UConn athletic department deficit reached $42 million in 2019 with a decline in ticket sales and league revenue

[ZooCougar]

The biggest issue is technology. Apps and second-hand market place have become so efficient a marketplace that buying direct at full price doesn't make sense. I think people, reflexively, go to the secondary market for their tickets.

Just another technological disrupter out there. Exchange of tickets is easier. This is issue is something all sports have had to deal with.

I know MLS uses SeatGeek to distribute tickets to STHs. And STHs sell their tickets on SeatGeek. UConn needs a partnership like that.

 

[CL82]

Says in the article in 2021 it will start getting better, which would make sense since that is when travel savings and increased TV revenue will be realized. I have updated the spreadsheet for the increase in donations and from an earlier critique changed it from an annualized calculation to a NPV analysis. UConn will come out ahead, it just won't be realized overnight.

It's very good reporting by HC and Putterman, but don't get too caught up in the headline.

Always open to comments and critiques on how to improve this.

Do you have a link to the travel expense #. That's higher than the numbers I remember them talking about.

 

[Irishfan]

In 2014, the football team brought in $5.2 million in ticket sales and $2.1 million in donations. UConn went 2-10 with a home slate of BYU, Stony Brook, Boise St., Temple, UCF, Cincinnati, and SMU. In my opinion, if UConn starts winning, football revenues will rebound sharply.

Seven home games, a 40,000 seat stadium, and 125,000 alumni that live in the state of Connecticut equate to a net revenue of $3.3 million. That seems unreasonable.

 

[CL82]

Football, however, is another story. I remain hopeful and supportive, but nothing has changed my belief from the moment we went independent that I don't see how we can keep football going as an independent for very long.

That was my initial impression BL, but I was heartened by the announced schedule and the interest we are getting. I still do not know if will work, but I feel better about it.

 

[Storrs South]

Do you have a link to the travel expense #. That's higher than the numbers I remember them talking about.

The travel expense has often been cited as between $1.5-$2 million annually, which is being accounted for between 2020 to 2032 (12 years) and discounted back.

Here's one source of where the $2 million per year comes from: Fasano calls for UConn Foundation to fund school’s move from AAC to Big East

The exercise is not to show the Big East contract is better than the AAC, but rather that a market participant in UConn's situation is better off going to the Big East than staying put since these types are savings are exclusive to UConn and only UConn in the AAC.

 

[CL82]

The travel expense has often been cited as between $1.5-$2 million annually, which is being accounted for between 2020 to 2032 (12 years) and discounted back.

Here's one source of where the $2 million per year comes from: Fasano calls for UConn Foundation to fund school’s move from AAC to Big East

The exercise is not to show the Big East contract is better than the AAC, but rather that a market participant in UConn's situation is better off going to the Big East than staying put since these types are savings are exclusive to UConn and only UConn in the AAC.

Got it. I couldn't reconcile the $2M figure to the $13M one. I understand why you took that approach.

 

[Husky25]

Um, so the mere mention of FCS in light of the deficits and the attendance declines presents some sort of bias? Am I missing something bigger Putterman has said on this subject in the past?

Yes. Read @JohnFSilver 's response to my first post in this thread.

Dropping to FCS does not materially costs while having a drastic effect on revenue.

 

[BlueMAB]

I don’t view this as a loss but as a decline in potential profit. A matter of how you report imo.

Revenues.

Other than that you are correct.

 

[ZooCougar]

We can’t live and die by tickets sold. We need sponsorship revenue. I think the Big East and playing better more high profile opponents will help with that.

 

[Storrs South]

Got it. I couldn't reconcile the $2M figure to the $13M one. I understand why you took that approach.

The original calculation that you may have seen was annualized, but someone here pointed out it didn't accurately account for time value of money so I changed it to compared between now and the end of the AAC deal in terms of total money in today's dollars. So while they are not receiving $2 million a year, the net effect is $2 million less spent on planes that more positively affect UConn's balance sheet and/or could be used elsewhere.

 

[Exit 4]

Yes. Read @JohnFSilver 's response to my first post in this thread.

