For Sacramento State, visions of football glory clouded in fuzzy math

The USC football schedule this year starts with a vacancy. The Trojans plan to welcome an opponent to be determined to the Coliseum on Aug. 29, and Sacramento State would love to be that opponent.

“We’re trying,” Sacramento State President Luke Wood said Monday.

Wood announced last week that the Hornets had jumped into the Football Bowl Subdivision, the upper tier of NCAA Division I football, and what more glamorous way to make an FBS debut than against the most storied team in California?

Wood called the Hornets’ move to join the Mid-American Conference in football “a calculated business decision that would provide our university with the greatest possible exposure.”

However, the $975 million he trumpeted in economic impact over the next five years appears unsupported by a study from a consulting firm Wood thanked publicly, primarily because of its reliance on a metric dismissed by experts as flawed and outdated for more than a decade.

The metric is called advertising value equivalency (AVE), cited by Collegiate Consulting in its study as the basis for the lion’s share of the claimed economic impact: $600 million over five years from broadcast exposure. Sacramento State provided The Times with a copy of the study.

In a post on social media late Monday, Collegiate Consulting explained the figure Wood had instead announced for economic impact from broadcast exposure: $675 million over five years, citing what the firm said was the MAC average annual valuation of $135 million.

“You’re trying to put a dollar value on something you don’t easily have a price tag on,” said Holy Cross economics professor Victor Matheson, past president of the North American Assn. of Sports Economists.

Collegiate Consulting did not respond to messages seeking comment.

The premise of AVE is simple: An advertisement has a cost, so the value of publicity in any form — say, dozens of references to Sacramento State in a three-hour ESPN game — can be calculated in relation to the cost of an ad.

“The industry moved away from AVE a long time ago,” LINK said Sal Della Monica, executive vice president of strategic integration and marketing at Mike WorldWide, an international public relations firm. “It’s absolutely outdated, and not a real indicator of economic value.”

If someone sees Sacramento State on TV, that’s exposure. If someone then buys a ticket to a Sacramento State game, or enrolls at Sacramento State, that’s economic impact.

“We expect the exposure would generate revenue through corporate partners and ticket sales and merchandise, all those types of things,” Sacramento State athletic director Mark Orr said, “from national audiences seeing Sacramento State on their television.”

Said Matheson: “They’re conflating appearing on TV and losing 52-7 to Bowling Green with a targeted ad designed to actually bring people to Sacramento to spend money and spend tuition dollars. They are conflating just being on TV with actual advertising.”

Della Monica said today’s sophisticated metrics allow for economic impact to be traced to its source rather than broadly estimated in advance — for instance, if you bought a ticket based on a TV promotion that required a click to redeem.

Isn’t a televised football game in itself a three-hour advertisement for the school? Yes, but …

“We saw you on ESPN, and now we want to sponsor you?” Della Monica said. “That isn’t how sports sponsorships work.”

Even Russell Wright, the founder of Collegiate Consulting, acknowledged to CBS Sports that economic impact estimates by themselves are of limited use.

“Unless there’s something actionable after the fact it’s not really economic impact, it’s more economic valuation,” Wright said.

Wright told CBS that Wood’s $675 million estimate of broadcast-related economic impact was “not anywhere in our report.” (It’s not.) Wright also said Wood’s $975 million estimate of total economic impact mischaracterized the study.

Wood said he simply took the one-year estimate in the study and multiplied it to account for Sacramento State’s five-year agreement with the MAC. He said he was baffled by Wright’s comment.

“I wonder how that was asked of him,” Wood said. “Over five years is exactly what I said.

“I’m a professor. I’ve done economic impact studies. Multiplying that number by five years is perfectly appropriate.”

That adjective would not apply to a public skirmish between the president of the university and the consultant that conducted the study commissioned by the university.

Cal State campuses in Long Beach, Fullerton and Northridge dropped football to save money decades ago, and today each campus enrolls more students than Sacramento does. For Wood and Orr, the football upgrade in Sacramento nonetheless represents a play to increase enrollment — particularly from out-of-state students that pay higher tuition — and engage a region with almost 3 million residents and limited sports options.

“It’s us and the Kings,” Wood said.

UC Riverside, in a larger metropolitan area, also dropped football long ago but jumped into Division I and the Big West Conference for its sports in 2000. The school billed itself as the Inland Empire’s Division I home team, but community and donor support languished, and the basketball teams still play in a student-funded gym designed as a student recreation center.

Wood envisions crowds of 20,000 in a new or renovated stadium, at a cost estimated in the study from $171 million to $300 million. Sponsorship revenue is up 300 percent, Orr said – to $1.7 million.

Orr said the models are Boise State and James Madison, not USC.

What the Hornets want from USC is not a rivalry, just the $1 million or so the school would pay Sacramento State for what the Trojans would assume would be an easy win. The Hornets’ budget cannot work without those kinds of games, year in and year out.

There is a narrow but viable lane to success here, but the chances decrease as talk of profits and losses outpaces talk of wins and losses.

Sacramento State is running a deficit. The athletic department is paying $23 million over five years to move its football team into the MAC and paying travel costs for league opponents to play in Sacramento. Student fees and university funds subsidize intercollegiate sports; those two sources comprised 87% of Sacramento State’s 2024 athletic budget, according to Knight Center data. (The average figure for MAC schools: 66%.)

The skeptics only get louder with billion-dollar claims of economic impact.

“My usual rule of thumb is, move the decimal point one place to the left,” Matheson said. “But, man, when it comes to this advertising stuff, probably move it two or three.”

The way Wood sees it, it might be an audacious vision, but why not? Nowhere else in America can you find a media market so large with neither an NFL nor an FBS team.

“If we were in any other part of the country, what we are doing would not work,” Wood said.

In this one? Check back in five years. In the meantime, they’ll fight on, particularly for that USC check.