“2012 Olympic Games” by Flickr user Republic of Korea

Title(s): Quantifying the Social Impacts of Culture and Sport; Quantifying and Valuing the Wellbeing Impacts of Culture and Sport (two reports)

Author(s): Daniel Fujiwara, Laura Kudrna, and Paul Dolan.

Publisher: UK Department for Culture, Media & Sport

Year: 2014

URL: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/304896/Quantifying_the_Social_Impacts_of_Culture_and_Sport.pdf

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/304899/Quantifying_and_valuing_the_wellbeing_impacts_of_sport_and_culture.pdf

Topics: cultural engagement, sports participation, social outcomes, subjective wellbeing, cost savings

Methods: Regression analysis of survey data gathered between 2010 and 2011 among a nationally representative sample of 40,000 UK households (Understanding Society, Wave 2). Additional data in analysis drawn from British Household Panel Survey (Understanding Society survey predecessor with smaller sample size but more detailed income-related data).

What it says: The authors examine the relationship between sports and cultural participation and 1) various social outcomes, specifically measures of health, education, employment, and civic participation; and 2) subjective wellbeing (i.e., life satisfaction). They also estimate cost savings and financial values associated with the social and wellbeing impacts of sports and cultural engagement, which was defined by the following variables: participation in arts and cultural activities; attendance at arts and cultural events; participation in team and individual sports; and museum, heritage site, and library visitation.

Examining impacts on self-reported health, the authors found that those who participate in sports are 14 percent more likely to report good health than those who do not, whereas only 5 percent of art goers are more likely to report good health. Unlike arts attendance, arts participation (i.e., active modes of engagement) was found to have a negative association with health, although researchers suggest this could be attributed to reverse causality: the possibility that unhealthy people may be more likely to actively engage in the arts. Overall, the impacts of sports and culture on health were constant across gender, age, income, and geography, except the the impact of team sports on health was greater for younger people, and arts participation had more of an effect on health for older adults.

In terms of education, the authors examined the reported likelihood of 16- to 18-year-olds going into higher education (sample size of 900). There was a 14 percent increase in likelihood for those who participate in the arts, generally, and a 7 percent increase in likelihood for those who participate in swimming, which was the only sports variable to have a significant effect. There was a 13 percent increase in likelihood for those who attended dance events, and a smaller 8 percent increase in likelihood for those who actively participate in music. Given the smaller sample size, the authors did not examine distributional impacts across age, gender, etc.

The authors also examined the effects of sports and culture on job satisfaction and job search behavior. They found that participation in team sports is associated with an increase in job satisfaction, although this association only exists among people with high income. They found that participation in any sport is associated with an 11 percent increase in the likelihood of having looked for a job in the last four weeks. This figure was fairly similar for engagement in the arts (12 percent). The increase in the likelihood of looking for a job was slightly higher for people who participate in drama (11 percent) versus those who were members of an arts audience (8 percent). Those who participate in individual sports and those with higher incomes were 9.5 percent less likely to have looked for a job.

For civic participation, the authors examined correlations between sports and arts engagement and frequent volunteerism and charitable giving. They found that sports engagement is associated with a 3 percent increase in frequent volunteerism (defined as once every two weeks) whereas arts engagement (that is, both attendance and participation) is associated with a 7 percent increase. Participation in drama was more strongly correlated with frequent volunteerism (8 percent) than the next highest associated arts-related activity – attending an exhibition (3 percent). Increased charitable giving was twice as high among those who engage in the arts (£50 increase; although effects are modified by gender, with more charitable donations among men) versus those who engage in sports (£25 increase). Participation in drama was most strongly correlated with increased charitable giving (£83) than the next highest arts-related activity – attendance at dance events (£35).

As for wellbeing, the authors found that sports engagement, arts participation, and arts attendance all had a significant, positive association with life satisfaction. In particular, team sports and swimming had the greatest effect of all sports activities; drama and crafts produced the greatest effects within the arts participation category; and attending musical events and plays and visiting libraries were most effective of all attendance activities. Conversely, the researchers found that fitness and performing music had negative associations with life satisfaction. While there were few significant differences among different population groups, the report indicates that arts participation and individual sports’ positive effects on life satisfaction were larger for people over the age of 46.

Regarding cost savings and financial impacts, the authors looked at the association between self-reported health and use of medical services. Per person cost savings were highest for those who participate in sports (£98) versus those who attended arts events (£37). Arts participation had negative cost savings (-£32). It is important to note that these preliminary estimates do not consider other behavioral factors that may offset health benefits, such as quitting smoking, which may lead to weight gain. The authors then roughly estimated increases in lifetime earnings associated with sports and cultural engagement, which was highest for dance attendees (£56,400) and lowest for swimmers (£26,800). The authors also estimated monetary values (i.e., how much money one would need to derive wellbeing impacts) for arts and sports-related variables with statistically significant wellbeing impacts. The highest values were attributed to participation in dance (£1,671, per person, per year), swimming (£1,630), and library visits (£1,359). Assuming a twice-per-week engagement in sports, the authors estimate an annual value of £1,127 and a per-activity value of £11. For the arts, based on average engagement of 15 to 20 times-per-year, they estimate an annual value of £935 and per-activity value of £47.

