obtained from the university’s vice
institutions) and practitioners (who may neither be president for finance. GU does not sponsor football at
trained in advanced statistical techniques nor be any level, but does sponsor a very successful men’s
interested in drawing conclusions beyond their own basketball programme. As such, we examined the
institution). To do so, each step in the proposed accounting profit for both this individual team as well
methodology is described in a very general manner. as for the GU athletics department as a whole.

Brand equity
Step 2: Measure the economic impact of the food distributor/wholesaler to replace those supplies
athletics department’s sporting events used to provide meals to the faculty, and to help
Characterising the economic impact of an athletics pay the wages for the restaurant’s staff. Spending by
department requires a more detailed approach. these restaurants is a portion of the indirect effect.
Rueda-Cantuche and Ramirez-Hurtado (2007) The restaurant’s (indirect effect) spending represents
argue that input-output analysis should be used to income streams to other agents in the economy (the
assess the economic impact of sports programmes staff and the distributor/wholesaler), who in turn spend
on a regional community. These researchers employ this money, and so on. The larger the share of income
local economic information supplemented with and profits that are spent and re-spent within the local
survey responses as inputs. Using survey data alone economy (or the less spending that occurs outside of
would be inadequate in all but the most unusual the local economy), the larger the indirect, induced,
circumstances. Information collected about people and cumulative impacts will be. As a consequence,
attending a sporting event, regarding their origin the final economic impact of ten new university faculty
and expenditures, would only be appropriate in members is likely to be much larger than the initial
circumstances where the experience is transitory increase in wages and output. The use of input-output
and not associated with a great deal of physical modeling software (rather than survey techniques
RESEARCH PAPER
infrastructure or employment. For example, a alone) is important because the software will capture
marathon staffed by volunteers that takes place only the indirect and induced impacts in the analysis
once a year using public streets as the race course. (Crompton, 1995; Giesecke & Madden, 2006;
The reason for this is that, while survey responses Steinacker, 2005).
capture the direct impact of collegiate athletics (or
any other) events on the local economy, they fail to Implementing step 2 in the case study
capture the compounding (or multiplier) effects that a This study uses the IMPLAN (Impact Analysis for
single event (or a single dollar spent) will have on a Planning) modeling system to generate economic
local economy. impact estimates. Other approaches to economic
Consider an example where a university hires ten impact modeling (such as the REMI input/output
new faculty members in a given year. The direct model and MMBF based input/output modeling) are
effect is an increase in spending by the university available (Cox & Munn, 2001; Crihfield & Campbell,
to compensate the new faculty members for their 1991). However, IMPLAN was chosen because this
time and expertise. The majority of this increase in modeling system is simple to use, provides relatively
university spending translates into personal income reliable estimates and has the wide acceptance of
for the new faculty members, which will subsequently estimates by economic development practitioners and
be spent on goods and services, most of which will policy makers (Crihfield & Campbell, 1991; Freisner et
occur in the local economy. The re-spending of the al 2009).
same money by the faculty members’ households IMPLAN uses four basic measures of economic
(first by the university, and later by the households) is activity: output (the value of firm sales less inventory
known as an ‘induced effect’. As the faculty members changes), employment (the value of wages and
spend their incomes on goods and services, this salaries of employed and self-employed workers),
stimulates even greater spending by other firms in the income (personal income, profit and dividends) and
local economy, which is known as an ‘indirect effect’. value added (all employee compensation, profit,
For example, as these new faculty members spend dividends, property-related income, and indirect
some part of their incomes at local restaurants, those business taxes). Value added was chosen as the
restaurants will need to purchase supplies from a primary measure of economic activity because it more

Brand equity
appropriately and comprehensively captures the impact Employment Security Department (ESD), there were
of spending on the local economy (MIG, 2006). All approximately 215,400 individuals employed in
dollar values are measured in the base year from Spokane county as of December 2006 (Washington
which the data are collected. Because the data used State Employment Security Department, 2012).
in this analysis are from 2006, all monetary estimates Next, data from a publicly available survey were
should be interpreted as 2006 dollars. used to estimate the extent to which people from
outside of Spokane county (primarily guests and
Step 3: Conduct an economic impact survey relatives of GU students) attended GU athletics

To identify the economic impact of an athletics events during the 2006-2007 academic year. A
department on the local economy, the number of random sample of all enrolled students was obtained
individuals who travel from outside of the local from the student life office. The web-based survey
economy to attend athletics events, and how much, was administered to 800 students at the end of
on average, each of these individuals spends per event the 2006-2007 academic year. A drawing for two
must be identified. Only those individuals who travel men’s basketball tickets and several other tokens
from outside of the local economy to attend athletics of appreciation were offered as an incentive to take
events should be counted, since most local residents the survey. Four hundred and forty one individuals
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would simply shift spending to other local recreational completed the questionnaire in a two week
activities had such athletics events been unavailable period which resulted in a response rate of 55%.
(Friesner et al, 2009). Concomitantly, individuals who Respondents were asked to identify the number of
leave other economies to spend money in the local visitors, their length of stay and the proportion of
economy specifically due to athletics events suggest time and expense allocated across various activities,
no viable substitutes, and thus a unique economic including attending GU athletics events. More detailed
impact. information about the survey can be found at http://
blogs.gonzaga.edu/sbaknowledgecenter/.
Implementing Step 3 in the case study Because the survey targeted a random sample of
To characterise tangible impacts arising from GU GU students, as well as having a response rate less
athletics department brand equity, publicly available than 100%, the survey responses had to be propor-
information and spending estimates drawn from the tionally scaled up to those for the entire GU student
sports marketing literature are used. The first task population. To do so, enrollment data, which was
is to define the size and scope of the local Spokane provided by the GU Office of Institutional Research,
economy. Since the IMPLAN software uses the county was used. A possible problem with enrollment data
as the unit of economic analysis, this definition is is inconstancy over the entire academic year. Since
retained for use in the current study. The US Census enrollments at GU tend to decline between the autumn
Bureau estimates that Spokane county has over and spring semesters, spring 2007 enrollment was
450,000 residents; the largest community between used because spring 2007 is the smaller of the
the Minneapolis/St. Paul, Massachusets (MN) two numbers, and hence gives more conservative
and Seattle, Washington (WA) metropolitan areas. estimates. These numbers may also better approximate
Although Spokane county has a relatively diverse mix an actual student support base for GU athletics
of industries, the largest employers operate in the programmes over the academic year (including late
health care (including two large hospitals), education 2006 in which all monetary values are measured),
(including five major institutions of higher education) since students who are leaving the university within
and government service industries (including Fairchild the academic year (especially for academic or personal
Air Force base). According to the Washington State reasons, rather than graduation) may be less likely

