STrib: Gophers athletics department juggles mix of debt vs. revenue

BleedGopher

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per Megan:

With bigger and bigger piles of money pouring in from Big Ten Conference revenue sharing, the Gophers athletics department showed a $9.8 million profit last year, more than a fourfold increase from the previous year.

But a deeper look at the budget explains the department’s increasing unease from sagging attendance and hefty debt service payments for their upgraded facilities.

To avoid relying on one major source of revenue from the Big Ten, the Gophers have taken serious steps to revive their deflating ticket revenue in their three revenue-generating sports: football, men’s basketball and men’s hockey.

This spring, the Gophers slashed some of their season-ticket prices in men’s basketball and hockey, while proposing the sale of alcohol to all patrons at Williams Arena and 3M Arena at Mariucci.

The Board of Regents is expected to pass the alcohol measure next week. Several regents spoke in support of alcohol sales at last month’s meeting, saying they hoped it would sell tickets and build attendance as well as bring in more than a projected quarter-million dollars of revenue.

University leaders are hopeful these measures will enhance the department’s bottom line before the conference cash runs dry.

“Athletics, like all units of the university, is under budget pressure,” outgoing University of Minnesota President Eric Kaler said. “But Mark [Coyle, athletic director] has been very strategic and thoughtful about ticket pricing, the discussion of providing alcohol. … He’s laser-focused on getting to a balanced budget every year.”

More money, more problems

The Big Ten re-upped its national TV deals two seasons ago, infusing more than $2.5 billion into the conference through those six-year contracts. So after raking in $23.4 million in Big Ten media rights revenue two years ago, the Gophers saw their critical share grow to $41 million last year.

University CFO Brian Burnett said while the additional revenue is “certainly welcome,” the fact the conference distributes it to every school only increases the competition and expectation. Schools can use the funds to start new facilities projects or make coaches’ salaries more competitive, for example.

The Gophers have used much of the increase, though, to pay off a combination of football coaching severance payments and the department’s debts from building new facilities.

The department received a loan from the university in 2017 for about $6.8 million to assist with the football coaching transition of firing Tracy Claeys to hiring P.J. Fleck with payments to those coaches and their assistants.

The athletic department repaid the loan last year, so that comes off the books. But this happens just in time for the debt service payments — outstanding loans from the university, plus interest — to nearly double.

The Gophers also paid about $6.8 million last year toward the debt service for TCF Bank Stadium and other facilities projects, such as the new scoreboard at 3M Arena at Mariucci. The department will continue to make payments on the football stadium until 2034.

And next year, the department will begin repaying the university $6.1 million a year for the “Nothing Short of Greatness” facilities campaign that includes the athletes village. The full project cost $190 million, and the department has raised $134 million of that total so far.

The department still aims to fundraise that entire total. Meanwhile, of the athletic department’s $125 million budget, about 10% goes to paying off debts.

http://www.startribune.com/gophers-athletics-department-juggles-mix-of-debt-vs-revenue/510895082/

Go Gophers!!
 

I read the whole article and I find it strange that alcohol sales are seen by some as a sort of magic bullet to gain more attendance. Alcohol sales are always described as a center piece of the efforts to regain basketball and hockey ticket sales. Yet, the football attendance decline came AFTER alcohol sales were allowed stadium-wide. Of course the real reason there was the scholarship seating donations but yet again, the StarTribune failed to mention it, for the bazillionth time in an article talking about attendance.

At any rate, based on what I have seen in the football stadium, I don't think alcohol sales are a bad thing but I certainly don't think the basketball and hockey arenas will see much of an attendance bump by adding it.
 

I'd change some things about how the U does things, but that is no easy job.
 


The Board of Regents is expected to pass the alcohol measure next week. Several regents spoke in support of alcohol sales at last month’s meeting, saying they hoped it would sell tickets and build attendance <b>as well as bring in more than a projected quarter-million dollars of revenue.</b>

Wait! They are factoring in concessions revenue into their evaluation? Nonsense. Don’t they know not everyone is required to buy concessions?


Sent from my iPhone using Tapatalk
 


"I don't buy tickets to Gopher basketball. the seats are too expensive."

"hey, did you see they're going to sell beer at games?"

"Wow. that changes everything. If I can drink, the ticket prices suddenly are not a problem."

I don't see alcohol driving ticket sales. The additional revenue will be from selling alcohol to the fans who are already at the games. They might sell a few extra tickets because of alcohol - but if you cannot make it through a 2-hour game without a drink, you likely have other issues. (says the guy who used to smuggle booze into movie theaters......tube socks and pint bottles in the boots....)
 

Coyle in an interview with JG on the coaches caravan said he’s excited about the ticketing changes for basketball & hockey and after this next season they will re-evaluate football for the following year.

Below is the Apple Podcast link I was referencing.

https://podcasts.apple.com/us/podcast/gophers-on-demand/id1254616492?i=1000440592384

forgive me if I do not share Coyle's excitement. When this is "looked at" for football, a few upper deck corner seats will be reduced and mine will either not change at all or if they do, ticket prices will be reduced while donation amounts will be raised by the exact same amount for a net change of $0.
 

