JRsec
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RE: The Next Great Money Grab (Nike vs Adidas vs Underarmor)
(08-26-2017 03:08 PM)Wedge Wrote: (08-25-2017 07:41 PM)JRsec Wrote: (08-25-2017 07:12 PM)Wedge Wrote: (08-25-2017 02:52 PM)JRsec Wrote: Gate and advertising/sponsorship deals have been the largest part of that 80 million gap between the top revenue producers and those say below 25th place.
Ticket sales (and the mandatory donations that go with them) are the biggest part of it, and that revenue is rarely identified as a line item in any publicly-released financial statement. It's an under-reported issue when looking at CFB revenue.
Just making some guesstimates: There are about 20 teams with 80,000 or more seats in their home stadium. If you sell 80,000 tickets, and your (ticket price + donation + parking + concession profit) for each ticket averages $100, or if you sell 100,000 tickets and gross $80/ticket sold, then you gross $8 million for each home game. (Based on the prices listed here for single-game tickets, Ohio State is easily grossing over $10 million at almost every home game.) Other teams not only don't have the stadium capacity but can't charge as much for tickets. Even most of the P5 teams are grossing half as much or less per home game as the top 10-20 teams in attendance. A reserved seat single ticket for Ohio State's game with OU this year costs more than a Purdue reserved seat season ticket. The gaps would only get larger if we looked at G5 home game revenue - many G5 teams don't even sell 20,000 tickets per game, and if their revenue/ticket is $40 or less, then they're grossing $800,000/game or less and the stadium overhead eats up a large chunk of that. A G5 team that pays an FCS team to play in their stadium might have zero net revenue from that game.
Except the numbers are even more skewed than your illustration which is true in itself. The SEC average attendance last year was 77,500 but our median attendance was 86,000. The Big 10 average attendance was 66,000 but their median attendance was 57,000. In the SEC at 2/3rds or more of our member institutions season ticket books for 7 home games are around $550 each. In order to buy a pair of season ticket books a donation of $800 to the Athletic Fund is required. $800 puts you in the end zones, or at the goal line in the upper decks. For sideline seating lower deck the donations can reach as high as 5,000 for stadium seating or 2,400 for 20's to 40's. The same is true in the upper deck but the contribution is lower 1,200-1,500. Luxury boxes start at 100,000. Now Wedge these numbers don't even start to account for concessions, merchandise, tailgating slots, stadium cushions which you now have to rent, etc.
So you are correct that the differences are massive. Auburn will make over 7 million for a home game before you count anything but ticket sales (which won't show donations for the right to purchase tickets as that's a separate item). If you sit in the end zone you have a $1,900 investment in your pair of season tickets counting your donation for the right to purchase them. So you have an investment of $135.70 in each of those tickets in your season books whether they are against SEC, FBS, or FCS opponents.
That's why young families aren't attending in any kind of numbers anymore. They can't afford it. So while this balloon is inflating it looks great. But when the Boomers and X'ers are gone deflation is going to set in.
At least in the SEC the ticket pricing is a lot more standardized than in the Big 10 and other conferences. So our sales floats most boats. Taxes vary per state and tickets all have tax in them.
Another thing you do, when you're awash in this much money, is use the money to buy your team a more favorable non-conference schedule every year.
Example: Right now, Oregon State is playing at Colorado State. CSU is opening their new stadium, their fans and players are all geeked up to try and beat a Pac-12 team, and if they do they'll celebrate as if they just won the national championship. From Oregon State's perspective, it's a no-win situation, and Oregon State's coaches don't like having to put their team in situations like that. But they don't have the luxury of writing huge checks to play more non-con games at home.
If you're making $7 million or more on every home game no matter who the opponent is, then you can always pay a G5 team $1.5 million (or whatever the going rate is) to buy a home game and never play 'em on the road. But if you're Oregon State, your finances dictate that instead of buying two home games at $1.5 million each, you spend $3 million less by playing a home/home with no money changing hands.
True. And it also why the SEC is so reticent to move to 9 conference games. The payout to visiting conference schools is a lot higher than to G5 or FCS school. And 9 conference games mean you lose an extra home game every other year. That's a 7 million dollar loss that your visitor money doesn't come close to making up. Typically we pay an FCS school 750,000 to 1,000,00 to play. Some G5's might make as much as 2 million for the trip, but your guesstimate there was pretty close.
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