Brand equity
to host visitors who specifically wish to attend GU calculates its estimates based on a calendar year. All
athletics events. monetary estimates were converted to 2006 dollars,
Having identified an estimate for the total number not only because doing so provides more conservative
of individuals who were expected to attend a GU estimates, but also because the spending estimates
athletics even during the 2006-2007 academic year, provided by Bozman et al, (2010) are provided in
a determination of how (in which industries) these 2006 dollars.
individuals spent their incomes and (on average) how
much they spent per athletics event must be made. Step 4: Estimate intangible brand equity impacts
To do so, the authors reviewed the sports marketing If the accounting profit values are negative and the
literature. Another study of a non-GU-related sporting tangible brand equity (economic impact) estimates
event held in Spokane county in 2006 suggests that are insufficient to offset the accounting profit losses,
the average visiting tourist spent about $150 per day then the difference between these two values can
(Bozman, Kurpis, & Frye, 2010). This estimate almost be assumed to represent a minimal dollar estimate
certainly exhibits some variation. To account for this, of an athletics department’s intangible brand equity.
several sensitivity analyses were conducted, where This estimate represents a minimum value because
the average level of daily spending varied between the value chosen assures zero economic profitability
RESEARCH PAPER
$100 per day and $200 per day. The study also (or zero net athletics department institutional value),
suggests for each dollar spent by visitors, 20% was a condition which would only occur in the long run,
spent on transportation, 62% was allocated to food or in short run in perfectly competitive/perfectly
and beverage spending, 4% was spent on lodging contestable markets. If these market structures do not
and 5% was allocated to shopping. The relatively hold, economic profitability may exceed zero, which
small percentages allocated to lodging and shopping understates the value of intangible brand equity.
suggest that many visitors who attend athletics events
in Spokane are from the surrounding region, and Implementing step 4 in the case study
make ‘day trips’ to athletics events. This is generally Implementing step 4 in the context of the case study
consistent with the fact that Spokane is a major hub is a matter of simple arithmetic. However, since the
for eastern Washington, eastern Oregon and northern case study employs several different estimates of
Idaho, but is not really considered a tourist ‘destination spending per day, and several corresponding tangible
of choice’ nationally. brand equity (economic impact) estimates, the
Lastly, the total expected number of visitors can be calculation of intangible brand equity estimates must
multiplied by the average spending per day (and per be repeated several times, once for each spending
industry) per tourist to arrive at monetary spending estimate.
values. These dollar amounts were then submitted
to IMPLAN using North American Industry Classi- Optional step 5: Establishing confidence intervals for
fication System (NAICS) codes for each spending the brand equity estimates
category: 395 for transportation, 481 for food, 479 The statistical properties of the tangible brand
for lodging and 408 for shopping. IMPLAN uses equity estimates can be established in several
this information to compute the direct, indirect ways, depending on the data available to the
and induced economic impacts of the GU athletics researcher. However, all such approaches require
department. One methodological issue that arises from the use of simulation (and more specifically,
using IMPLAN to calculate these impacts is that the bootstrapping) methods to generate confidence
institution-specific data are collected over an academic intervals (Greene, 2000; Albright, Winston, & Zappe,
year (August 2006 to May 2007), while IMPLAN 2003). Additionally, simulation methods are most

