Louisville Athletics Program is a Winner Financially
A funny thing happened while I was researching SEC football profits a couple of weeks ago. I came across an article stating Louisville men’s basketball was the 21st most profitable sports program in the country. The first twenty were all college football programs, and Louisville had finished ahead of strong on-the-field programs like USC and Oregon.
I had no idea that researching the Louisville men’s basketball team would lead me to discover the hidden gem in college athletic departments, but that’s exactly what Louisville turned out to be.
First, let me clarify that the men’s basketball team was the 21st most profitable program during the 2009-2010 season – before they played in a new arena. I can tell you that so far this season, in the new arena, the men’s basketball team has already generated $2.6 million more than projected for the season. In fact, they had already reached their projected revenue before Big East play began.
It’s not just the men’s basketball team doing well, however. The women’s basketball team is flourishing as well. They’re number two in the nation in terms of attendance this year, exceeded only by power-house program Tennessee. The Louisville women are drawing over 10,000 fans per game on average. That’s more than the average for all but seven of the SEC and ACC men’s programs! Demand has been so high, Louisville is currently considering opening up the upper deck to allow more than the 11,000 fans they generally accommodate for women’s games.
It’s not just basketball doing well either. In 2010, the football stadium was expanded from 42,000 to 55,000, and fans used the new seats on the way to averaging over 50,000 per game in attendance. Football ticket sales brought in nearly half a million dollars more than projected, and Louisville expects to see a surplus on its $11 million budget for football once Big East distributions are received.
Even when major sports like football and basketball do well, however, not all schools turn a profit in their athletic department, as you saw with the SEC financial data I wrote about a couple of weeks ago. Louisville did though. For the 2009-2010 school year, Louisville’s athletic department turned a profit of over $2 million. Having recently researched profits in the SEC and Big Ten, I can tell you that is more than Auburn, Mississippi State, Ole Miss, South Carolina, Northwestern, Minnesota or Illinois.
Why is Louisville so successful? I asked their Athletic Director, Tom Jurich, and he was quick to tout his school’s accomplishments in the Title IX arena. Title IX compliance was an issue when he took the AD job thirteen years ago, but not anymore. He endeavored not just to resolve their issues, but to become a leader in college sports in terms of Title IX, and he’s done just that.
What really struck me in our conversation, however, was when he told me that every single men’s and women’s sport at Louisville has a new stadium/arena/playing field in the past ten years. The only exception is the football stadium, built in 1998, which was expanded just last year. Plans are currently being developed for a new soccer field and both the baseball and softball stadiums will be expanded in the near future.
Not only is that impressive, but each facility (with the exception of the new basketball arena, which was a joint venture with the City of Louisville) was constructed solely using private funds. Not one dime has been taken out of the athletic department to construct the facilities. Instead, Louisville has done something that perhaps no other school has mastered at the same level. They’ve sold naming rights.
When funds were first being raised for the new football stadium in 1996, Papa John’s donated $5 million for naming rights through 2033. When the stadium needed to be expanded recently, Papa John’s kicked in another $10 million, extending their naming rights through 2040.
Yum! Brands, which owns KFC, Pizza Hut and Taco Bell, put their name on the new basketball arena, paying $13.5 million over the next ten years. They also previously paid $5 million in 2006 to put their name on the basketball practice facility. By comparison, the University of South Carolina only received $5.5 million over twelve years from Colonial Life for the naming rights to their basketball arena. That deal is the only naming rights deal in basketball or football in the SEC.
While naming rights are commonly sold in professional sports, many universities think there are too many conflicts of interest to raise money for their facilities in this manner. Meanwhile, Louisville has been able to build all new, privately-funded facilities for each and every one of their men’s and women’s sports, while also excelling at Title IX compliance and turning a profit in the athletic department.
The real gem at Louisville, if you ask me, is AD Tom Jurich, under whose direction all of this has blossomed during his thirteen-year tenure. Louisville is truly setting the standard all other universities should aspire to achieve.
A special thank you to AD Tom Jurich for taking the time to speak with me. Also, for some of the best coverage of Louisville athletics, check out Eric Crawford of the Courier-Journal, whose articles provided me with some of the great data for this piece.
This article offers the personal observations of Kristi Dosh, and does not represent the views of her law firm or its clients. Any information contained herein does not constitute legal advice. Consult your own attorney for legal advice on these matters.