Avast ye! Though I may be best “known” for philosophical musings and general nonsense, I do dabble in quantitative studies from time to time.
To the Number Crunching Gods, I offer up my crude financial analysis, so that we all may be enlightened regarding the scheduling practices with which we are so dissatisfied.
In FY08 M made $139,410,000 in Other Auxiliary Enterprises [heretofore referred to as "OAE" -ed.] Revenue -- which consists of revenues generated by "intercollegiate athletics, parking, student unions, university press and student publications." The order of that list, I am sure, puts the biggest moneymakers first and goes down from there. I'm not going to bother trying to figure out exactly how much athletics contributes proportionally, and it doesn't matter a whole lot, as we shall see.
They give some detail in terms of Auxiliary Enterprise Revenue, enough to figure out how much each category contributes to the total. OAE contributes 6% of the total revenue for this category.
Now, here is the weak spot in my analysis. They do not give detail for Auxiliary Enterprise Expenses (just the total figure), so I assumed that the proportions of costs in each category were distributed according to the proportions of revenue generation. This is almost certainly a false assumption, but it gives us an approximation to work with, and is probably not terribly far off.
So, with that in mind, I estimated OAE Expenses to be $133,760,370. Subtracting costs from revenues shows a yearly operating surplus of $5,649,630 for OAE.
What does this have to do with our emasculated football scheduling practices? Yes, that's right, now we are getting to the good stuff.
Using attendance figures and an estimate of 20,000 student tickets per game, and not counting validation stickers (data unavailable) I calculated the average revenue generated per home game at $5,455,438.14. The least profitable game was Miami (OH) at $4,876,700.00 and the most profitable was MSU at $6,399,490.00.
Given our estimate of the operating surplus for OAE (of which athletics is only a part – albeit the most significant part, financially) we find that the average revenue per home game is 97% of this surplus. So, on average, one game creates almost the entire operating surplus for those activities (see above to be reminded of other programs/departments under the auspices of OAE, in addition to the other sports under the athletic department). Even the lowest revenue generator (Miami) constitutes 86% of this surplus.
Behold the power of football.
No wonder Bill Martin is unwilling to have another away game, which would basically discard the entire operating surplus for the athletic department et al.
So it seems that Brian is right: It’s hopeless.
But not entirely! As you can see from the table below, variability in ticket pricing leads to significant results. A high-profile game like MSU cost $65/ticket while the average ticket price (excluding MSU) was $53.83. If we get a big-name team to play, then surely the ticket price could be jacked up enough to compensate for a good portion of lost revenue from the subsequent away game (see the table: total revenue for the MSU game was more than one million dollars above the average, again excluding MSU from the recalculated average). Given the positive externalities generated by these high-profile match-ups (namely, being taken seriously as a national power, which leads to increased revenue in the long-run) it seems reasonable to schedule them once in a while and make adjustments (in costs –do you really need another opium den, athletes?— and ticket pricing) to minimize the harm from lost revenue.
But will this happen? I doubt it, as the stated reason for the Endless Domer Duel (EDD) and the data available indicate a highly conservative financial philosophy… they just don’t seem willing to take risks. However, when (if) the economy rebounds and the financing of the new stadium construction becomes more manageable, we may see a decrease in this conservative approach. Let us pray.
FOOTBALL TICKET REVENUE
Team / Price / Attendance / Student price / Non-student attend / Non-student $ / Student $ / Total $
Utah / 50 / 108,421 / 27 / 88,421 / $4,421,050.00 / $540,000.00 / $4,961,050.00
Miami / 50 / 106,734 / 27 / 86,734 / $4,336,700.00 / $540,000.00 / $4,876,700.00
Wisco / 59 / 109,833 / 27 / 89,833 / $5,300,147.00 / $540,000.00 / $5,840,147.00
Illinois / 59 / 109,750 / 27 / 89,750 / $5,295,250.00 / $540,000.00 / $5,835,250.00
Toledo / 50 / 107,267 / 27 / 87,267 / $4,363,350.00 / $540,000.00 / $4,903,350.00
MSU / 65 / 110,146 / 27 / 90,146 / $5,859,490.00 / $540,000.00 / $6,399,490.00
NW / 55 / 107,856 / 27 / 87,856 / $4,832,080.00 / $540,000.00 / $5,372,080.00
Avg / $55.43 / 108572 / 27 / 88572 / $4,915,438.14 / $540,000.00 / $5,455,438.14
Total / / 760007 / / 620007 / $34,408,067.00 / $3,780,000.00 / $38,188,067.00
$ (in thousands) / % of total
Patient care $ 2,105,492.00 / 91%
Student res fees $ 74,759.00 / 3%
Other $ 139,410.00 / 6%
Total $ 2,319,661.00 / 100%
$ (in thousands) / % of total
Patient care $ 2,020,166.27 / 91%
Student res fees $ 71,729.37 / 3%
Other $ 133,760.37 / 6%
Total $ 2,225,656.00 / 100%
"Other" operating surplus $5,649.63
* see discussion for assumption in calculating proportional expenses
Revenue per game as proportion of operating surplus: