Outback Bowl director's pay approaches $1 million

TAMPA -- Look around the Tampa Bay area, and it's hard to find an economic development executive, public official or nonprofit leader paid more than Outback Bowl president Jim McVay.

In 2015, McVay's compensation totalled $993,458, according to the bowl's IRS tax return for that year.

That's more than the salaries for top executives at the University of South Florida, Port Tampa Bay and Tampa International Airport.

It's more than Tampa taxpayers pay the mayor, the seven members of City Council, the police chief and the fire chief -- combined.

As the bowl's CEO for 30 years, McVay, 63, is the longest-tenured bowl director in the country, and bowl organizers say he delivers value for the money:

• Securing the same title sponsor for 23 years, longer than any current college bowl game.

• Staging a game that over the last five years has filled an average of 16,800 hotel rooms in Hillsborough County alone.

• Showcasing the bay area in a game televised nationally and internationally.

• Generating an estimated economic impact -- though the figure strikes two sports economists as too high -- of $30 million a year.

Still, when former Tampa Mayor Sandy Freedman saw a short news item recently about McVay's salary, she said it was "beyond belief."

McVay is a nice man and runs a good operation, she said, but she questions whether his board of directors pays him too much when it could pay for public services donated to the bowl by the cities of Tampa and Clearwater and give more money to charity.

"It just seems to me to be awfully extravagant to pay someone close to a million dollars to run a bowl game," she said. "It's kind of galling."

Hillsborough County Commission chairwoman Sandra Murman, who is also the incoming chairwoman for the Tourist Development Council, was surprised to learn McVay's salary.

"Omigosh," she said. "Nine hundred thousand dollars is a lot of money, and I guess we all have to ask the question if any of those dollars paid to him are coming from the public support, because we're all being held to a higher standard."

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This year's Outback Bowl pits Michigan against South Carolina at noon Monday at Raymond James Stadium.

Most public support for the bowl comes from the tourist development tax on hotel room rentals.

Pinellas County contributes $150,000 in bed tax revenues. Hillsborough County contributes $120,000 through Visit Tampa Bay and the Tampa Bay Sports Commission.

That's appropriate, McVay said, since the bed tax is collected to support activities that bring visitors and help fill hotel rooms.

Tampa also donates nearly $50,000 worth of police, public works, solid waste and other services for the bowl's Ybor Bowl Blast today. Clearwater contributes $5,600 in services for the bowl's annual beach day, held Saturday.

Overall, the bowl's budget was about $12 million in 2015. The largest sources of revenue were television rights and ticket sales, which accounted for about $4.1 million and $3.9 million respectively, followed by $2.3 million from sponsorships.

McVay said comparing his job to those of executives at other nonprofit or public sector jobs focused on economic development is "apples and oranges" because of the differences in the markets and required skill sets.

With five full-time staff members who work year-round, the Outback Bowl punches well above its weight, organizers say, compared to corporate powerhouses like ESPN, which owns 14 bowl games, including the Bad Boy Mowers Gasparilla Bowl at Tropicana Field, and the New York Yankees, San Francisco 49ers and Detroit Lions, all of which host their own college bowl games.

Other bowls, McVay said, pay third parties to negotiate TV deals and agreements with the participating NCAA athletic conferences.

At the Outback Bowl, McVay handles those negotiations himself, drawing on three decades of experience, plus relationships he built at previous front office jobs with the Tampa Bay Buccaneers and the United States Football League's Tampa Bay Bandits.

"This stuff doesn't run on automatic pilot, and the funding to make this work isn't delivered by the Tooth Fairy," McVay said. "Somebody's got to go get it and .?.?. have the relationships with the title sponsor, the networks, the conferences, the schools, and have the football expertise and the background in the NFL."

The bowl's unpaid board of about 25 local executives and community leaders makes decisions about pay.