Brand equity
CHART 1 Methodology for measuring brand equity
STEP ACTION
1: MEASURE AN ATHLETIC ESTABLISH A BASELINE MEASURE OF ACCOUNTING PROFIT OR NET REVENUE FOR THE
DEPARTMENT’S ACCOUNTING PROFIT OR ATHLETIC DEPARTMENT. THIS INFORMATION CAN BE OBTAINED VIA PUBLICLY AVAILABLE
NET REVENUE SOURCES OR VIA OPEN RECORDS REQUESTS TO THE INSTITUTION.
2: MEASURE THE ECONOMIC IMPACT OF RUEDA-CANTUCHE AND RAMIREZ-HURTADO (2007) ARGUE THAT INPUT-OUTPUT ANALYSIS
AN ATHLETIC DEPARTMENT’S SPORTING SHOULD BE USED AND EMPLOY LOCAL ECONOMIC INFORMATION SUPPLEMENTED WITH
EVENTS SURVEY RESPONSES AS INPUTS. THE USE OF INPUT-OUTPUT MODELING SOFTWARE (RATHER
THAN SURVEY TECHNIQUES ALONE) IS IMPORTANT BECAUSE THE SOFTWARE WILL CAPTURE
THE INDIRECT AND INDUCED IMPACTS IN THE ANALYSIS (CROMPTON, 1995; GIESECKE &
MADDEN, 2006; STEINACKER, 2005).
3: CONDUCT AN ECONOMIC IMPACT TO IDENTIFY THE ECONOMIC IMPACT OF THE ATHLETIC DEPARTMENT ON THE LOCAL
SURVEY ECONOMY, THE NUMBER OF INDIVIDUALS WHO TRAVEL FROM OUTSIDE OF THE LOCAL
ECONOMY TO ATTEND ATHLETIC EVENTS, AND HOW MUCH, ON AVERAGE, EACH OF THESE
INDIVIDUALS SPENDS PER EVENT MUST BE IDENTIFIED.
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4: ESTIMATE INTANGIBLE BRAND EQUITY IF THE ACCOUNTING PROFIT VALUES ARE NEGATIVE AND THE TANGIBLE BRAND EQUITY
IMPACTS (ECONOMIC IMPACT) ESTIMATES ARE INSUFFICIENT TO OFFSET THE ACCOUNTING PROFIT
LOSSES, THEN THE DIFFERENCE BETWEEN THESE TWO VALUES CAN BE ASSUMED TO
REPRESENT A MINIMAL DOLLAR ESTIMATE OF AN ATHLETIC DEPARTMENT’S INTANGIBLE
BRAND EQUITY.
OPTIONAL STEP 5: ESTABLISHING THE STATISTICAL PROPERTIES OF THE TANGIBLE BRAND EQUITY ESTIMATES CAN BE
CONFIDENCE INTERVALS FOR THE ESTABLISHED IN SEVERAL WAYS, DEPENDING ON THE DATA AVAILABLE TO THE RESEARCHER.
BRAND EQUITY ESTIMATES HOWEVER, ALL SUCH APPROACHES REQUIRE THE USE OF SIMULATION (AND MORE
SPECIFICALLY, BOOTSTRAPPING) METHODS TO GENERATE CONFIDENCE INTERVALS (GREENE,
2000; ALBRIGHT, WINSTON, & ZAPPE, 2003). ADDITIONALLY, SIMULATION METHODS
ARE MOST PARSIMONIOUSLY APPLIED WHEN THE RESEARCHERS RELY ON THE USE OF
INPUT-OUTPUT MODELS TO GENERATE TANGIBLE BRAND EQUITY ESTIMATES, SINCE THESE
METHODS USE (RATHER LARGE) LINEAR ALGEBRA OPERATIONS TO GENERATE ESTIMATES.
HENCE, THE STATISTICAL FOUNDATIONS OF THE TANGIBLE BRAND EQUITY ESTIMATES (AND,
BY COMPLEMENTARITY, THE INTANGIBLE ESTIMATES) WILL FOLLOW (WHETHER DIRECTLY
OR INDIRECTLY) FROM THE UNDERLYING STATISTICAL PROPERTIES OF THE DISTRIBUTION(S)
UPON WHICH ONE SAMPLES (GREENE, 2000).
parsimoniously applied when the researchers rely on institution at one point in time, the assumption that
the use of input-output models to generate tangible the daily dollar value of visitor spending is a random
brand equity estimates, since these methods use variable is possible. If one has access to the original
(rather large) linear algebra operations to generate survey responses of visitor spending, a reasonable,
estimates. Hence, the statistical foundations of random sample can be drawn from that set of
the tangible brand equity estimates (and, by responses, conduct steps 1-4 as described previously,
complementarity, the intangible estimates) will follow and save the responses. Repeating this exercise at
(whether directly or indirectly) from the underlying least 1,000 (and often as many as 10,000) times
statistical properties of the distribution(s) upon which should provide sufficient information to approximate
one samples (Greene, 2000). For example, in the the sampling distribution (and confidence intervals
event that the researcher chooses to focus on one based on that distribution) for tangible brand equity

Brand equity
TABLE 1 Direct impact of Gonzaga University’s athletics programme during the 2006-07 academic year
CATEGORY MEN'S BASKETBALL TOTAL
REVENUES $3,265,226 $7,780,214
EXPENSES $4,177,973 $13,552,798

NET REVENUE WITHOUT INSTITUTIONAL SUPPORT ($912,747) ($5,772,584.00)
INSTITUTIONAL SUPPORT $1,521,562 $8,999,434
NET REVENUE $608,815 $3,226,850.00
NATIONAL PRIDE 0 0%
impacts as determined by visitor daily spending Implementing step 5 of the case study
RESEARCH PAPER
(Albright et al, 2003). Implementing simulation methods within the context

In the absence of survey data, it is possible to use of estimating an athletics department’s brand equity
simulation techniques to generate confidence intervals requires the researchers to make a number of
(Albright et al, 2003). As an example, the researcher additional assumptions about the sources of variation
might assume that the distribution of daily visitor that exist within the context of their analysis, and
spending is normally distributed with a specific mean justify how those assumptions appropriately relate to
and variance. Then, in the absence of actual data, the formation of brand equity. The imposition of those
researchers may randomly draw a sample from this assumptions are primarily statistical in nature, go
distribution and simulate the resulting distribution of beyond the primary objective of this analysis (which
tangible (and intangible) brand equity in an analogous is to describe how the brand equity of an athletics
fashion. department can be measured), and would add
Lastly, other sources of statistical variation may significantly to the length of the manuscript. These
be implemented in a similar fashion, whether in types of analyses also exceed the needs of many
substitution or combination with the distribution of practitioners, and as such would reduce the practical
daily visitor spending. For example, if the researcher usefulness of the methodology. This step is not
collects data across multiple academic institutions pursued in the case study, and is left as a suggestion
within a given geographic region (or within a given for future research.
athletics conference), simulating the effects of
institutional brand equity across these (presumably
comparable) institutions is a possibility. Researchers Case study results
may also examine the evolution of a single academic
institution’s brand equity over time, especially as the Table 1 presents the revenue and expense for all
institution’s student population changes or as local collegiate sports with men’s basketball separated for
economic conditions evolve. the purpose of illustration. By almost any measure, the
Gonzaga men’s basketball programme was the school’s
most successful collegiate sport, e.g. sold out arena
all season, consecutive conference championships,

