How much do schools make from radio rights?
How much do schools make from radio rights?
SportsBusiness Daily is reporting that each BCS Conference that holds a conference championship game saw an increase in attendance this year as compared to last year.
The following chart shows how much attendance increased (or decreased) this year as compared to the last two years:
|Conference||% Change from 2011-2012||% Change from 2012-2013||Absolute Change from ’12-’13|
Last week, the University of Michigan held their monthly university leadership meeting, where Athletic Director Dave Brandon announced the $146.4 million budget for fiscal year 2014 (the 2013-2014 school year). It is projected that out of the operating revenues of $146.4 million there will a budget surplus of $8.9 million.
With the continuous growth of Michigan’s athletic department, such as the addition of women’s lacrosse starting in fiscal year 2014, contributing to the increasing expenses “our objective is to do everything possible to fully support the health, welfare and competitive opportunities of the 900-plus student-athletes associated with our 31 teams,” added Brandon.
In addition to the increasing growth of the athletic program, Olympic facilities are also in the plan to be built.
“We believe that no sport should be left behind, and all of our student-athletes and coaches deserve practice and competition facilities that are truly the leaders and best,” said Brandon.
The University of Michigan is preparing for the Bridgestone NHL Winter Classic on January 1, 2014, which is helping to pad next year’s budget. The budget projects the athletic department will incur $600,00 in expenses when it hosts the event. Those expenses will be more than covered by the rental fee from the NHL: a cool $3.1 million.
Another area of revenue growth being projected is preferred seat donations and inessential gifts, which are budgeted to increase from $27.4 million to $32.3 million in fiscal year 2014.
As fiscal year 2013 draws to a close, Michigan Athletics is projecting a $10.2 million surplus, coming in $4.4 million higher than originally budgeted. The surplus will be used to help compensate in the funding of renovating the field hockey project and for the Schembechler Hall.
By: Hunter Mundy
The Connecticut Huskies will be hosting the Michigan Wolverines football team on September 21, 2013. For UConn, this may be the biggest home game ever scheduled. The game will take place at the Huskies’ Rentaschler Field, which has a normal capacity of 40,000 fans. This will be the second game in the contracted series between the two teams. The first game, a 2010 Wolverine victory of 30-10, was held before of a crowd of 113,090 at Michigan Stadium.
Connecticut normally allots 3,000 tickets to visiting opponents, but the contract with Michigan requires UConn to reserve 5,000 tickets for the Wolverines. In order to keep the same amount of season ticket opportunities, UCONN plans to add 2,000 temporary seats to the stadium’s capacity. While the Huskies have had numerous games in past years where crowds reached the 40,000 capacity, the additional seats, along with this game’s high demand for tickets, are sure to set a new record for football attendance.
In 2009, UConn’s average attendance was 38,229, and in 2012 the average number of spectators at Connecticut’s six home games was 34,672. Over four years, the ticket demand for Huskies football tickets has decreased by approximately 3 percent. Not taking into account required donations during the 2009-2011 cycle, tickets ranged from $150 for reserved seats to $210 for mezzanine chairs for a six-game home schedule. For 2013, which has a seven-game home schedule featuring the Wolverines, season ticket prices range from $175 for reserved seats to $280 for mezzanine chairs. UCONN/Michigan game attendees (outside of those purchased through the Wolverines allotment) will be required to purchase season tickets through the Huskies Athletic Ticket Office.
Some may ask why Michigan would not renegotiate or buy their way out of this contract in order to allow for an extra home game and the additional revenue that would generate. Dave Brandon, Michigan athletic director, stated to CBS Sports that even though he could have broken the deal, he opted not to because, “it would screw up [UConn’s] schedule” and force Michigan to “run around trying to find another game.” While cancelling this game would have led to scheduling difficulties for both groups, allowing this game to take place is truly a win-win for both institutions.
Michigan’s allotted 5,000 seats for this game does not nearly meet the expected ticket demand of Wolverine fans. With UConn located in one of the most populated areas of the United States, Michigan alumni are plentiful. For instance, the University of Michigan Alumni Club of New York, based in New York City, has over 13,000 members. Additionally, there are at least eight UM alumni clubs within a three-hour drive of UConn’s Rentaschler Field. UM Alumni Club members typically have the opportunity to purchase tickets for most home and away Michigan football games. However, it is the norm for these benefits to exclude rivalry games with Notre Dame and Ohio State as well as other games with traditional high-ticket demand.
