Question about TCF Finances

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GopherLady

GopherLady

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Ok - so it's obvious that we won't be getting any money from liquor. I have an honest question - and maybe there was some article that already addressed this - but when is TCF expected to make money? Obviously, it's not only great for campus and attendees, but now that we're getting the money for everything and it's going to generate a lot of revenue. When is it expected to make enough money to make up for the loss (building costs, debt, etc). I was just wondering, I'm guessing it will be pretty soon. Does anyone have any information on this cost-benefit timeline?
 

GopherLady said:
Ok - so it's obvious that we won't be getting any money from liquor. I have an honest question - and maybe there was some article that already addressed this - but when is TCF expected to make money? Obviously, it's not only great for campus and attendees, but now that we're getting the money for everything and it's going to generate a lot of revenue. When is it expected to make enough money to make up for the loss (building costs, debt, etc). I was just wondering, I'm guessing it will be pretty soon. Does anyone have any information on this cost-benefit timeline?
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don't know all of the facts and figures, but the impact the MN legislature likely caused by hindering premium seating sales due to their mis-guided alcohol bill will certainly cause the timeline to get much longer for the U of M to actually begin making any money on TCF.
 

GopherLady said:
Ok - so it's obvious that we won't be getting any money from liquor. I have an honest question - and maybe there was some article that already addressed this - but when is TCF expected to make money? Obviously, it's not only great for campus and attendees, but now that we're getting the money for everything and it's going to generate a lot of revenue. When is it expected to make enough money to make up for the loss (building costs, debt, etc). I was just wondering, I'm guessing it will be pretty soon. Does anyone have any information on this cost-benefit timeline?
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Good questions to which I have zero answers. :) A related q...is the U required to pump all the revenue back into paying the debt or can they funnel a portion of it towards the Athletic Dept's coffers?
 

It's going to generate revenue but it's also going to generate operating costs and expenses.

It's hard to say when it will reach buyback, but I wouldn't trust any figures either the state or the University provides. Hopefully Forbes or someone like that will do an independent analysis.
 

Well, my understanding is that the U has very little to cover in terms of debt payments. The state provided a little under half the cost of the stadium from the land swap deal. Therefore, the state is on the hook for this portion of the debt (bonds that the state will pay off). The U portion of the stadium cost was largely through donations, naming rights, and student fees. However, I believe they still have to come up with the extra $40M or so to cover the improvements they added late in the design process. That being said, the stadium should be pumping additional revenue into the Athletic Department very soon. Someone else who has more intimate knowledge of the details can comment but this is my general understanding.
 


Khaliq said:
It's going to generate revenue but it's also going to generate operating costs and expenses.

It's hard to say when it will reach buyback, but I wouldn't trust any figures either the state or the University provides. Hopefully Forbes or someone like that will do an independent analysis.
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forbes?! :eek:

isn't that the same publication who called kevin mchale the best GM in the NBA?!?!

forbes.......please......i hope you were being sarcastic
 

koppco1 said:
Well, my understanding is that the U has very little to cover in terms of debt payments. The state provided a little under half the cost of the stadium from the land swap deal. Therefore, the state is on the hook for this portion of the debt (bonds that the state will pay off). The U portion of the stadium cost was largely through donations, naming rights, and student fees. However, I believe they still have to come up with the extra $40M or so to cover the improvements they added late in the design process. That being said, the stadium should be pumping additional revenue into the Athletic Department very soon. Someone else who has more intimate knowledge of the details can comment but this is my general understanding.
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Doesn't the U have to pay back the bonds?
 

The U wasn't going to generate loads of revenue from the stadium (extra 3-5 mil per year?) and with the reduction in pricing for premium seating and the loss of revenue in alcohol...the Gophers will still be near the bottom in the Big Ten in football revenue and athletic department budget.

The main benefit is recruiting and the revenue that could come with a successful football program....donations, merch, advertising, etc.

The 2nd benefit of course being a real college football experience.
 

Maximus said:
The U wasn't going to generate loads of revenue from the stadium (extra 3-5 mil per year?) and with the reduction in pricing for premium seating and the loss of revenue in alcohol...the Gophers will still be near the bottom in the Big Ten in football revenue and athletic department budget.

The main benefit is recruiting and the revenue that could come with a successful football program....donations, merch, advertising, etc.

The 2nd benefit of course being a real college football experience.
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This is complete BS. Parking, concessions, and suites. I have zero doubt this won't bring in significantly more money.

There are operating costs and some debt left to pay, but I can't agree with your statement.

Parking alone will bring in millions that did not exist before.
 