"This is a responsibility the personnel committee takes very seriously" because its decisions "impact very valuable assets of the Outback Bowl," the bowl told the IRS in 2015. "Many resources, such as the Ernst & Young football bowl association compensation survey, are utilized."

McVay's base compensation in 2015 was $432,735. Bonus and incentive pay added another $426,750. The bowl's tax return said McVay's compensation included commissions on sales generated for the bowl.

In comparison, a recent USA Today survey put the average pay for 18 top bowl executives at $490,000 in 2015, with the head of the Cotton Bowl bringing in a record $1.2 million. McVay came in at No. 2 on the USA Today list.

In return, organizers say the Outback Bowl has generated $1 billion for the local economy since it was established, originally as the Hall of Fame Bowl, in 1986.

It also gives about $6.5 million a year to the Big 10 and the SEC for sending teams to the game. With Monday's game, its total transfers to university conferences will top $140 million.

The bowl is in the third year of an initiative to help local charities. In 2015, it reported to the IRS that it gave $100,000 to 14 local charities, but listed specific gifts to seven: $10,000 each to groups such as the Boys & Girls Clubs of Tampa Bay and Special Operations Warriors Foundation, and $7,500 to Clearwater for Youth athletics.

Organizers say 35 local charities received $200,000 last year and the bowl is on track to give at least $200,000 this year.

• • •

The bowl's estimate of $30 million per year in economic impact goes back to 2001.

That's when the bowl commissioned a Tallahassee marketing research firm that surveyed 465 bowl visitors about their spending.

Four-fifths came from outside Pinellas and Hillsborough counties, according to the study's author, Mark Bonn, a professor at the Dedman School of Hospitality at the Florida State University College of Business.

The average visitor came in a party of nearly six and stayed an average of about three nights. Each party spent an average of about $552 per day.

Visitors and the bowl itself spent an estimated $19 million directly. Once Bonn factored in a 1.5 multiplier to model the circulation of money as it was spent and re-spent locally, the economic impact reached nearly $29 million. He estimated local residents chipped in another $1.8 million in bowl-related spending.

The study's methodology was "fairly good" in its addition and multiplication, said sports economist Victor Matheson, but did not address two factors that subtract money from events' economic impact.

One is what economists call "leakage." Yes, visitors swipe their credit cards for hundreds of dollars of hotel room charges, but a lot of that money goes to corporate headquarters outside the Tampa Bay area. And while hotels may raise their room rates during a period of high demand, they don't raise wages for desk clerks or cleaning staff, too.

"That money doesn't stick in local pockets," said Matheson, a professor of economics at the College of the Holy Cross in Massachusetts.

"It leaves the local community before the kickoff," University of Chicago economist Allen Sanderson said in an email.

The second factor not addressed was displacement, or the way special events can crowd out normal business activity.

The Outback Bowl doesn't bring visitors on just any day in December, Matheson said. It brings them on New Year's Eve, a day when more people book hotel rooms and many restaurants are already very busy.

Having a lot of visitors in town could crowd out some local businesses' normal customers -- a University of Tampa economist measured this at bay area bars and restaurants during the Republican National Convention in 2012 -- thus replacing or even depressing what would be normal spending.

Bonn said the contract for the bowl study did not cover the higher cost of factoring displacement or leakage into the analysis, and that economic impact studies his firm does for clients don't go into the same level of detail that a scholarly academic study would.

Sanderson cautioned against putting much weight on a study commissioned by an organization with a vested interest in the topic.

"Never ask a barber if you need a haircut," he said. "If you take the amount of the purported economic impact and move the decimal point one place to the left, it's probably a reasonable NET figure."

But Hillsborough County Hotel and Motel Association executive director Bob Morrison said Outback Bowl visitors add more business than they crowd out. That's because they don't just come for New Year's Eve, but for several days around the game.

"That's a plus," he said. "Our hotels have come to see the Outback Bowl experience as being a critical part of their December projections. The value rests in the multiple-day stay associated with Outback Bowl teams, guests, television crews and other media."