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Weekly Q&A Series: Hunter Lochmann, Chief Marketing Officer (University of Michigan)

In an effort to provide aspiring sports business professionals with a deeper insight into the college athletic world, BusinessofCollegeSports.com will be conducting weekly Q&A’s via email with industry professionals working in higher athletics. This week’s guest is Hunter Lochmann, Chief Marketing Officer at the University of Michigan.

Connect with Hunter on Linkedin as well as Twitter.

Check out the Q&A below and let us know what you think of Hunter’s advice on Twitter.

BusinessofCollegeSports.com — When did you first realize you wanted to pursue a career in sports?

Hunter Lochmann — I caught the sports bug for two reasons: I grew up in Massachusetts during Larry Bird’s prime, and my dad worked for Converse shoes during their prime (coincidentally with Larry as an endorser). Just being exposed to that and playing all sports, I knew I wanted to be around it.

BOCS.com — You obtained your undergraduate and graduate degree (both sports-focused). Is a graduate degree necessary to work in college athletics? Or does it just depend on the position?

HL — In my case it definitely got me on the right path to work in sports but it’s absolutely not a must. Many folks who work in sports start with different majors and different careers. However, a sports background is going to help with the all important first job/internship – getting your foot in the door. I was fortunate to have a professor/mentor in grad school (Bill Sutton) who has been very important in my career.

BOCS.com — You worked for the New York Knicks for roughly 6 years. What motivated you to transition to collegiate athletics?

HL — I loved what I was doing at the Knicks but I was made aware of this opportunity at Michigan that was simply a dream job that included all of my previous experience plus for such a strong athletic and academic brand. Additionally, this opportunity offered me the quality of life upgrade to raise my family in a great college town.

BOCS.com — What does a work day typically look like for you as the University of Michigan’s Chief Marketing Officer?

HL — Lots of meetings. Lots of emails. Never a dull moment and no matter what you think you have planned to do that day, you never, ever bat 1.000 due to being sidetracked for one reason or another.  That is what makes working in sports so fun and dymanic – no two days are the same. And with sports, team performances or a developing situation can make you switch gears quickly and activate entirely different marketing plans (like our basketball team’s success in the NCAAs).

BOCS.com — Social media plays an integral role in college athletic departments communicating with their fanbase. For you personally, though, how do you utilize social media to connect with wolverine fans?

HL — I know I have Michigan fans following me (I don’t have a huge following), so obviously like to tweet about all things Michigan athletics related.  But it’s also fun to show a little humor and tweet about my family, likes and other observations. At times, it’s even a good place to set a record straight or get a message across.

BOCS.com — For someone wishing to pursue a career in college athletics, what’s the one or two pieces of advice you’d give them?

HL — If an undergrad (or grad school), volunteer for the athletic department. There are plenty of opportunities to help. We have a terrific student internship program here and many of the best students go on to work for the athletic department or move on to other jobs within the sports industry. Additionally, study, learn, and master the digital space. It’s a skill-set that every college department needs and if they haven’t already, will be hiring for in the future.

BOCS.com — Did you intern/work for free/volunteer during your undergraduate/graduate career? If yes, where? How valuable were those experiences for you into obtaining that first marketing job?

HL — Absolutely. I was a student manager for the Kansas football team so it was fun to see the interworkings of a football program up close (as well as in-state tuition!). At UMass, I worked for the Mullins Center (their arena) in a support role. That was also eye opening — the facility side. Again, I was lucky to have Bill Sutton as my marketing professor and mentor who has opened doors for me for my entire career.

Follow Mark on Twitter.

‘U’ of Miami, Other College Programs Expanding Engagement Strategy With Infographics

Whether it’s football, basketball, or any other college sport, box scores are pretty bland to say the least. They don’t really tell a story maybe like, let’s say, an infographic does.

For the University of Miami (Fla.) and other college athletics programs, that’s exactly where they’re headed as they expand engagement with fans, alumni, and students through informative infographics following certain games; other infographics are devoted to the entire athletic department.

According to Director of Communications, Chris Yandle, the infographics have certainly grabbed fans’ attention, so much so that now they expect them after games.