Brand equity
TABLE 2 Survey characteristics
PANEL A: SPORTING ATTENDANCE BY STATUS PERCENT PERCENT
TYPE OF STUDENT UNDERGRADUATE GRADUATE TOTAL UNDERGRADUATE GRADUATE
OUT-OF-TOWN SPORTS ATTENDANCE 96 19 115 83.48 16.52
NO ATTENDANCE 252 74 326 77.3 22.7

TOTAL 348 93 441 78.91 21.09
PCT. ATTENDANCE 27.59 20.43 26.08
PCT. NO ATTENDANCE 72.41 79.57 73.92
CHI-SQUARE TEST STATISTIC 1.95
PROBABILITY VALUE 0.16
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PANEL B: SPORTING ATTENDANCE ACROSS
TYPE OF STUDENT FRESHMEN SOPHOMORE JUNIOR SENIOR TOTAL
OUT-OF-TOWN SPORTS ATTENDANCE 19 24 28 25 96
NO ATTENDANCE 64 60 74 54 252
TOTAL 83 84 102 79 348
CHI-SQUARE TEST STATISTIC 1.61
PROBABILITY VALUE 0.66
CHI-SQUARE TEST STATISTIC
PROBABILITY VALUE
PANEL C: AVE NUMBER OF DAYS

P.A. FOR SPORTS
STATISTIC UNDERGRADUATE GRADUATE
MEAN 6.82 8.84
MEDIAN 2 4
STD. DEVIATION 21.99 10.76
95% LOWER LIMIT 2.37 3.65
95% UPPER LIMIT 11.27 14.03
NUMBER OF OBSERVATIONS 96 19
Average number of days = number of out-of town visitors*number of trips*percent of trip allocated to attending a Gonzaga University athletic event.

Brand equity
TABLE 3 Gonzaga University enrollment
PANEL A: GONZAGA UNIVERSITY ENROLLMENT

DURING THE SPRING 2007 SEMESTER
PERCENT PERCENT
TYPE OF STUDENT UNDERGRADUATE GRADUATE TOTAL UNDERGRADUATE GRADUATE

FULL TIME - 2007 3934 1338 5272 74.62 25.38
PART TIME - 2007 281 588 869 32.34 67.66
TOTAL - 2007 4215 1926 6141 68.64 31.36
FULL TIME - 2006 3831 1202 5033 76.12 23.88
PART TIME - 2006 265 458 723 36.65 63.35
TOTAL - 2006 4096 1660 5756 71.16 28.84

RESEARCH PAPER
PERCENT CHANGE, FULL TIME 2006 - 2007 2.69 11.31 4.75 -1.97 6.27
PERCENT CHANGE, PART TIME 2006 - 2007 6.04 28.38 20.19 -11.78 6.81
PERCENT CHANGE, TOTAL 2006 - 2007 2.91 16.02 6.69 -3.55 8.75
National Basketball Assocation (NBA) draft prospects, availability of GU athletics events.

and a NCAA tournament appearance. Despite the Undergraduate students were more likely than
popularity and winning record of the men’s basketball graduate students to have guests and family come
team, this activity required institutional support of from outside of Spokane county to attend an athletics
almost one million dollars in order to show a surplus or event. However, Table 2 also indicates that guests of
positive net revenue. Note that all combined athletics GU undergraduate students typically did not stay in
programmes also earned positive accounting profit town as long their graduate counterparts. These results
if the institutional subsidy is included as revenue. are reasonable considering that a large proportion of
Indeed, this outcome is one of the reasons so much GU undergraduate students lives on campus and are
confusion and contention occurs when the value of not from Spokane county. Concomitantly, graduate
athletics to colleges and universities is debated in a students predominantly live off campus and tend to
public forum. live (and work) in Spokane county on a full-time basis.
Table 2 summarises the student survey results. As Thus, friends and relatives of undergraduate students
noted earlier, the assumption that most people who may opt for shorter more frequent visits because they
travel from outside of Spokane county to attend a cannot stay with a student(s). Graduate students (who
GU sporting event do so because they have relatives are typically older and more independent) may be
or friends attending the university is made. Local more likely to provide accommodations to guests, and
residents who attend GU athletics events are not entertain guests for longer, less frequent visits.
included because they presumably would spend Examination of Table 2 also indicates that the
their money in the local economy regardless of the distribution of visitors is skewed, with mean values

Brand equity
TABLE 4 Direct spending effects from out-of town visitors
PANEL A: CALCULATING DIRECT

EXPECTED EXPENDITURES - PART I
PERCENT
NUMBER OF MEAN DAYS TOTAL
WITH $100 PER DAY $150 PER DAY $200 PER DAY
STUDENTS PER YEAR VISITOR DAYS
VISITORS
TYPE OF STUDENT
FULL-TIME UNDERGRADUATES 3934 27.59 6.82 7401.35 $740,134.62 $1,110,201.93 $1,480,269.24
FULL-TIME GRADUATES 1338 20.43 8.84 2416.46 $241,645.68 $362,468.52 $483,291.35
TOTAL FULL-TIME STUDENTS 5272 26.08 - - $981,780.30 $1,472,670.45 $1,963,560.60
TOTAL UNDERGRADUATES 4215 27.59 6.82 7930.01 $793,001.38 $1,189,502.07 $1,586,002.76
TOTAL GRADUATES 1926 20.43 8.84 3478.4 $347,839.74 $521,759.61 $695,679.48
TOTAL STUDENTS 6141 26.08 - - $1,140,841.12 $1,711,261.68 $2,281,682.24
RESEARCH PAPER
PANEL B: CALCULATING DIRECT
EXPECTED EXPENDITURES -
PART II
PERCENT MEDIAN TOTAL

