Funding of Sport Test 4t

Feasability Study

An evaluation and analysis to determine whether your business idea makes sense and is profitable

How are feasability studies different from business plans?

A feasability study aims to flesh out the possibilities in a business idea while a business plan describes the company, goals, strategies and forecasts

Business Plan

Describes the company, its goals, strategies and forecasts

Questions to Be Answered by Feasability Studies

Is a project likely to be sensible and successful, is it practical, how will it be financed,

Phase 1 of a feasability study

Tests whether a more in-depth analysis should be underaken

Which phase of a feasability study is based on secondary sources of information and is quicker to complete?

Phase 1

Phase II of a feasability study

Lays out a specific financing plan, actual site selection, facility design details and renderings, a market deman alaysis, primary research on economic impact

What are the parts of a feasability study?

Market demand analysis, location, costs and engineering analysis, financing analysis, economic and fiscal impact

Market Demand

Drives the rest of the feasability study and is a part of phase 1

What does market demand analysis determine?

If there is enough demand to justify a project

Subsections of a Market Demand Analysis

Individual ticket demand, corporate demand, event activit, facility specifications and operating estimates

Estimating Ticket Demand

Comparable analyses of demographic and lifetyle information

Estimating Corporate Demand

Corporate depth analysis, suite and seat revenue potential, naming rights and other sponsorship revenue

Estimating Event Activity

Competitive analysis of facilities

Estimating Facility Specifications

Facility size and ticket return, concessions, merchandising, parking

End Result of a Market Demand Anlysis

An estimate of future quantities sold and pricing

Other Elements of a Feasability Study

Financing, location, construction costs, engineering

Economic Impact

The net economic change in a community resulting from spending that can be attributed to an event or facility

What do economic impact analyses learn the impact of?

Sporting events, the team itself, facilities

Who do economic impact analyses learn the benefits of?

Community, positive externalities, psychic impact

Geographic area of impact

Differing definitions of the geographic area affect the amount of economic impact that is measured

Displaced Spending

Spending by local residents on an event that would have been spent elsewhere in the local economy if the event had not occurred

Types of Visitors

Casual visitors, time-switchers, inceremental visitors

Casual Visitors

Visitors who were already in town for another reason and decided to attend the event

Time-switchers

Visitors who would have come to town at another time, but opted to come during this time instead to attend the event

Incremental Visitors

Visitors who came to town because of the event and would not have come to town otherwise

Which type of visitor accounts for the highest percentage?

Incremental Visitors

Methodologies for measuring economic benefits of an event

Spending and Fiscal/tax impact

Spending Methodologies

Direct and indirect

Indirect Economic Impact

Ripple of spending that results from an event

Induced Economic Impact

Effect of direct and indirect economic impacts on earnings and employment

Multiplier

Measures the change in output for an industry as a result of injection of $1 of direct impact to that industry

What does a study need to be complete?

An analysis of costs

How to measure economic impact of a team

View the team as a series of events and measure the impact of the team as a local business

Economic Impact of a Facility

Operations and construction impact

Underestimating Economic Impact

Hard to account for all corporate-related spending, studies may miss visitors in town for an event but don’t attend, locals may spend more than usual

Overestimating Economic Impact

Analyses don’t account for reverse time-switchers, loss of other visitors due to full hotels