As an example of the excitement and limited supply of tickets in the marketplace, the UConn game has also been added to the excluded list of games available directly to UM alumni club members. Look for UM fans throughout the region to either increase their UM athletic club donations and/or purchase UConn season football tickets in an effort to see their beloved Wolverines live and in person.
The 2013 season will be Connecticut’s first year in the newly named and configured American Athletic Conference. Having a home opponent on the schedule such as Michigan could not come at a better time. With losing former Big East rivals West Virginia, Syracuse and Pittsburgh from the Huskies schedule, the Wolverines visit to Rentaschler Field will give the university and its football program a spark and a chance to shine on the national stage.
Many college programs choose to schedule traditional powers in order invigorate their home schedules and grow their program’s budgets. For instance, UConn’s rival Rutgers hosts the SEC’s Arkansas Razorbacks on the same day the Wolverines visit the Huskies.
In 2010, Duke University hosted the Alabama Crimson Tide, which set a modern day attendance record at the Blue Devils’ Wallace Wade Stadium (35,237). The #1 Crimson Tide routed Duke 62-13 in front of what ESPN dubbed “a crimson coated stadium named for a former Alabama coach.” Duke also used temporary stadium seating to accommodate the extra Alabama fans for this big contract game.
Additionally, Michigan State, along with Central Michigan, Eastern Michigan and Western Michigan are a part of an agreement known as “Celebrate the State.” This contract contains 12 games from 2011 to 2020 with Michigan State facing each team four times during the period. One game of each these four game series will be played on the home field of Central Michigan, Eastern Michigan and Western Michigan. In 2012, Michigan State visited Central Michigan and won 41-7. This game set an attendance record for Kelly/Shorts Stadium of 35,127 spectators with plenty of green-clad Spartans fans in attendance. Johnny Adams, Michigan State’s cornerback, stated to ESPN, “It was a little different, a smaller environment; but at the end of the day it’s all football. It’s good for the fans and it’s good for Central to bring the fans out here and put on a great show.”
Athletic department officials do not believe that the field at Bart Kaufman Field is the first of kind, but it is certainly rare. The new home to Hoosier baseball features no dirt anywhere on the field. Turf fields are undoubtedly commonplace in place in modern baseball, but a turf field usually features dirt on the base paths, or at least around the plate and on the mound. This IU photo gallery shows the AstroTurf field, including the turf mound and warning track.
Over the years, turf baseball fields have gained popularity. As turf has become more commonplace, the amount of dirt on artificial fields has decreased. First, dirt on the base paths was reduced to the areas directly around the bases. Next, turf fields with only dirt in the area around the plate and on the mound appeared. In recent years, teams like Ohio State, Louisville, and Virginia Tech have unveiled turf fields that only have dirt on the mound. But Bart Kaufman Field takes it to the next level with an all turf mound. At least one other totally dirt-less field is thought to exist. Consol Energy Park is shared by a high school team and an independent minor league team and in Pennsylvania. The Hoosiers new home could very well be the first all turf field in college baseball.
Last season, two northern teams made it to the College World Series. Part of Kent State and Stony Brook’s success was credited to an unseasonably warm winter which allowed both teams more on-field practice than in normal offseasons. While the bitter cold keeps many teams indoors, the effect of winter weather on field conditions should not be overlooked. Indiana’s Associate Athletic Director for Facilities Eric Neuburger says the all turf field will allow significantly increased field on-time for the Hoosier baseball program.
At the Division I level, postseason baseball host sites are awarded to programs based on merit, though teams ranked number one have been outbid for the right to host in the past. As a ranked team with an outstanding facility, Indiana has a serious shot at hosting a regional. This should come as a welcome change for NCAA as many, including Big Ten Commissioner Jim Delany, have claimed that baseball’s early start date is unfair to northern teams and makes it impossible for them succeed or host postseason events.
While baseball traditionalists may cringe at thought of a diamond without dirt, the benefits are too overwhelming for northern programs to pass up. The profound impact on off-season training regimens will be very tempting for coaches and administrators of teams located in regions with less than ideal baseball climates. Having a field that is suitable for play year-round could be a major recruiting asset for northern teams. Look for more turf only fields to pop around the country in the future.