Dropping to FCS does not materially costs while having a drastic effect on revenue.

I dont think Putterman's reporting on UConn athletics budgeting has an "objectivity" problem, but rather an effort problem. Its far easier to look at the negative budget issues of the past several years and just go with the easy conclusion. I don't think he has an ax to grind here tilting him in a particular direction. The issue, in part, is that he has no particularly affinity for UConn sports, particularly UConn football, so it makes flip FCS comments even easier to pen. I would say I guy like Mike DiMauro has a very conscience objectivity problem with respect to UConn. Putterman is just someone that takes these matters on the surface and digs no deeper.

 

[uconnbill]

Putterman is just looking for click bait and nothing else. This is a way to get The Boneyard to talk about this again while he gets clicks on his article.

Moving is a positive as it will lower travel cost overall. Football just needs to win some. I think basketball will take care of itself by playing rivals from the past like Georgetown, St. Johns and other schools.

 

[Husky25]

I dont think Putterman's reporting on UConn athletics budgeting has an "objective" problem, but rather an effort problem. Its far easier to look at the negative budget issues of the past several years and just go with the easy conclusion. I don't think he has an ax to grind here tilting him in a particular direction. The issue, in part, is that he has no particularly affinity for UConn sports, particularly UConn football, so it makes flip FCS comments even easier to pen. I would say I guy like Mike DiMauro has a very conscience objectivity problem with respect to UConn. Putterman is just someone that takes these matters on the surface and digs no deeper.

I thought about including an "effort" angle in my initial post, but it's tough to get down on reporters in traditional print media, given recent news on current industry conditions and how thin the human capital is already seemingly stretched. Is it laziness or the pressure to produce eye-drawing content?

Another factor, which I cannot address intelligently, is in the editing. How different is the finished product from the submitted draft? How does the headline alter the intended message?

 

[Palatine]

What a joke.

This is cost accounting and projecting at its worst.

 

[Pudge]

The clear thing - Putterman has a Northwestern/B1G mindset. Though from Connecticut, he’s not tried to qualify his reckless words at times with the grand picture of a sport undergoing dramatic structural change. In 10 years, the financing of all things P5 are going to show a significant caste system. In fact, the PAC 12 etc also may lag. Great consequences of the realignment leads to a oligarchy of about 5-8 super teams. Like English Premier League.

UConn has to find its way. But so does about 40 others as the $ demands continue to skew the sport.

 

[CL82]

The original calculation that you may have seen was annualized, but someone here pointed out it didn't accurately account for time value of money so I changed it to compared between now and the end of the AAC deal in terms of total money in today's dollars. So while they are not receiving $2 million a year, the net effect is $2 million less spent on planes that more positively affect UConn's balance sheet and/or could be used elsewhere.

Reasonable.

FWIW, I like your approach on this in that you willingly adopt suggestion that make sense to you. You were quick to include the cost of the production capital outlay when I mentioned it as well.

I consider your figures/analysis to be a tool for visualizing the savings/cost of the move. I find it useful.

 

[ZooCougar]

So what would be the cost to the school in terms of # of applications and prestige if we were to drop down to FCS or drop football and de emphasize other programs in the AD.

Of course we want something closer to profitability, but I have to think the school is making some of this money back somewhere else.

 

[UCFBfan]

So why do we play our games in Hartford if they not only charge us rent, but keep all concession profits and parking fees? I get why we have to play at the Rent. But why aren't we forcing Hartford's hand? They need us at the XL more than we need the XL. If the winning starts and the Big East play attracts more fans, as expected, fans will travel to Gampel. If we are in the red by so much, one area we should be looking to cut or increase money should be at the XL. Force Hartford, mainly the state's, hand. They want to be able to keep the XL open and active and without UConn, that's a hard sell. So if they want us, pony up and help us out.

 

[uconnric]

So why do we play our games in Hartford if they not only charge us rent, but keep all concession profits and parking fees? I get why we have to play at the Rent. But why aren't we forcing Hartford's hand? They need us at the XL more than we need the XL. If the winning starts and the Big East play attracts more fans, as expected, fans will travel to Gampel. If we are in the red by so much, one area we should be looking to cut or increase money should be at the XL. Force Hartford, mainly the state's, hand. They want to be able to keep the XL open and active and without UConn, that's a hard sell. So if they want us, pony up and help us out.

It's a lot easier to go to a game in Hartford than Storrs, especially for New Haven and Fairfield County fans. Plus there are an extra 6,000 seats in Hartford. UConn also needs XL to be successful.

 

[UCFBfan]

It's a lot easier to go to a game in Hartford than Storrs, especially for New Haven and Fairfield County fans. Plus there are an extra 6,000 seats in Hartford. UConn also needs XL to be successful.

No offense to those outside the Hartford area but if we need to get creative, we need to force the state's hand and seriously show a push out of the XL. Only schedule pre conference games there. All BE games are on campus.

Question, how many XL games are sold out that the extra 6k seats are filled?

I just think it's a flipping joke that the state charges it's state U and keeps the majority of the profits while it watches it whither on a vine due to finances and expendetures. There's only so much the AD can do to cut the deficit. Cutting out paying rent or getting the state to lower it and/or giving the University a cut of concessions, etc would help.

Considering that without UConn the XL would be a ghost town, I don't see how a hard ball approach wouldn't be the way to go.

 

[jdb50]

The XL "rental" fee needs to be addressed with all concessions and parking going to city coffers in addition to giving restaurants and bars a boost. But with a $40 million deficit two years in a row what has the Athletic Dept done to face the facts. Any reduction in administration costs? Any reduction in sports that no one watches or goes to? They have to show some effort other than running up a tab and underfunding the football coaching staff to make it no where near it's peer competitors.

 

[BlueMAB]

Question, how many XL games are sold out that the extra 6k seats are filled?

Sunday didn't sell out, but 4k+ more fans went than would have been able to go had the game been in Storrs.

More fans in the seats is always a good thing.

 

[hardcorehusky]

Seven home games, a 40,000 seat stadium, and 125,000 alumni that live in the state of Connecticut equate to a net revenue of $3.3 million. That seems unreasonable.

Season tickets for UConn games in the chairbacks required a seat donation of over $750 per seat. That boosts revenue quickly

 

[JohnFSilver]

What a joke.

This is cost accounting and projecting at its worst.

No offense to those outside the Hartford area but if we need to get creative, we need to force the state's hand and seriously show a push out of the XL. Only schedule pre conference games there. All BE games are on campus.

Question, how many XL games are sold out that the extra 6k seats are filled?

I just think it's a flipping joke that the state charges it's state U and keeps the majority of the profits while it watches it whither on a vine due to finances and expendetures. There's only so much the AD can do to cut the deficit. Cutting out paying rent or getting the state to lower it and/or giving the University a cut of concessions, etc would help.

Considering that without UConn the XL would be a ghost town, I don't see how a hard ball approach wouldn't be the way to go.

It is accounting mechanisms that make it appear worse. If UConn athletic department went away, the $17 million that are spent on scholarships wouldn't actually save the school that money. Actually, that would be a decline in tuition revenue of $17 million, and would go as a reduction. Can they make that number up somewhere? I don't think that saves the school money to eliminate those scholarships.

Just basic managerial accounting a work. This can really be abused if you want it to (UConn is accounting it correctly though):

"Also of use to financial planners are imputed costs. These are costs that are not actually incurred, but are associated with internal transactions. When work in process is transferred from one department to another within an organization, a method of transfer pricing may be needed for budgetary reasons. Although there is no actual purchase or sale of goods and materials, the receiving department may be charged with imputed costs for the work it has received. When a company rents itself a building that it could have rented to an outside party, the rent may be considered an imputed cost. "

With that in mind, State entity is paying a state entity. Then, the state backfills UConn's deficits with state money. The circular logic can drive you crazy.

 

[hardcorehusky]

John - getting back on Putterman, I have always found it confusing that newspaper reporters who cover a beat wouldn't go out of their way to be fair but lean toward favoring the product. I don't see how you get more readers when you piss off those who should be reading the article. Opinion guys can do that but not the beat writer?