NUMBER OF
WITH DAYS PER VISITOR $100 PER DAY $150 PER DAY $200 PER DAY
STUDENTS
VISITORS YEAR DAYS
TYPE OF STUDENT
FULL-TIME UNDERGRADUATES 3934 27.59 2 2170.48 $217,048.28 $325,572.41 $434,096.55
FULL-TIME GRADUATES 1338 20.43 4 1093.42 $109,341.94 $164,012.90 $218,683.87
TOTAL FULL-TIME STUDENTS 5272 26.08 - - $326,390.21 $489,585.32 $652,780.42
TOTAL UNDERGRADUATES 4215 27.59 2 2325.52 $232,551.72 $348,827.59 $465,103.45
TOTAL GRADUATES 1926 20.43 4 1573.94 $157,393.55 $236,090.32 $314,787.10
TOTAL STUDENTS 6141 26.08 - - $389,945.27 $584,917.91 $779,890.55
of 6.82 and 8.84 for undergraduate students and values can be interpreted as a conservative estimate
graduate students, respectively, and median values on the GU athletics department’s economic impact,
of 2 and 4, respectively. This skewness must be while calculations based on the mean are more
accounted for in any subsequent calculations. We aggressive estimates. Given the nature of the analysis,
account for the distributional skewness by conducting the use of one estimate is not more or less preferred
all calculations twice; once with the mean values than the other. More conservative estimates will
and once with the median values. Since the median produce lower economic impact values, which mean
values are smaller than the mean values, the median that the university will need to place a higher value

Brand equity
TABLE 5 Calculating the indirect and induced spending effects from out-of-town visitors
PANEL A: CALCULATING
EXPECTED EXPENDITURES MEAN MEAN MEAN MEAN MEDIAN MEDIAN MEDIAN MEDIAN
FOR $100 PER DAY DIRECT INDIRECT INDUCED TOTAL DIRECT INDIRECT INDUCED TOTAL
TYPE OF STUDENT EXPENDITURES EXPENDITURES EXPENDITURES EXPENDITURES EXPENDITURES EXPENDITURES EXPENDITURES EXPENDITURES
TOTAL FULL-TIME
$965,204.00 $275,434.00 $314,319.00 $1,554,957.00 $320,880.00 $91,658.00 $104,495.00 $517,033.00
STUDENTS
TOTAL STUDENTS $1,121,579.00 $320,058.00 $365,243.00 $1,806,880.00 $383,362.00 $109,398.00 $124,842.00 $617,602.00
PANEL B: CALCULATING
RESEARCH PAPER
TOTAL FULL-TIME
$1,447,807.00 $413,152.00 $471,479.00 $2,332,438.00 $481,319.00 $137,351.00 $156,742.00 $775,412.00
STUDENTS
TOTAL STUDENTS $1,682,370.00 $480,088.00 $547,865.00 $2,710,323.00 $575,043.00 $164,096.00 $187,263.00 $926,402.00
PANEL C: CALCULATING
TOTAL FULL-TIME
$1,930,408.00 $550,869.00 $628,638.00 $3,109,915.00 $641,760.00 $183,135.00 $208,989.00 $1,033,884.00
STUDENTS
TOTAL STUDENTS $2,243,159.00 $640,117.00 $730,486.00 $3,613,762.00 $766,723.00 $218,795.00 $249,684.00 $1,235,202.00
All entries measure the value of total output. All values are in 2006 dollars.
on intangible brand equity to justify the allocation to live on campus as freshman and sophomores (in
of resources to the athletics department. A more addition to optional living arrangements for junior
aggressive estimate then requires a smaller minimum and senior students) and there simply were not any
valuation of intangible brand equity. additional dorm rooms available to facilitate further
Table 3 documents the absolute size and relative growth.
growth rates of both the graduate and undergraduate The student enrollment data obtained from the
populations at Gonzaga University. In large part, the GU Office of Institutional Research was combined
rate of undergraduate growth (3%) was smaller than with estimates of daily spending to convert aggregate
graduate student growth (16%) because of capacity student survey data into dollar values. Table 4
constraints. Gonzaga requires undergraduate students illustrates plausible aggregated expenditures of