What I think about it: The authors control for as many factors as possible using regression analysis, but acknowledge that they cannot fully attribute causality. Prior to conducting these analyses, the authors conducted a literature review to 1) ensure there was existing evidence of positive associations between sports and culture and, for example, improved health outcomes and volunteerism; and 2) determine what to control for in their analyses, which was fairly comprehensive. Also, the analyses seem particularly strong given the large, representative sample. It is important to note that the income data from the British Household Panel Survey and data from the Understanding Society survey come from different time periods, so impacts that may have changed over time are not accounted for in these analyses. In addition, Understanding Society data does not indicate the frequency of respondents’ participation in specific sports and cultural activities (e.g., fitness, swimming, music, dance). Rather, they derive a per-activity value for sports and cultural engagement, generally. In actuality, these values may vary based on the specific activity.

What it all means: Both reports indicate there are strong correlations between sports and cultural engagement and social impact – e.g., arts attendance and improved health; arts participation and volunteerism – and life satisfaction. Although these are not causal relationships, the analyses are useful for determining appropriate policy interventions, including estimating the costs and benefits associated with such changes and in comparison to other areas of leisurely engagement. Indeed, these reports could be helpful in allowing government to determine how best to allocate public dollars. The wellbeing valuation seems more fitting than use of market data (or preference-based valuation) since it examines the impact of a range of factors on wellbeing, including the income needed to achieve particular impact. As the researchers suggest for the future, issues of causality should be addressed through use of experimental methods, such as random assignments for sports and culture engagement, to single out effects and perhaps establish a control group with which to compare results.

Indianapolis’s Lucas Oil Stadium | photo by Just_Bryan

The U.S. has now entered an era of extremely expensive sports stadiums: the new Barclays Center in Brooklyn, NY cost a cool billion dollars for example,while the new Vikings stadium in Minneapolis, MN is anticipated to be similarly priced. While reading up on the professional sports billion dollar building boom I couldn’t help but notice a number of parallels to the building boom in the arts from 1994 to 2008, as studied and documented by the University of Chicago’s Cultural Policy Center.

But does new and big automatically lead to better for an organization and its patrons? For a large renovation or construction project to succeed, certain parameters and rationales have to be put in place from the beginning, such as a clear connection to the mission of the organization and strong, continuous leadership throughout the life of the project. Yet time and time again, it seems that these large capital campaign projects are launched without any adherence to methodologies that have previously led to success.

As Dane Stangler points out at Growthology, renovations to old stadiums or the construction of brand new stadiums often result in more costs than benefits for the communities in which they are housed. These new, large-scale projects come with promises of low real expenses  to local governments, as with the stadium in Indianapolis which officials promised could be paid for through a negligible tax hike. In fact, cities often construct generous, even risky, debt structures in order to help underwrite these structures, despite the fact that there is not a definite assurance of profit, or even repayment. The Atlanta Journal-Constitution notes that “unrealistic revenue projections and the skyrocketing construction cost of sports stadiums, especially football behemoths, is making it increasingly hard for the facilities to generate enough cash to keep pace with expenses, namely debt service.” This can result in higher ticket prices, higher taxes, and depleted services for consumers and non-consumers alike. Stangler notes that public subsidization of stadiums often shifts costs from wealthy owners and players to visitors and tourists, who may not even be visiting the city for sports-related reasons.

In spite of the obvious negatives, legislators and franchise owners argue, perhaps rightfully so, that they need state-of-the-art space to attract talent and remain competitive. That argument sounds awfully similar to those made by nonprofit arts organizations when they decide to undertake expansion projects. New buildings, like Taubman Museum of Art’s new facility, come with enormous costs and can force already cash-strapped organizations to take on more debt and risk the sustainability of the entire organization.

During the boom years, many museums and cultural institutions wanted to take advantage of the deep pockets of their big donors and take on large infrastructure projects. According to the University of Chicago Cultural Policy Center study cited above, this led to significant “overinvestment during the building boom—especially when coupled with the number of organizations that experienced financial difficulties post-building.” Much like their for-profit counterparts, cultural institutions were overly optimistic about the positive returns their efforts would have—yet four-fifths of the projects studied ran over budget, often by significant amounts. This type of development will often alter the business plan for the expanded institution to pay for the increasing expenditures and higher operating cost.  However, the consequences for arts organizations that overextend themselves are often much more dire than for NFL teams that generate billions of dollars in revenue. When is the last time you heard of a sports franchise closing up shop because it was no longer able to sustain itself?

That said, there are examples of cultural institutions that manage an expensive physical expansion and resulting fundraising campaign in ways that not only benefited the organization by helping it to further execute its mission and better serve its constituents. One example cited by the Nonprofit Finance Fund is the Steppenwolf Theater in Chicago, IL. Part of the reason the Steppenwolf has been able to sustain itself in spite of a large real estate purchase is that the institution understood that the real estate itself would not be the main income generator. Instead, as the organization grew physically, it sought out diverse revenue streams, from individual contributions to corporate giving, in order to support this expansion.

At the end of the day, professional sports generate a huge amount of revenue from a variety of sources (broadcast rights, apparel sales, concessions, ticket sales, etc) and public officials are dazzled by the dollar signs–in 2012, professional sports leagues generated roughly $24.7 billion in revenue. That is with one league being on strike (the National Hockey League) and not playing games for most of a season. Many are desperate to get a piece of that fiduciary pie by whatever means necessary. By contrast, the power dynamic is flipped when it comes to cultural institutions; they have to pitch the value of investment and advertising to their funders, not the other way around. I believe this is why cultural institutions are often left “holding the bag,” scrambling to cover the cost of ambitious expansions as opposed to sports franchises, who are often able to walk away from fiscal disasters of their own making.