“We then started telling fans that the Canes win wasn’t “official” until we released the infographic and branded it as #InfographicU,” Yandle explained to BusinessofCollegeSports.com.

But the infographics aren’t really that brand new to the University. Prior to Yandle’s arrival on campus last summer, Miami utilized infographics off and on as a way to engage with its following. Before the Canes’ college basketball run this past season, Yandle consulted with Brian Bowsher, Digital Media Strategist, in order to revive the athletic department’s use of the creative feature.

“All of our inforgraphics are done in-house. Brian took elements he liked from various other infographics and I would forward him anything I liked. With our new graphic designer on staff, we have some more options of creativity that we’re really excited about moving forward,” Yandle said. 

So what makes a great infographic? Well, as Yandle stated, it first starts with a clean look. Then, throw in some heavy graphics with clip art, icons, and several photos. If it flows pretty easily and the amount of graphics is greater than text, then you’re making great headway.

As of late, Miami along with the University of Michigan, Rhode Island, and the University of Oregon are teams currently excelling in the digital space and generating attention-grabbing content.

“There is so much static being shared among social media channels so a fan’s attention span may be only 15-30 seconds. That’s not enough time to read a game recap or a box score,” Yandle said. “But, if you make it aesthetically pleasing and pretty — like an infographic — then you can tell your story graphically and reach an entirely different audience that may not read the game recap afterwards.”

With infographics, there then comes the possibility of adding another revenue stream for athletic departments, even if it is relatively minimal. If you look closely at a few of the Miami infographics, you’ll notice a GMC logo in the bottom right-hand corner.

“If your infographics are getting a tremendous amount of hits, likes, traffic, etc., then it could be beneficial for them to be sponsored,” Yandle said.

Follow Mark on Twitter for more #SportsBiz talk.

Fan Rewards Go Social

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).

Student Ticket Prices in the Big Ten

Michigan Student Section - Taken by Flickr user grgbrwn

After looking at student fees at various universities, many of you were interested to see the relationship between student fees and student ticket prices.

The Big Ten had the least number of universities relying on student fees of any conference. I previously discussed how that might be related to football revenue. Perhaps it’s also related to ticket demand, however, with many of the Big Ten schools having strong football and men’s basketball programs.

So, when students are paying little, if anything, in student fees to the athletic department, how expensive is it to attend a game?

School Student Activity Fee Football Student Ticket Price Basketball Student Ticket Price Packages Availability
University of Illinois $2,961,577.00 $99.00 $156.00 $134 for Block I season football tickets, which includes t-shirt, kickoff party and more  
University of Iowa $525,707.00 $175.00 $75.00   If more applications received than football season tickets available, priority given to those who completed application by certain deadline.
Indiana University $23.00 $30.00 N/A $270 for dual football-basketball season package  
University of Michigan $0.00 $250.00 $99.00-$125.00   Students must be registered for at least half-time in the fall for football season tickets. For away games, there is a lottery if more applications received than tickets available.
University of Minnesota $0.00 $91.00 $131.00    
Purdue University $0.00 $119.00 N/A $250 for dual football-basketball season package  
University of Wisconsin $0.00 $174.00 $220* *$110 for half-season basketball tickets with two different 9-game packages available Football tickets are first-come, first-serve, not lottery style. Undergrads go first with 1,700 tickets held for grad students who begin purchasing two weeks later.
Ohio State University $0.00 $165.00 $132.00   Availability for football season tickets based on seniority and FT status. Basketball season tickets only include Big Ten games and opening night. Students may also order one ticket each to remaining games for $16/game. Only 1,400 student season tickets available for basketball.
Michigan State University $0.00 $136.00 $171.00   Availability for football season tickets based on seniority and FT status
Penn State University $0.00 $218.00 $59.00   Released for sale based on class (senior, junior, etc.) until sold out
Northwestern University N/A Free with tuition Free with tuition   Young alumni season tickets available for football and basketball.

Those with student fees providing revenue to the athletic department didn’t have the cheapest student tickets in the conference. Illinois did come in below the average $145 price tag on football season tickets at $99, but Iowa outpaced the average at $175. In Iowa, as in most places, it’s likely a product of demand. Last season was the first season Iowa is believed to have sold out their entire football season prior to the start of the season.

