UM to receive $6 million for 2017 opener

Submitted by si_daddy on February 7th, 2014 at 1:07 PM

I guess we're getting 6 Mil for the Jerryworld thing in 2017 against Florida. Wonder if we'll bring the band. Here's the link: http://www.washingtonpost.com/sports/colleges/michigan-to-receive-6-million-for-2017-opener/2014/02/07/2cfbc0d2-901f-11e3-878e-d76656564a01_story.html

Didn't see this anywhere so just thought I'd post the info. I don't know how it compares to the money we got for the last one, or if people think it's worth it.

 

Comments

ish

February 7th, 2014 at 3:25 PM ^

$6M represents almost exactly a 5% per year increase from 2012 through 2017.  since 2012, inflation has averaged approximately 1.7 percent and almost all forecasts are for future inflation to average approximately 2%.  that means that the payment increase will be approximatley 3.1% per year from the 2012 game, net of inflaton, plus the free tickets for the band.

Wolverine Devotee

February 7th, 2014 at 1:24 PM ^

It's only a matter of time before Michigan plays a ND-like stadium series for alumni in other hubs like NYC.

I can see it already

  • Sun Life Stadium (Big Daddy Ross' house)- I definitely think Michigan owes him a game down there at the very least.
  • Citi Field (Fred Wilpon/NYC)
  • Gillette Stadium (Baastan alumni)
  • Solider Field

ScruffyTheJanitor

February 7th, 2014 at 1:37 PM ^

not suprising. The reason it becomes slightly more likely I just stop caring about college football is the way that NCAA keeps letting these "events" as well as the bowl game system continue even though the biggest benefit is not for CFB, but for the corporate sponsors and bowl game comittees. No one has explained to me yet how "the Chik-Fil-A season opener" or whatever is better for college football then, say, a home-and-home. Whatever. 

bubblelevel

February 7th, 2014 at 1:39 PM ^

Might make more than 6mm for a home game in proceeds but did any of you bitchy turds think of the cost to put on a home game versus travelling?  Profit margin may not be something you are familiar with....

Home openers are also notorious for being cupcake games. 

 

You people are insufferable.  The team/players like it.  It is good publicity.  It's a better opponent than you would typically get for this game.  Scheduling is a right pain in the ass as the play-offs start because everyone is going to balance winnable games with strong opponents to help them without overdoing it.

 

michgoblue

February 7th, 2014 at 1:56 PM ^

I agree with every single word you wrote here.

I expect that the cost of traveling to the game in Dallas is a fraction of the cost of hosting a game at the Big House.  So even if the revenue is roughtly similar,the net profits will be way bigger from the Jerryworld game.

Also, so many people around here complain about the cupcake non-conference schedule, but when we fnially schedule a big time game, people still find a reason to bitch because it is not at the Big House.  Teams like Florida don't do one offs on the road, so any Big House game would involve an away game during a subsequent season.  Then people would bitch about the lack of home games.

Personally, as a die hard Michigan fan, I don't think that there is a better atmosphere on game day than the Big House and Ann Arbor.  But, the current landscape of college football is that many, many people love these types of games.  I bet if you polled the team, over 75% would vote in favor of this.

Then, add in the media factor and exposure.  We are guaranteed to be the prime time, nationall televised, College Gameday game for opening weekend, giving us national exposure, some relevance and cool factor for recruits?  How is that a bad thing.  If this game is played in the Big House or the Swamp, you lose some of the media hype of being called Kickoff Classic or whatever other stupid name Jerry decides upon.

As a traditionalist who maintains a well manicured lawn and would appreciate if the young whippersnappers would please not walk on it, I do get the hand wringing and overall dislike of these types of spectacles.  But, we don't live in the 1970's, 80's or even 90's, so we may as well accept where things are today and try to enjoy games like this.

Aero01

February 7th, 2014 at 2:12 PM ^

My main complaint is as a season ticket holder.  The cost to hold season tickets is getting absolutley ridiculous and the home schedule is gettin worse and worse.  I would certainly rather lose a home game every other year if it meant scheduling a quality opponent for a home and home. 

michgoblue

February 7th, 2014 at 2:49 PM ^

That's a fair complaint.  If I were a student or season ticket holder, this would bother me, as well.  But, keep in mind that season ticket holders really do only represent a small fraction of the total fanbase.  As a national university, a very large number of our alum are scattered over the 50 states, and even within the state of Michigan, only a small percentage have season tickets. 