"I don't buy tickets to Gopher basketball. the seats are too expensive."

"hey, did you see they're going to sell beer at games?"

"Wow. that changes everything. If I can drink, the ticket prices suddenly are not a problem."

I don't see alcohol driving ticket sales. The additional revenue will be from selling alcohol to the fans who are already at the games. They might sell a few extra tickets because of alcohol - but if you cannot make it through a 2-hour game without a drink, you likely have other issues. (says the guy who used to smuggle booze into movie theaters......tube socks and pint bottles in the boots....)

Well if they are lowering ticket prices AND selling beer that may move the needle. You are also looking at it as 1 "2 hour experience". Perhaps there just some games as a season ticket holder fans may want a beverage, especially Friday & Saturdays, or if the tickets are being used to entertain clients.

Take Gopher hockey for example, 20 games either on Friday, Saturdays or holidays. If I was considering buying season tickets, this would for sure influence my decision. Any one game, sure I can "make it through a 2-hour game without a drink", but if offered one I will partake.

Hockey without beer? How un-North American. It's worse than bowling without beer.
 

IN the end, aren't we all trying to juggle our debt and our revenue?
 



IN the end, aren't we all trying to juggle our debt and our revenue?

HoustonTXGopher throwing down the thoughts.

Woman-Deep-in-Thought.jpg
 

They are competing with people staying home to watch it on TV because the experience is better at home. No lines, cold beer, can see the replays etc. Allowing beer may be the difference for some to go to the game rather than stay home or watch it out at a bar. That doesn't mean they have a drinking problem as some others have suggested. I think especially with the students they could draw more fans to the game now.
 

I'm not suggesting anyone has a drinking problem. More of a bad joke on my part - being as how I am an admitted alcoholic. (sober since 1986)

My point was that I just don't think beer is going to make a big difference in attendance. MN fans are very price-conscious. If you want to have a beer while watching the game, you can do that a lot cheaper at home or even at a bar. The alcohol sales will generate extra revenue from the people who are already buying tickets.

Look, I may be dead wrong - maybe alcohol at the games is enough of a reason for some fans to decide to attend in person. But, I suspect that any gain in attendance - solely due to alcohol - will be minor - maybe 2 or 3% at best. If they combine alcohol with other incentives - including ticket deals - then that might make a bigger difference.

But, people are staying away from Gopher games for a variety of reasons. Alcohol at the games may be a small factor - but it has certainly not boosted football attendance. in fact, football attendance has trended down in recent years after alcohol was made available.

In the end, it's all about money. give people a ticket price they think is fair, and they will show up. the U of MN hasn't met that standard - at least not at this point.
 

Dammit - just realized I missed a good joke opportunity. I should have said that alcohol at the games might boost attendance by .......wait for it.......3.2%. Yuk, Yuk, yuk.
 



Dammit - just realized I missed a good joke opportunity. I should have said that alcohol at the games might boost attendance by .......wait for it.......3.2%. Yuk, Yuk, yuk.

Even a modest 3.2% increase in attendance would result in several hundreds of thousands of revenue as well as stop a downward trend.
 

Even a modest 3.2% increase in attendance would result in several hundreds of thousands of revenue as well as stop a downward trend.

If football can stay on the upward trend ... I'm hoping 3.2 is pretty achievable... even if it doesn't taste good.
 

I'm not suggesting anyone has a drinking problem. More of a bad joke on my part - being as how I am an admitted alcoholic. (sober since 1986)

My point was that I just don't think beer is going to make a big difference in attendance. MN fans are very price-conscious. If you want to have a beer while watching the game, you can do that a lot cheaper at home or even at a bar. The alcohol sales will generate extra revenue from the people who are already buying tickets.

Look, I may be dead wrong - maybe alcohol at the games is enough of a reason for some fans to decide to attend in person. But, I suspect that any gain in attendance - solely due to alcohol - will be minor - maybe 2 or 3% at best. If they combine alcohol with other incentives - including ticket deals - then that might make a bigger difference.

But, people are staying away from Gopher games for a variety of reasons. Alcohol at the games may be a small factor - but it has certainly not boosted football attendance. in fact, football attendance has trended down in recent years after alcohol was made available.

In the end, it's all about money. give people a ticket price they think is fair, and they will show up. the U of MN hasn't met that standard - at least not at this point.

Sometimes it's not just the alcohol. It's: I know I'll get dinner beforehand for $XX, pay $YY for tickets, $ZZ for parking, spend nearly 3 hours at the stadium between arriving early and fighting the crowd to leave, to sit and not be able to drink a beer. It might just be the straw that breaks the camel's back more than the deciding factor, if that makes sense.

That said, I agree with your main point - I don't think it's a magic bullet. If they gave away a free beer to everyone who came, I don't know that there would have been more than 1000 people at the Michigan game in the B1G tournament. But I am more likely to go if someone throws out the idea of going now, if that makes sense. Where last year if someone said "we should go to a Gopher Hockey game" I'd have blew it off, now I might say "you know, we're open these weekends" and see if it goes anywhere.
 




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