The state is obviously paying off the bonds on thier portion, otherwise it wouldn't really be the state funding, it would be just be the U borrowing thier credit card. It was always my understanding that the U was paying up front for most of thier portion with donations, etc. So if all they have for 'debt' is the $40 million in over-runs, that would only be a $2-3 million a year assuming they bond it out over 30 years. If so, they should see some additional revenue in the athletic department immediatly.
 

anticallihan said:
Parking alone will bring in millions that did not exist before.
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I don't know about "millions," at least on an annual basis, but it will certainly generate revenue for the U. I don't believe that money goes to the athletic department, however. I think it goes to Parking and Transportation Services or whatever it is called.
 

If 10,000 parking spots were bought at $100 a spot for the season, that is $1M. Not hard to imagine "millions" is the range we could be talking about.
 

RailBaronYarr said:
If 10,000 parking spots were bought at $100 a spot for the season, that is $1M. Not hard to imagine "millions" is the range we could be talking about.
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I don't think anywhere near that many spots were sold though.
 



Put it another way. 7 games times $15 a game times 10,000 cars gets you to over a million. I think its a pretty reasonable assumption that at least 10,000 cars will need parking spots for a stadium that seats over 50,000. I used $15 as thats the middle of the pack parking rate. Additionally, there are very few private lots around campus.
 

2nd Degree Gopher said:
I don't know about "millions," at least on an annual basis, but it will certainly generate revenue for the U. I don't believe that money goes to the athletic department, however. I think it goes to Parking and Transportation Services or whatever it is called.
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I believe you are right however that the parking revenue or atleast a lot of it goes to the Parking and Transportation Services department and not to the Athletic Department, which in fairness it should as they will be the ones in charge of maintaining the lots.
 

GoAUpher said:
I don't think anywhere near that many spots were sold though.
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Not upfront. But they will be sold. Westbank/St.Paul.

I sent an email to Maturi inquiring about the additional spots that appeared to be remaining, and he insisted most spots were sold around the stadium.

Also it won't be 4 people per car in this stadium. I am guessing 42,000 people will be traveling from off campus. Every spot the U owns will be virtually sold out. Most of them at more than 10 bucks per spot.

My point was originally... they are going to make a lot more money off this stadium than the dome. It is much more than coming back on campus. Besides what they are paying vendors, every dime they can capture (minus booze) will be brought into the athletic department. Also think of all the licensed tailgating gear that will be sold. I will be really interested to see how much tailgating steps up. Right now the U of MN is pretty amateur in this respect, but it has been growing.
 

GopherGod said:
I believe you are right however that the parking revenue or atleast a lot of it goes to the Parking and Transportation Services department and not to the Athletic Department, which in fairness it should as they will be the ones in charge of maintaining the lots.
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Has this been decided? I can't imagine they can lay claim to this money since Saturday parking revenue will go from thousands of dollars to hundreds of thousands of dollars. I don't think I prepaid my parking fees to P and T. It just doesn't make sense.
 

anticallihan said:
Not upfront. But they will be sold. Westbank/St.Paul.

I sent an email to Maturi inquiring about the additional spots that appeared to be remaining, and he insisted most spots were sold around the stadium.

Also it won't be 4 people per car in this stadium. I am guessing 42,000 people will be traveling from off campus. Every spot the U owns will be virtually sold out. Most of them at more than 10 bucks per spot.

My point was originally... they are going to make a lot more money off this stadium than the dome. It is much more than coming back on campus. Besides what they are paying vendors, every dime they can capture (minus booze) will be brought into the athletic department. Also think of all the licensed tailgating gear that will be sold. I will be really interested to see how much tailgating steps up. Right now the U of MN is pretty amateur in this respect, but it has been growing.
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To clarify, I thought RailBaron was saying that 10K spots had been sold to season ticket holders. Unless they change the published plans, only STP lots will go up for gameday sale. I don't think every spot the U owns will be sold (they can't be if the current policy is followed) but I'd agree that plenty of STP spots should be sold for gameday.

There is no question that TCF will generate MUCH more revenue then the Dome ever did.
 

anticallihan said:
Has this been decided? I can't imagine they can lay claim to this money since Saturday parking revenue will go from thousands of dollars to hundreds of thousands of dollars. I don't think I prepaid my parking fees to P and T. It just doesn't make sense.
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I'm not sure if anyone knows definitively. I remember hearing that P&T was pushing to get the money several months ago on this board and its popped up during subsequent parking discussions. Whether this is true or not I do not know.
 

I think the stadium will generate more revenue, but there will also be significant cost increases as well. There will be maintenance, there will be additional staff people in charge of stadium operations, there will be utilities and the like. The Gophers weren't responsible for most (or any) of that at the dome.

The stadium is going to help, but it's not going to be a money tree.
 


GopherGod said:
Take it for what it is worth but on this site it states that parking revenue will go to parking services.

http://football.ballparks.com/NCAA/Big10/Minnesota/newindex.htm
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It's a Scoggins article so I'd say its pretty reliable. Good find. Sounds like not all the money will go to P&T but that the $$$ that don't will go to debt. Also notes that the stadium should net the U an estimated $12 million more a year (this was before the alcohol related rebates of course).
 

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