Brand equity
Gonzaga University graduate and undergraduate day). At the expected spending level of $150 per
visitors in the local economy. Because the survey data day, the estimated economic impact is $2.71 million
indicate a highly skewed distribution of responses, we dollars. More than 86% of this spending is attributed
present two scenarios (panels A and B) which estimate to visitors of full time students. Given the residential,
spending based on the mean and the median number undergraduate mission of GU, this result is not
of annual out-of-town visitors, respectively. Depending surprising. Perhaps more interestingly, approximately
on the basis (mean or median values; $100, $150 or 38% of the total economic impact is attributable to the
$200 in spending per day), Visitors add somewhere induced and indirect impacts, with the induced impact
between $500,000 and $1,500,000 annually to being slightly larger than the indirect impacts.
the local economy. While these figures represent The estimates based on median student/visitor
a significant portion of the overall GU athletics participation in athletics events give a similar, but
department accounting profit shortfall, they do not more conservative picture. The total economic impact
come close to covering the entire amount. ranges from approximately $618,000 dollars (if
Disaggregating daily visitor spending across a visitors average $100 per day in expenditures) to
number of plausible categories, such as lodging, $1.24 million dollars (if visitors spend $200 per day).
transportation, shopping and food/beverage purchases At the expected spending level of $150 per day, the
RESEARCH PAPER
is also possible. To do so, the percentages estimated estimated economic impact is $926,000 dollars.
by Bozman et al (2010) are used. Due to the length Nearly 84% of this spending is attributed to visitors of
of these tables, and the fact that the percentage full time students, and approximately 38% of the total
distributions of spending across these categories is economic impact is attributable to the induced and
applied consistently to every possible total spending indirect impacts.
level, the dis-aggregations are reported in Appendix Tables 1 and 5 can collectively be used to estimate
Table 1 (expenditures based on the mean number of the tangible and intangible equity of the GU athletics
visitors) and Appendix Table 2 (by the median number department. According to Table 1, the department
of visitors). requires approximately $5.8 million dollars of annual
The economic impact analysis was implemented institutional support (in 2006 dollars). The university’s
using this data. As noted earlier, Spokane county is administrators’ support of this expenditure implies that
defined as the unit of analysis (tourism is from outside the GU athletics department has at least this amount of
the county), and IMPLAN was used to estimate direct, monetary brand equity value. Table 5 provides a range
indirect and induced impacts of the estimated visitors of estimates, both conservative and less conservative,
and their spending levels described in Tables 1-4. regarding how much brand equity can be attributed to
These spending levels were inputted into IMPLAN the department’s (tangible) impact on Spokane county.
using the NAICS codes 395 (for transportation), 481 Under most reasonable scenarios, the tangible impact
(food), 479 (lodging) and 408 (shopping). Table 5 is between $926,000 and $2.71 million, which
illustrates the resulting direct, indirect and induced covers between 16% and 47% of the brand equity
effects of visitors spending at various daily expenditure total. Clearly, tangible brand equity, as measured by
levels (in 2006 dollars). economic impact, covers somewhat less than 50%,
Examining economic impact estimates based on and perhaps as little as 16%, of institutional brand
mean student/visitor participation in GU athletics equity. For the collegiate athletics programme to be
department events suggests the total economic impact worthwhile, the remaining shortfall must be offset
ranges from approximately $1.81 million dollars (if by other sources, such as enrollment growth, price
visitors average $100 per day in expenditures) to premiums, student retention, or extra donations.
$3.61 million dollars (if visitors spend $200 per

Brand equity
Discussion intangible benefits are relatively high is not necessarily

negative; rather a signal that the athletics department
The institutional subsidies associated with college should give greater consideration to identifying
athletics in the US are often high, and are ultimately intangible benefits, communicating the difficulty
borne by the college’s constituents, most notably the in characterising intangible benefits in a monetary
students. In such cases, the university’s adminis- fashion. As an illustrative example, the GU athletics
tration must justify those expenses to its constituents. department must give greater consideration to those
The primary contribution of this paper is to provide additional (and currently intangible) brand equity
a parsimonious empirical framework in which those benefits it imparts, which might justify some portion
costs can be characterised. The methodology is (or the entirety of) its $3-5 million accounting profit
essentially one of hedonic evaluation, quantifying shortfall. Enrollment growth from outside the economic
the monetary value of those benefits that can be region will have the greatest economic impact on the
quantified, and examining whether those tangible school and the community. For example, the 239
benefits are sufficient to offset actual athletics full time students enrolled in 2007 represent a direct
department revenue shortfalls. The proposed university benefit of over seven million dollars in
methodology examines the most obvious of these new revenue. This growth was achieved even while
RESEARCH PAPER
tangible benefits, namely the economic impact of tuition and entrance standards were increased. In
the athletics department on the community’s local circumstances where such enrollment growth is either
economy. As illustrated in the accompanying case not an option or a goal (for example, when enrollment
study for Gonzaga University, these tangible economic capacity meets or exceeds current university infra-
impact effects can conceivably cover as much as half structure) brand equity can be used to enhance price
of this shortfall. premiums through tuition increases, decreases in
The use of a hedonic approach also allows for other financial aid, or shifting student enrollment to lower
sources of brand equity benefits to be incorporated into cost academic programmes (for example, education
the analysis. If existing tangible benefits do not cover programmes versus engineering programmes).
the accounting profit shortfall and require institutional Similarly, brand equity, whether tangible or intangible,
subsidies, other benefit sources can be identified and may be used to leverage new corporate partnerships
their monetary benefits quantified. In such cases, for joint training programmes (i.e. new experiential
those benefits move from the intangible to the tangible training sites) or for joint research collaborations
category. The utility of this approach is not for admin- (Friedman & Siberman, 2003).
istrators to conduct an exercise in revisionist history. While this case study analysis does not attempt
Rather, like all assessment activities, benchmarking to make estimates with a proper statistical basis (so
methodology is provided for university administrators properties of bias and efficiency are not discussed
to more fully document their activities and to make here), every effort is made to provide estimates that
a credible and transparent attempt to use monetary are as conservative as possible. Further analysis of
values in decision making. In other words, the fact that Table 1 also supports this contention. Much of the
institutions can find ways to make the economic profit institutional aid listed as an expense in Table 1 is
of an athletics department some non-negative number given in the form of scholarships. The marginal cost
is largely irrelevant. The value of this approach is to associated with providing scholarships is a small
provide a simple framework and an additional tool for fraction of this expense unless the school is already
administrators to better document and communicate at capacity and must add new fixed expenses, e.g.
what they do to their constituents. buildings or faculty. For example, the 1.5 million
An analysis indicating that an athletics department’s dollars of men’s basketball institutional support