Four schools in the Big Ten charged more for basketball season tickets than football: Illinois, Minnesota, Wisconsin and Michigan State. The average price for basketball season tickets in the conference as a whole was just $20 less than football season tickets.

I came across several other interesting options and practices when it comes to student tickets. Several universities have options for the spouse of a student to purchase a season ticket at a price higher than students but lower than the general public, but only if tickets remain after student tickets are fulfilled. Iowa lists a “student guest” ticket at the same price as a season ticket for the general public, but presumably it would allow the guest to sit in the student section. It also carries an “if available” caveat, and based on the earlier discussion on last year’s ticket sales, I would say it’s unlikely these are available.

Indiana University has “Young Alumni” football season tickets available for $30 (the same price as current students) if you’ve graduated in the last three years.

Two of the most interesting things I found, however, were via University of Michigan (although some other universities have similar practices). First was the ability to buy tickets to away games. The following chart was on Michigan’s website showing the price and number of tickets student season ticket holders could purchase for away games:

GAME Price per ticket LIMIT
Northwestern $50 2
Michigan State $75 1
Iowa $70 2
Illinois $65 None

Students at Michigan also have the ability to transfer a student ticket to a non-student. According to Michigan’s website, students can purchase a validation sticker (price not yet determined for 2011) which allows them to transfer their student ticket to a non-student.

Big Ten fans, have I missed any other unique or unusual  aspects of student tickets at your university? What are your thoughts on the numbers presented?

*Please note, I’m going to do a separate piece on schools with revenue-generating hockey programs in the coming weeks. I’ll discuss hockey ticket prices and revenue then.

Thanks to my research assistant Andy Haugan for helping with this piece!

How Much Do Big Ten Programs Rely on Alumni Contributions?

After reading about which SEC alumni have the deepest pockets, many of you Big Ten fans wondered about your own conference. I like to give the people what they want, so here it is:

  School Contributions % of Total Revenue
1 Ohio State Univ. $27,327,347.00 22%
2 Univ. of Iowa $26,753,591.00 30%
3 Michigan State Univ. $21,292,589.00 25%
4 Penn State Univ. $20,993,951.00 20%
5 Univ. of Michigan $19,297,426.00 18%
6 Univ. of Wisconsin $19,247,563.00 20%
7 Univ. of Illinois $18,835,017.00 25%
8 Indiana Univ. $18,475,498.00 27%
9 Purdue Univ. $12,732,548.00 21%
10 Univ. of Minnesota $7,320,786.00 9%

Nothing good happens to my inbox when I compare the SEC and Big Ten, but I thought I might as well since I have the numbers. The average contribution in the Big Ten is $19,227,631, while the average in the SEC is $22,910,607. Remember, the SEC had one school who showed no contributions at all and that’s included in the average. Without Mississippi State’s goose egg, the SEC’s average would be $25,201,668.

Hold up Big Ten fans..before you start emailing me with all the reasons why the SEC number might be higher, let me explain another way to look at these numbers. Many schools do not allow contributions to come through their athletic department, but instead have money flow through their booster club or athletic foundation and take a distribution for only what is needed to cover the budget. When I wrote my piece on SEC finances awhile back, one AD told me they only pull enough from their athletic foundation to cover their operating deficit. As an added wrinkle, some schools have multiple booster clubs, each specific to an individual sport, and only pull what is needed for each sport. Thus, the numbers you see may only reflect what is needed by the athletic department, not the actual value of contributions made that year.

Looking at the numbers in that light, let me point out that contributions only account for 22% of a Big Ten athletic department’s revenue on average, while the SEC uses an average of 23 percent. Also, the SEC has a high of 34% while the Big Ten tops out at 30 percent. Does that mean SEC schools require a larger amount of contributions to fund their budget because of shortfalls in other sources of revenue? Or does it mean that some SEC schools are able to spend more because they choose to take larger distributions from their booster club or athletic foundation? It’s difficult to say.

The only number that really jumps out at me is University of Minnesota. I spoke with Garry Bowman in their athletic department and he confirmed that they only pull from their athletic foundation, where all contributions are managed, what they need each year.