Again, though, your point is certainly fair with respect to season ticket holders who do have to miss out on a game.

Bryan

February 7th, 2014 at 2:02 PM ^

A post for a while back that broke down the costs and it was pretty much negligable the amount of profit made for a neutral site game. 

I hate neutral site games. Just play home and homes. I would absolutley love the chance to travel to an ACC/SEC venue to watch M play. 

Blake

February 7th, 2014 at 2:41 PM ^

I'd add that a Jerry Jones money grab is also very short sighted in that it further erodes the benefit of purchasing season tickets.

As was outlined a few weeks back when Seat "Donations" were due, many in the fanbase are at a tipping point with the price vs. value in purchasing season tickets when you take per game ticket cost + PSD's into account.

If the trend is for more premium games to be played in neutral sites like the Alabama and now Florida games...what is the benefit to me as a season ticket holder? Wouldn't you want to award your most loyal fans with a top notch game that helps to justify the costs they are paying for our seats?

It's not like our PSD's go down if we play 1 less home game...in effect it's a per-game increase in prices for us to most likely stay at home and watch Michigan and Florida on tv hundreds of miles away in a soulless pro stadium.

Section 1

February 7th, 2014 at 2:08 PM ^

that Brian Cook deconstructed, HERE.

Scheduling isn't that hard.  You've made the unforgiveably dumb mistake of thinking that the choice is between scheduling a tomato can, and playing a big neutral field game.  Wrong.  The other choice is a high-profile home-and-home series.  As OSU and MSU have done.  As Notre Dame does every year.

I simply do not understand how it is preferable for players and coaches, to go once to Dallas, instead of playing Florida once in Ann Arbor and once in Gainesville.  You can explain that one.

 

bubblelevel

February 7th, 2014 at 2:27 PM ^

Brian Cook would meet Jesus Christ and then write how he smelled as is he didn't shower much and was prone to speak in proverbs.....

Brandon has resurected several major businesses and made millions/billions.  Brian has a blog.  I am willing to bet Brandon has a lot of variables that he weighed in a decision like this and upon viewing all of the facts decided upon the worst possible thing for the University of Michigan and the football program in all of written history.

Brian is no Messiah and he may just be a very naughty boy

michgoblue

February 7th, 2014 at 2:46 PM ^

The problem with Brian's desconstruction is that it is not accurate.  No disrespect to the proprietor of this fine blog, but his numbers miss several large ticket items:

1.  Insurance - the cost per game for the university to insure an event of the size of a Michigan home game is well over $100,000.  I don't have exact figures, but the premium is likely several times that amount, alone.

2.  Staff - most of the staff that works on game day - venders, food staff, ushers, parking attendants, etc. - are paid per diem or hourly.  No game means no pay.  Given the number of game day staff, likely over 1000, this is likely a six figure savings, as well.

3.  Merchandising - Brian mentions missed revenue from merchandising.  I think this is wrong.  The Jerry'sworld contract provides that we get a dedicated vender at the game.  Why do we believe that the university will sell more M logo stuff at a home game than at a neutral site game?  Sure, only 1/2 of the fans are Michigan fans (as opposed to the likely 80-85%), but I expect that the fans traveling to the game in Dallas are more likely to but a Michigan t-shirt than the fan at the Big House, mand of whom attend several games a year.  Also, if they win, the university will sell a ton of 2017 Kickoff classic shirts, which would not happen for a standard home game.

 

Section 1

February 7th, 2014 at 2:57 PM ^

Do we pay insurance premiums on a per-game basis, or on an annualized basis?

Merchandising:  Just look at the revenue figures I posted below.  Merchandising is such a remarkably small part of Athletic Department revenue.  I'm pretty amazed at how small it is.

I look at the revenue numbers, and it occurs to me that "Our season ticket holders and PSD-licensees are our core audience and largest revenue source.  How can we better serve them?"

Now I didn't write Brian's post from August of '12; I sure can't take credit for it, and I can't defend it in all of its detail.  But if there are very specific issues with Brian's numbers (I respect your attempt, even if I'm not buying it), let's hear it.  I don't think Brian ever tried to make the point that Michigan got soaked by going to Dallas.  He only made the point that the deal was never going to be a windfall for Michigan.  And so in the end, if the money is a close call, the next question is whether it is more attractive to play a nuetral-field circus show, or a home-and-home with the same caliber opponent.  I side with Brian.

michgoblue

February 7th, 2014 at 3:05 PM ^

We pay an annual premium, but that figure is based upon the number of events, the types of events, etc.  So, yes, while we do not have a line item for the premium associated with each game, the total premium is significantly higher or lower based upon the number of games.  It's no different than if your family took our an auto policy.  You pay a single premium regardless of the number of vehicles.  But, if you had one vehicle, you premium could be $1,500, whereas for 4 vehicles, it would be over $5,000 (all numbers made up).

On the revenue items, I am surprised at how small of a figure that amounts to. 

On your final point, I suspect that our difference of opinion relates to our views on these types of games.  While you note that "if the money is a close call, the next question is whether it is more attractive to play a nuetral-field circus show, or a home-and-home with the same caliber opponent. I side with Brian", I would choose playing the neutral-field circus.  Sadly, Michigan football has fallen so far from being relevant on the minds of so many kids that we recruit.  These games, circus-like or not, do help keep our name out there.  ESPN - where most kids watch their daily sports coverage- has a vested interest in hyping our game (and even our program) when we are the kick-off prime time game.  If the RR years have taught us anything it is that media coverage (positive vs. negative) and perception can really help or hurt a program.

Don

February 7th, 2014 at 3:47 PM ^

Then why play any games in Michigan Stadium at all?

For some bizarre reason, you apparently believe that a game played against Florida (or Georgia or Texas or USC or LSU, etc.) in Ann Arbor can't be scheduled for prime time and won't draw any media attention.

LOL.

 

michgoblue

February 7th, 2014 at 4:30 PM ^

I don't necessarily prefer a game in a neutral site over a game in AA under all circumstances.  But, for a one off event, I can see the many benefits that a game like this provides.  I also see the many benefits of a top flight game in Ann Arbor.  It isn't a binary decision - home game or neutral site game.  Since both have benefits, having a mix of the two seems like a nice way to realize the benefits of both.  I like the idea of scheduling a game like this, but I also advocate for bringing some better teams to the Big House. 

Final point - while I have said that I like the ida of this game, I only like it as a one-off type of thing.  I would never want this to become a regular thing. 

LSAClassOf2000

February 7th, 2014 at 2:06 PM ^

One thing that I believe that I remember hearing at some point is that the baseline budget for each season is based on six home games. As I recall from the future schedules, 2017 sets up similar to 2012 in that we would have seven home games potentially if we did not involve ourselves in a game such as this. I assume that we do make more (based on 2012's $46.447 million in ticket sales revenue alone) on a straight home game, but if budget is made in these sorts of years, anything else seems like it is bonus territory after that. If this is the case, I see why they feel at relative ease scheduling these games now and again. 

 

Section 1

February 7th, 2014 at 2:32 PM ^

I was surprised to see the numbers; just how critical PSD's are.  PSD's are a larger part of annual revenues, than all of the Conference-shared tv contract rights.  Larger, by far, than merchandising and licensing royalties.

The for-sale bottled water that everybody complains about?  It's chickenfeed, compared to the PSD amounts.  I'd happily buy water for a hundred people if they relieved my PSD.  All of the familiar Brandon-Bitch comments --  uniformz; lousy stadium nachos; Arby's advertisements; Big House bar mitzvahs -- they all recede into insiginifance, compared to what the PSD-licensees are paying.  You know; the people paying all that cash for the right to pay full price (chalk that up in the "Ticket Revenue" department, just above PSD's) for tickets that will be worth half of the full price in the marketplace. 

 

the-need1

MGoManBall

February 7th, 2014 at 2:28 PM ^

I know Michigan has expenses at its home games.. but multiplying $100 per ticket times their 109,901 capacity, that's a lot more than $6 million dollars.

 

Not exactly a square deal for UM.