Brand equity
includes 12 scholarships totaling almost $400,000 subtracted from, the actual costs of supporting the
in tuition. Furthermore, the tuition revenue from university’s athletics programmes. The difference is an
walk-on players or players on partial scholarship is estimate of the minimum additional dollar value of the
not included as part of the athletics department’s athletics programme’s brand equity. Estimating brand
revenue (although it is questionable whether many equity is critical in order for the university to make
players would still attend the school if they did not strategic and informed discussion regarding its athletics
receive an opportunity to compete). This potentially department.
misleading accounting requirement is exacerbated by Using the GU athletics department as a case study,
other athletics programmes where many more players the brand equity associated with the department is
receive only a small scholarship or no scholarship at approximately $5.8 million in 2006. Of this, between
all. While adjusting the numbers in Table 1 does not $617,000 and $2.71 million can be ascribed to a
make the tangible economic benefits associated with specific type of tangible brand equity (with the most
most collegiate athletics programmes positive, the plausible mean estimate being $926,000); namely,
intangible value required to justify continued subsidies the impact of GU athletics events on the economic
(from a variety of sources) is reduced by a considerable vitality of the local community. The remainder is
amount. attributed to intangible brand equity benefits, which
RESEARCH PAPER
are yet to be specifically identified and monetarily
assessed.
Conclusion While this paper presents some interesting findings,
the proposed methodology and/or its accompanying
Our study addresses some of the shortcomings found case study exhibit several limitations, and its results
in the current literature surrounding estimating the should be viewed with caution. For example, while
economic impact of athletics programmes. There is several potential sources of intangible benefits accruing
no shortage of studies estimating the economic value to a university beyond the traditional economic impact
of higher education institutions in general; however, on the local community were postulated, a paucity of
athletics programme brand equity benefits are typically information exists to characterise the monetary value
aggregated within institutional measures of economic of those benefits. As such, their magnitudes may
impact. In addition, investigators may be interested be significant or inconsequential. Without a means
in using methods designed to justify a decision that to accurately and precisely quantify major sources
has already been made or which people wish to make of brand equity, it is difficult to apply our proposed
in the near future, without concern for measuring methodology in a meaningful way and, by extension,
the specific contribution of an athletics department to generate a meaningful estimate of the brand equity
to institutional brand equity. Lastly, economic impact associated with collegiate athletics programmes.
studies frequently contain methodological flaws, Second, other universities may derive larger or smaller
such as the failure to exclude local residents or to brand equity benefits from different sources. For
incorporate local activities which would have otherwise example, land grant universities may derive relatively
occurred. more athletics-related brand equity from community
In this study, an empirical methodology is partnerships than from student recruitment and
proposed which avoids many of the shortcomings retention. In such cases, the value of the community
and biases contained in the current literature. As partnerships should be given primary emphasis.
many quantifiable sources of monetary cash flows Concomitantly, for small liberal arts colleges, the
and economic impacts (i.e. the tangible components economic impact of these universities may be less than
of brand equity) as possible are accounted for, and the retention effects, and so the latter should be given

Brand equity
more emphasis. Lastly, the current case study analysis Matthew McPherson is associate professor of finance
does not rely on an explicit statistical foundation and, at Gonzaga University. Dr. McPherson received
instead, relies solely on publicly available data sources his bachelor’s degree in finance, a master degree
and input-output modeling. Future research studies in community health education and a Ph.D. in
which use more sophisticated (and more accurate Economics from West Virginia University. His primary
and precise) methods of data collection and analysis areas of expertise are international finance, financial
will be able to generate more accurate and precise development, and healthcare finance.
estimates of tangible and intangible brand equity.

More sophisticated empirical techniques, in turn, will Daniel Friesner is associate dean for student affairs
facilitate more accurate and precise replications of our and faculty development, and professor of social and
general, five-step methodology across different colleges administrative sciences in the College of Pharmacy,
and universities. Nursing and Allied Sciences at North Dakota State
University. Dr. Friesner holds a Ph.D. in economics
© 2015 International Marketing Reports from Washington State University. His areas of
expertise are health economics, applied econometrics
and community economic development.
RESEARCH PAPER
Biographies
Nancy Chase is Associate Professor of Management
Carl S. Bozman is professor of marketing in the School Information Systems in the School of Business at
of Business Administration at Gonzaga University. He Gonzaga University, Spokane, Washington USA.
holds a bachelor’s degree in business administration, Prior to joining Gonzaga University, she worked in
a master degree in economics, and a doctorate degree information technology for over 20 years in the utility,
in marketing from Washington State University. His banking and state government industries. Her research
research interests include brand management, new interests include work exhaustion and burnout,
product development, and marketing metrics. He organisational behavior, the effects of IT culture on
teaches courses in integrated marketing communica- technology professionals and the impact of technology
tions and personal selling. on workplace environments.

Brand equity
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Gladden, J., Milne, G. & Sutton, W. (1998) A conceptual
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Cox, B. & Munn, I. (2001) A comparison of two input-output Greene, W. (2000) Econometric Analysis, 4th Ed. Prentice Hall:
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perceptions of the impact of sport sponsorship on brand equity:
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Brand equity
APPENDIX TABLE 1: Calculating the distribution of direct spending effects from aut-of-town visitor
PANEL A: CALCULATING DIRECT (MEAN)

EXPECTED EXPENDITURES FOR $100 PER DAY EXPENDITURES
FOOD AND
TYPE OF STUDENT $100 PER DAY TRANSPORTATION LODGING SHOPPING
BEVERAGES
FULL-TIME UNDERGRADUATES $740,134.62 $149,483.51 $456,891.76 $32,280.97 $106,992.38

