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!!
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!!