Increased Revenue from Renovated Big House
Has anyone seen anything that discusses how much additional revenue U-M will generate once the Big House renovations are completed? I have searched but could not find anything. I built a spreadsheet to do my own calculations and came to about $14 million per year (assumes everything sells out, but excludes any increased revenues from concessions or advertising which I am not sure how to model). Or has anyone discussed this with the Athletic Department and have they offered any estimates?
Thanks.
Matt
August 25th, 2009 at 9:47 PM ^
football really needs to start.
edit - I really didn't mean this to be flippant response. I have often wondered this as well.
I just think we are all biting our nails and frantically thinking about the season so much that it would lead to something like you talked about. Hell, I have been thinking of creating a dungeons and dragons type scenario with our players and trying to play against other teams.
I was just looking for a reason to shout that out loud - and your post made me do it.
August 25th, 2009 at 10:08 PM ^
No prob -- it's a very anal question. I just have been thinking about it for awhile and thought maybe someone might be able to help me out (which he, thankfully, did).
August 25th, 2009 at 9:48 PM ^
This is a good question. I would assume there would be some answer in the original proposal to the Regents. You probably checked there, though.
EDIT: Actually, just checked Bill Martin's presentation, and the estimated additional revenue in Year 1 is $14,090,000.
http://www.umich.edu/stadium/project-description/pdf/stadium-presentati…
That's before the loss bench seat revenue. Plus, slide 6 suggests that 13M will be paid in the first year to the debt, making the total net gain from the new seats (in the first year, again) about 400K.
August 25th, 2009 at 9:53 PM ^
No, I didn't check there. I thought I had checked everywhere on the Mich web but clearly I didn't. Really, thanks.
August 25th, 2009 at 10:15 PM ^
It'll be interesting to see if this plan holds true. If it does, it suggests that the 200M debt will be paid off in 13M annual increments. That means it'll be about 19 years before it is paid off, or, 19 years before some of that new revenue can be dispersed to other programs.
This is not accounting for donations, however, which will probably make a sizable dent in there.
If anyone has a better handle on these financial dealings I'd be interested to hear your view - or if anyone else can dig up some new numbers, that would be great. The ones I found are several years old by now.
August 25th, 2009 at 11:25 PM ^
They have so much building going on, I think they will probably try to steer most private donations to other facilities. However, I think you will see (1) expanded use of the Big House (they already have a hockey game planned for 2010 and I would not be surprised to it rented out for concerts or other sporting events) and (2) advertising.
Ok, FWIW, I know the idea of advertising in the Big House kills everyone, but it gets harder and harder to resist every year. Who do you think they are selling half those luxury boxes to? Businesses. And what do you think those little logos are on the uniforms? Whether we like it or not, advertising in the Big House is going to happen eventually. I just hope they do it in a low key way. And maybe someone can explain to them they can put up two new super jumbotrons for about $6 million and sell $1.5 - $2.0 million of advertising per year on them. At least that way, we would get awesome new jumbotrons.
August 25th, 2009 at 10:19 PM ^
Martin's estimates assume they're able to sell all of the boxes, club seats and bleachers. This has clearly been an issue, seeing all the emails I've received from the athletic department about discounted ticket packages for this year and reserving club and suite packages for 2010+. It seems clear that demand is down for bleachers (not sure how, when the waiting list is supposedly so long). Seeing that the prices for the premium seats will be reduced, and may not all be sold, I hope we come out in the black in the near future.
On another note, I HATE the renovations.
August 25th, 2009 at 10:32 PM ^
The athletic department announced a couple months back exactly how many suites and club seats are sold. It is over 70%, with the midfield locations oversubscribed. And that 95% of preferred seating donations were renewed. So I think the big problem is in the least expensive seats. That is understandable given 3-9. It will change fast if we start winning.
August 25th, 2009 at 10:20 PM ^
There's about $38.5M in capital/naming funds. $5M gets you a tower, etc. I did a post about this a bit at VB back in the day:
http://www.umvarsityblue.com/2008/06/anyone-have-a-couple-million-lying…
August 25th, 2009 at 10:30 PM ^
Good point.
August 25th, 2009 at 11:00 PM ^
Great stuff, Paul. That was an excellent read.
August 25th, 2009 at 10:37 PM ^
I'm trying to figure out how much overtime I'd have to work to make the ScoobyBlue tower a reality.
I also have to figure out how I can start getting paid for overtime.
August 25th, 2009 at 11:21 PM ^
The way I see it, all the named towers are formerly anonymous towers. Now they all have names. All your named towers are belong to me.
August 26th, 2009 at 11:55 AM ^
You have a good point. How about a joint custody arrangement for the ScoobyBlue Tower? You can have every other weekend, Thanksgiving and Christmas.
August 25th, 2009 at 11:18 PM ^
You would think we would make more revenue after the renovations are complete. I don't have the exact numbers though it will be interesting to see how much more we have.