Luke Mashburn is a Game Day Operations Specialist at Kennesaw State University. You can follow him on Twitter @L_Mashburn.
Stewart Mandel has a piece out today on SI.com describing the range of urgency athletics administrators are feeling regarding the O’Bannon v. NCAA case currently making its way through the courts. For those of you who haven’t kept up with the case, I wrote about it in more detail here. Essentially, former UCLA men’s basketball star Ed O’Bannon and his co-plaintiffs are suing the NCAA, and other defendants, for not sharing the revenue generated in part by student-athletes both while they are in school (e.g. TV) and afterwards (e.g. video games, archive footage). If the O’Bannon plaintiffs were to win, or even settle the case in their favor, the current structure of college athletics will be forever altered.
Mr. Mandel profiled University of Southern California athletic director Pat Haden’s concern that the case is by no means a slam dunk for the NCAA, and how he and his colleagues should be preparing for the aftermath if it were to lose the case. I appreciated Mr. Haden’s comments. Up until now the little we’ve heard from administrators are the doomsday scenarios spouted off by the likes of Big Ten Commissioner Jim Delaney, who claimed his schools would rather de-emphasize sports and join Division III than go along with any type of pay for play scenario.
Mr. Haden is a lawyer. He’s been reading the articles from legal analysts and scholars. He knows the NCAA is vulnerable and the case is soft. More importantly, he knows the stakes have never been higher. It reminds me of this Family Guy/Star Wars clip, with Mr. Haden as Darth Vader and NCAA president Mark Emmert as the Empire’s henchman talking about the “invulnerable” Death Star (current NCAA structure). Mr. Haden is right to be concerned. He is right to be asking questions. He is also right to be taking proactive steps to address the possible outcomes, or perhaps look at acceptable settlement options.
The contrast to Mr. Haden is University of Texas athletic director DeLoss Dodds. He was also quoted in Mr. Mandel’s piece, but with much less concern or urgency than Mr. Haden. Mr. Dodds seemed to think he and other athletics administrators have “more immediate things to worry about,” and “have no control over (the case).” In my view, nothing could be further from the truth. The case exists only because of how the NCAA and its members (of which the University of Texas and Mr. Dodds is one) have constructed the current college athletics model. If those in power change the model, the case goes away. And while Mr. Dodds might simply be one person in a massive bureaucracy, he leads arguably the most powerful athletic department in the country, and SI.com recently named him the 8th most powerful person in college athletics (notice Ed O’Bannon ranks #4). My guess is others will listen when he speaks.
Last week much of the country’s attention was fixed on the Supreme Court’s hearing of two significant same-sex marriage cases. Reading through much of the post-argument commentary from both sides, it seemed apparent that at some point in the future, though perhaps not as a direct result of these two cases, same-sex marriage will be legal across the country. I get that same feel about the O’Bannon case and paying student-athletes. It may not be this case or right now, but at some point in the future college athletes will be paid. The only question is when the new era is ushered in, and how. Pat Haden recognizes this and wants to take action; good for him.
Follow Daniel on Twitter at @DanielHare.
A number of Division I conferences have recently increased the fees a member school must pay when it withdraws from the conference. These fees are commonly referred to as exit fees. The ACC is one of the conferences that recently increased its exit fees. And its exit fee provision has been receiving a lot of attention lately because of Maryland’s departure to the Big Ten.
The ACC actually increased its exit fees twice in the span of a year. The ACC first upped the fees from around $12-14 million to $20 million in September 2011 when it announced it would add Syracuse and Pittsburgh. The fees were then upped again this September after the conference added Notre Dame (in all sports except football and hockeyl).
The ACC’s current exit fee calls for a withdrawing member to pay an amount equal to three times the conference’s total operating budget at the time of withdrawal. Based on the ACC’s 2012-13 operating budget, this equates to an exit fee of more than $52 million. It is this amount that the ACC is seeking in its lawsuit against Maryland for the school’s move to the Big Ten.
When the ACC and other conferences increase their exit fees, the general thinking is that it further discourages members from leaving the conference. But, because of how courts analyze the legality of these exit fee provisions, increasing the amount of the fee can actually increase the chances of the exit fee provision being deemed unenforceable. So, instead of discouraging schools from leaving, it can actually embolden them to do so.