FULL-TIME GRADUATES $241,645.68 $48,804.69 $149,170.05 $10,539.38 $34,931.82
TOTAL FULL-TIME STUDENTS $981,780.30 $198,288.20 $606,061.81 $42,820.35 $141,924.20
TOTAL UNDERGRADUATES $793,001.38 $160,160.90 $489,526.89 $34,586.76 $114,634.69
TOTAL GRADUATES $347,839.74 $70,252.50 $214,724.60 $15,171.03 $50,283.02
TOTAL STUDENTS $1,140,841.12 $230,413.40 $704,251.49 $49,757.79 $164,917.71
PANEL B: CALCULATING DIRECT (MEAN)
RESEARCH PAPER
FOOD AND
BEVERAGES
FULL-TIME UNDERGRADUATES $1,110,201.93 $224,225.26 $685,337.64 $48,421.46 $160,488.57
TOTAL FULL-TIME STUDENTS $1,472,670.45 $297,432.30 $909,092.72 $64,230.52 $212,886.29
TOTAL UNDERGRADUATES $1,189,502.07 $240,241.35 $734,290.33 $51,880.13 $171,952.04
TOTAL GRADUATES $521,759.61 $105,378.75 $322,086.90 $22,756.55 $75,424.53
TOTAL STUDENTS $1,711,261.68 $345,620.10 $1,056,377.24 $74,636.68 $247,376.57
PANEL B: CALCULATING DIRECT (MEAN)

FOOD AND
BEVERAGES
FULL-TIME UNDERGRADUATES $1,480,269.24 $298,967.02 $913,783.53 $64,561.94 $213,984.76
TOTAL FULL-TIME STUDENTS $1,963,560.60 $396,576.41 $1,212,123.63 $85,640.70 $283,848.39
TOTAL UNDERGRADUATES $1,586,002.76 $320,321.81 $979,053.78 $69,173.51 $229,269.39
TOTAL GRADUATES $695,679.48 $140,504.99 $429,449.21 $30,342.06 $100,566.03
TOTAL STUDENTS $2,281,682.24 $460,826.80 $1,408,502.98 $99,515.57 $329,835.42
All entries are measured in 2006 dollars.

Brand equity
APPENDIX TABLE 2: Calculating the distribution of direct spending effects from out-of-town visitors
PANEL A: CALCULATING DIRECT (MEDIAN)

FOOD AND
BEVERAGES

TOTAL GRADUATES $157,393.55 $31,788.46 $97,160.45 $6,864.72 $22,752.50
TOTAL STUDENTS $389,945.27 $78,756.47 $240,716.73 $17,007.46 $56,369.71
PANEL B: CALCULATING DIRECT (MEDIAN)

RESEARCH PAPER
FOOD AND
BEVERAGES
TOTAL GRADUATES $236,090.32 $47,682.69 $145,740.68 $10,297.08 $34,128.74
TOTAL STUDENTS $584,917.91 $118,134.70 $361,075.09 $25,511.19 $84,554.56
PANEL B: CALCULATING DIRECT (MEDIAN)

FOOD AND
BEVERAGES
TOTAL GRADUATES $314,787.10 $63,576.92 $194,320.91 $13,729.44 $45,504.99
TOTAL STUDENTS $779,890.55 $157,512.93 $481,433.45 $34,014.93 $112,739.42
All entries are measured in 2006 dollars.

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International Journal of Sports Marketing and Sponsorship

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Daniel Friesner This paper presents a simple methodological framework

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(otherwise the institution would not subsidise the net

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Step 3: Conduct an economic impact survey relatives of GU students) attended GU athletics

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CHART 1 Methodology for measuring brand equity

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CATEGORY MEN'S BASKETBALL TOTAL

REVENUES $3,265,226 $7,780,214

EXPENSES $4,177,973 $13,552,798

NET REVENUE WITHOUT INSTITUTIONAL SUPPORT ($912,747) ($5,772,584.00)

INSTITUTIONAL SUPPORT $1,521,562 $8,999,434

NET REVENUE $608,815 $3,226,850.00

(Albright et al, 2003). Implementing simulation methods within the context

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TABLE 2 Survey characteristics

PANEL A: SPORTING ATTENDANCE BY STATUS PERCENT PERCENT

TYPE OF STUDENT UNDERGRADUATE GRADUATE TOTAL UNDERGRADUATE GRADUATE

OUT-OF-TOWN SPORTS ATTENDANCE 96 19 115 83.48 16.52

NO ATTENDANCE 252 74 326 77.3 22.7

TOTAL 348 93 441 78.91 21.09

PCT. ATTENDANCE 27.59 20.43 26.08

PCT. NO ATTENDANCE 72.41 79.57 73.92

CHI-SQUARE TEST STATISTIC 1.95

PROBABILITY VALUE 0.16

TYPE OF STUDENT FRESHMEN SOPHOMORE JUNIOR SENIOR TOTAL

OUT-OF-TOWN SPORTS ATTENDANCE 19 24 28 25 96

TOTAL 83 84 102 79 348

CHI-SQUARE TEST STATISTIC 1.61

PROBABILITY VALUE 0.66

CHI-SQUARE TEST STATISTIC

PANEL C: AVE NUMBER OF DAYS

STATISTIC UNDERGRADUATE GRADUATE

MEAN 6.82 8.84

STD. DEVIATION 21.99 10.76

95% LOWER LIMIT 2.37 3.65

95% UPPER LIMIT 11.27 14.03

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TABLE 3 Gonzaga University enrollment

PANEL A: GONZAGA UNIVERSITY ENROLLMENT

CHART 1 Methodology for measuring brand equity

TABLE 2 Survey characteristics

TABLE 3 Gonzaga University enrollment

TABLE 4 Direct spending effects from out-of town visitors