University of Minnesota uses contributions for a much smaller portion of their overall athletic department revenue than any school I’ve looked at in the SEC or Big Ten (aside from Mississippi State, who relied on no contributions for 2009-2010). I looked back at Minnesota’s contribution numbers from the two years prior and found even lower numbers of $3.5 for 2008-2009 and $5.1 for 2007-2008. It’s hard to say how much this can be attributed to the new stadium they opened in 2009, which would have required massive concentrated fundraising efforts for the university to fund their 52% of costs (the State paid the remainder), but it’s a safe bet this played a role in the amount of contributions the athletic department accessed in recent years. Mr. Bowman also pointed out that they didn’t begin their preferred seating plan until the 2009 season, which is a significant source of donor money for many schools.

TCF Bank Stadium at Univ. of Minnesota

Now that you’ve taken a look at the SEC and Big Ten, I have several questions for fans of teams in both conferences. First, if your school’s athletic department is only pulling what they need to cover losses from the booster club, do you think they should be pulling more? If so, for what use? Second, what percentage of total contributions that come in per year do you think the athletic department should be spending and what percentage should be saved for projects down the road?

*Note that Northwestern’s number is unavailable because as a private institution they are not subject to an open records request.

Big Ten Ticket Revenue

The Big Ten is the most interesting conference to look at when it comes to ticket revenue. Why, you might ask? Because it is the only conference that still engages in revenue sharing when it comes to gate receipts.

Yes, you heard that right. Michigan, Penn State and Ohio State do not get the full benefit of having some of the largest football stadiums in college football. You know how members of the U.S. Marine Corps say their priorities or code are, “Unit, Corps, God, Country”? When it comes to college athletics, it’s “Conference, Football, School, Athlete”.

According to the Big Ten, revenue sharing for gate receipts has been a staple of the conference since the 1950s. Back then, teams shared 50% of their gate receipts with no minimum or maximum per game.

Today, the Big Ten shares gate receipts from both football and men’s basketball. For football, schools contribute 35% of the gate receipts for all home games against conference opponents. The minimum contribution per game is $300,000 and the maximum is $1 million, making the maximum for the season $4 million. The pool is divided equally between all schools.

One important thing to note is that the gate receipt total from which the 35% is taken does not include premiums paid for suites, club seats or the like. For example, if a school requires a minimum donation in order to qualify for season tickets or a suite, that donation amount is not included, only the face value on the tickets. Similarly, if the cost of a suite is $10,000, but the face value on the ticket is only $4,000, it is the latter amount that is used for revenue sharing purposes.

Here’s what each team in the Big Ten contributed for the 2009 football season: Read the rest of this entry

How Big is the Big Ten Financially?

I recently wrote about finances in the SEC, specifically with respect to football and overall athletic department profits. Thanks to so many of you who sent me tweets and emails about it, I’ve decided to make this into a series. Next up is the Big Ten. (If you missed the first piece and want to understand the origin of these numbers and how they were calculated, check the note at the end of this piece.)

There’s an argument to be made that the SEC is the strongest conference in college football. I’m not just saying that because I’m an SEC fan, I’m saying it because they’ve won the past five national championships. Perhaps then it is no surprise that the SEC surpasses the Big Ten in each and every category when it comes to football finance: it generates more, it spends more and it posts bigger profits.

Here’s a quick breakdown of the averages for each category (the totals would be misleading because the SEC has twelve teams and the Big Ten only eleven):

  Football Revenue Football Expenses Football Profit
SEC $49,900,780.92 $19,954,052.50 $29,946,728.42
Big Ten $40,578,173.45 $17,886,754.73 $22,691,418.73

While the SEC has the Big Ten beat in terms of football, the Big Ten teams bring in larger athletic department profits in the aggregate than SEC teams.  The total profit for athletic departments in the Big Ten is $117,750,068, while the SEC, who has one more team than the Big Ten, only posts aggregate profits of $97,887,580.00.  The Big Ten edges out the SEC in terms of average profit by school as well with $10,704,551.44 versus $8,157,298.33 in the SEC. Read the rest of this entry