In legal terms, conference exit fees are known as liquidated damages. Liquidated damages provisions are commonly added to contracts. They set the amount a party to the contract must pay in the event it breaches the contract. Liquidated damages provisions are useful because they theoretically save the parties the time and expense of litigating the amount of damages caused by the breach.
But, the amount of liquidated damages specified in a contract cannot be randomly selected. Courts will generally only enforce liquidated damages provisions if (1) the anticipated damages in the event of a breach are difficult to ascertain at the time of contracting, and (2) the amount of liquidated damages is a reasonable estimate of the actual damages that would likely be caused by a breach. If a liquidated damages provision does not meet this test it is deemed a penalty and is unenforceable.
Assuming that the ACC’s liquidated damages provision fulfills the first element of the test, it is questionable whether it would meet the second element. The requirement to pay three times the conference’s operating budget does not appear to be related in any way to the actual amount of damages the ACC would suffer if a member withdraws. It just seems like an easy way to ensure that the exit fee continues to grow without having to continually vote on it. This makes it look like a penalty.
And the actual number that results from this provision, $52 million, is not a reasonable estimate of the ACC’s actual damages. For example, Maryland’s departure will not result in the ACC’s tv deal being reduced by $52 million. A good argument can be made that the ACC actually suffered no damage when Maryland left. Maryland’s departure allowed the conference to add Louisville. And the general consensus is that the ACC is now stronger athletically as a result (at least in the two sports that matter for tv revenue purposes, football and men’s basketball).
This is consistent with recent realignment history. Over the past two years the Big 12 lost Nebraska, Colorado, Texas A&M, and Missouri. Yet, after adding TCU and West Virginina, the Big 12 signed the most lucrative tv deal in the conference’s history this year. (The one exception to the no damage upon withdrawal argument would be the Big East. The defections in that conference have definitely hurt the value of its tv rights).
When a liquidated damages provision is determined to be invalid, the party attempting to enforce the provision is allowed to instead seek its actual damages from the breaching party. But, as discussed above, conferences often suffer minimal damage when a member withdraws, either because the member added little value to the conference or because the conference quickly replaces it with a new member of equal value (at least in tv executives’ eyes).
As a result, exit fees often leave conferences in a tough position. They have to be high enough to discourage a member from leaving the conference. But, if they are too high they could be declared an invalid penalty. And, if the exit fees are invalid, the conference would then have to prove its actual damages, which are usually much less than the amount of the exit fee. As a result, exit fee disputes have always settled without a court deciding the validity of the liquidated damages provision. Recent examples include the Big 12 settling with Nebraska, Colorado, Texas A&M, and Missouri for less than the mandated amount of exit fees.
So, what is the solution to the problems with exit fees? Grants of television broadcast rights. In these agreements, all of the conference members grant their television broadcast rights to their athletic contests to the conference for a certain period of time. If a member leaves the conference during that time, the conference retains the member’s television rights. Because the value of a school to a conference is the television revenue it can help generate, a grant of rights agreement makes the members essentially worthless to another conference that is looking for new members.
While grant of rights agreements do have potential issues (sovereign immunity issues being the biggest), they are not subject to a subjective test like liquidated damages provisions. Thus, they are much more likely to hold up in court as valid contracts.
Currently, only the members of the Big Ten, the Pac-12, and the Big 12 have executed grant of rights agreements. Other conferences that want to ensure stable membership would be wise to insist on their members signing similar agreements. (Yes, even the mighty SEC should have its members sign grants of rights). If the ACC had one in place, Maryland likely would not be joining the Big Ten.
By: Jason Singer
Mark and Nancy Hollis used to be just another two faculty members on the Michigan State campus. Yet, after their $1 million donation to the University, they are anything but just that.
The donation will be divided as follows: half of the money will go to the academic section of the University, and the other half will go to the athletic program. The athletic portion will goes towards funding the “North End Zone” project at Spartan Stadium. This project will help develop the facilities for both present and future student-athletes. Many sections of the stadium will be improved and renovated, including both the home and away locker rooms, the media center, concession areas and restrooms.
Mark Hollis, who was named the Athletic Director in 2008, knows first hand how important the facilities are to the program. He even stated that him and his family will “continue to support this expansion of Spartan Stadium, which is critical to the future of the football program and will improve the entire athletic program.”
When Mark and Nancy Hollis attended Michigan State together, they knew that their lives were influenced by fellow students, faculty members, and others who were involved with them on the MSU campus. They beleive this still stands true today. As a result, they decided to donate and create this scholarship fund to continue the positive influence on others that Michigan State has had on them.
The scholarship fund they created is known as The Hollis Family Endowed Scholarship. Only a portion of the invested income earned is spent each year. The remainder is added to its previous amount, which increases the scholarship from the initial year. Doing this will allow Michigan State to give out scholarships for years to come, long into the future.
By donating this great gift to their alma mater, Mark and Nancy Hollis have helped Michigan State for the better, as the renovations to Spartan Stadium, and the scholarships for incoming students, will improve this impressive university a great deal. The future of Michigan State is looking great, and people will always look back to the Hollis family as important campus influences.
Rewards programs are not new. Whether for pumping gas, swiping your credit card or booking a flight, companies have long sought to incentivize consumer loyalty. Think about it: between commercials, people in booths at the airport and internet pop-up ads, rewards programs are becoming ubiquitous.
College athletics fan rewards programs, where athletics departments give out prizes based on attendance at various sporting events, are also nothing new. Recently, a new trend has developed in this arena, one that seeks to combine the rewards concept with social media. Social media fan rewards programs have been popping up around the country, including schools like Oregon, Florida State, Duke and Penn State, among many others.
The premise is simple: fans are already interacting via social media outlets like Facebook, Twitter, Foursquare and Instagram, often immediately before, during and immediately after athletic contests. Schools utilizing this technology are now providing a platform for fans that makes it easy for them to interact and engage (and spread the good word of the athletics department), while also garnering points to be used for free swag (and who doesn’t like free swag?).
One of the earliest adopters of these programs was Baylor, whose Baylor Bold Rewards program kicked off at the beginning of the 2011 academic year. At the time Associate AD John Garrison stated that, “With so much of our communication moving to social media, we felt this rewards program would be the way to get beyond our ‘friends’ to our friends’ friends.” The program has generated over 22 million social media impressions over the course of a year. That ability to expand a fan base is a big reason these programs have themselves gone “viral”. It’s about rewarding fans for spreading your message about your brand to their friends. Now, not only are more and more schools getting into the act, but conferences are as well, with the Big Ten Network, Horizon League and SWAC all launching their own iterations recently.
Two of the leaders in this burgeoning industry are Row 27 and Lodestone Social. Row 27 was responsible for Baylor’s groundbreaking program and also offers a number of other social marketing tools through their Fanmaker App Suite. Each company boasts long lists of clients from major programs, and each promises to galvanize a fan base through social media while dangling the carrot of the potential monetization of those social media initiatives. Lodestone Social’s pitch is to, “unite the void between social media efforts and revenue, connecting the passion of the crowd to the power of your team.”
One recent example of this “unity” is when Ole Miss and Mississippi State jointly announced in September that C Spire Wireless had signed on to become the official wireless partner of the universities’ social media rewards programs. The sponsorship will allow fans who participate in the Ole Miss Social Rebels and Hail State Social Rewards programs to interact with C Spire Wireless and earn additional rewards and giveaways, and also allow both universities to better engage their fans during games through their smart phones. It is believed to be the first program of its kind in the country, but is not the only way to make money from social media efforts. For example, in 2011 the University of Michigan made $376,478 in revenue from Facebook referrals alone.
Not everyone is impressed with social media fan rewards programs, however. A recent post on the digital and social media blog Digital Hoops Blast questioned if social media rewards programs are necessary at all. The three arguments made to support this notion are: 1) that these programs cause schools to lose focus on creating and sharing amazing content by focusing instead on points, 2) these programs dictate what social networks are better for fans to engage in by skewing the point scheme (more for a like on Facebook than a retweet on Twitter for example), and 3) the automation that totals up points to decide who your best fans is impersonal, which is counterintuitive to how you would want to connect with your best fans.
Those are great points but ultimately these programs are not going to go away. If Michigan, Ole Miss and Mississippi State were able to monetize their social media efforts, you can bet others across the nation with similar or even larger social media footprints are in the process of forming similar partnerships. Rather than the latest tech trend these programs appear to be an extension of what athletics departments have been doing with “traditional” fan rewards programs for years. For this reason look for companies like Lodestone Social, Row27 and others to continue to saturate the market, and for a social rewards program to come to a university near you (if it hasn’t already happened).