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Post by AustinHoya03 on Apr 27, 2005 2:04:17 GMT -5
Admin,
Can you re-edit my post to "patting each other on the back" rather than "jerking around?" I think the latter phrase changes the meaning of what I originally said. I apologize for the juvenile reference to autoerotic behavior.
Done.--Admin
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Post by FromTheBeginning on Apr 27, 2005 7:48:25 GMT -5
What we need to do is make the administration look at the renovation as a stand alone project - not part of an overall campus plan. Put in the legitimate priority of university needs it is way down the list. But if a revenue (donation) stream can be identified that is only for the arena project, we might be able to change that thinking. What I mean is this. The administarion must be made aware of the fact that donors exist that will give $$$ to the arena project that they will not give to the university in the normal course of giving, no matter how the campaign is labeled. The arena must be address as a seperate project so donors know that their $$$ are going directly to that project and not the science bldg, etc. This is not to diminish the need for these truly deserving projects, but I think there is a distinctly different pool of donors for this particular project. Who knows, maybe The Donald would like to have the John Thompson Jr. Court part of the Trump Center @ Georgetown University and see it on CBS & ESPN on a regular basis.
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Post by aleutianhoya on Apr 27, 2005 7:49:31 GMT -5
OK, Cambridge. I'll take the bait. Previously, I pointed out that you completely forgot students, and you remedied that. But your analysis of ticket sale revenue is still too simplistic.
According to the season ticket brochure, and guhoyas.com, season ticket holders pay less than the single-game ticket rate of $22.50. If they order before a certain time, they pay only $16.40/game ($250/14); after that time, they pay $20/game. I'll assume (without any real knowledge) that 50% of tickets sold in the 22.50 range are actually sold to season ticket holders and of those, 50% get off their behinds to take advantage of the super-reduced rate. I think both numbers are conservative.
There are a small number of season ticket holders in the $15/ticket range (including, I think, the young alumni section)....but it's probably negligible enough to not take that discount into account.
You need to do the same calculation with student season tickets. I'd guess that--averaging the crappy games (where probably ONLY student season ticket holders come)--and the big games, where the majority of students there are non-season ticket holders, that half of the student tickets sold are season tickets. Again...probably conservative.
Finally, I would reiterate that any scientific estimation needs to at least take a conservative estimate of attendance inflation into account. The University has admitted that this happens in the past (every other school does it...we'd just look even worse in attendance than we really are if we didn't join the parade); we don't know by how much. Conservatively, I'd suggest putting 500 into your calculation, though I think it's more like 1,000 on average.
That takes care of direct revenue from tickets, but that's only part of the story. In addition to the lost opportunity cost of not being able to sell concessions (a considerable amount of money we don't have access to that any analysis comparing the MCI arrangement with a potential new gym would have to consider) there are other direct costs involved in playing at MCI: transportation. All the students, band, and cheerleaders get bussed over there; all of the staff have to park (I'll give the benefit of the doubt and say that the parking fee is waived as part of our rent, but I'm not so sure that's true!). So...let's just take the busses. At the outset, I admit that I know little about the cost of renting busses except that it's more expensive than we'd all think; I think the Hoop Club said it cost about $1000 to rent a bus to go up and back to Rutgers (but I yield to anyone with better information). Based on that, I've got to assume it's a couple or three hundred per bus. Yah, it's a lot shorter trip, of course, but a lot of that cost is probably start-up costs anyways that don't depend on distance. Does anyone know how many busses on average we use? I guess you would take the average student attendance you have and divide by 40...I know they don't get enough busses for every student, but the difference is probably made up for by the fact that they need a few busses for cheerleaders and the band.
Goodness, there's probably a lot more we're not thinking of that all adds up, too. Newspaper advertisements in the Post before every game? Those aren't cheap. We advertise on the radio too. If we had our own arena, that wouldn't be necessary--or at least not necessary before every game.
Speaking of print advertisements, that adds another complication to the ticket-price calculation. We had a couple of promotional 2-for-1 games that I remember seeing (that's in addition to the comps we give out every game to community groups that you've already factored in).
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YB
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Post by YB on Apr 27, 2005 9:01:08 GMT -5
Austin- the reasons I didn't address your "math" were: 1. you're shooting blind; and 2. you're missing the bigger picture.
I know- because I've talked with the appropriate people about this- that the program has lost money every year in the last 10 except the years we made the dance, 1995, 96, 97, 01. We made money those years because of the Tourney shares and slightly increased attendance (and 95-97 we were in USAIR Arena, with a better rent deal). When we don't make the dance tho, we don't make money. It's that simple when you break even on ticket sales (or lose money) and you have other expenses that have to be accounted for. And while I certainly hope and expect that we will be dancing much more frequently in coming years, the breakup of the NBE in 5 years does present a looming problem.
As for if the downgrading of the hoops program is a possibility, yes, it is. There are parties on the board of directors that fondly remember an all-male, homogenous Georgetown and would like it returned to such. They may not hold sway now, but if we are forced in with the Catholic non-FB schools and are drawing less because of it, with less money from TV, and the hoops program is losing money considerably because of the rent we GUARANTEE to MCI, those reactionary forces have a lot more sway. Especially with $700 million in debt to pay off on a bad interest rate and decreasing University credit rating.
GU's hoops program is coming up on a turning point, much like it did with football years ago. They axed the FB program because it was too expensive to rent RFK and we were too small a school to support it. Think they wouldn't do that to Basketball if MCI rents were still high and we were lumped in with a bunch of non-drawing small Catholic schools?
In a heartbeat.
We HAVE to address this now. I agree with FTB, btw, on the fact that this has to be stand-alone: not part of a bigger drive. It has its own constituency and is not really connected with the Science Center et al.
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Cambridge
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Post by Cambridge on Apr 27, 2005 10:41:40 GMT -5
First off Aleutian...I can't take credit for Austin's hard work.
Second of all, I commend Austin for being the only member thus far to even attempt to put some real numbers on this issue. I'm tired of hearing rhetoric, when I want solid numbers.
While this model might be flawed, it already addresses many of the critiques lobbed at it. For example, contrary to Aleutian's claims, it already takes into account attendance inflation at the exact rate suggested by Aleutian. As for the others, they are for the most part valid, but until we get more solid numbers, I'll take Austin's numbers -- with a grain of salt mind you -- as the most accurate model to date. However, as soon as more data becomes available or until someone can produce a better economic breakdown, it is very disingenious to just dismiss his math. You might not like the number breakdown...hell, I don't like the breakdown...but the fact that it's much closer to break even than I ever could have imagined explains to a large degree why the cash strapped university has acted the way it has acted.
Now, I'm open to more debate and would love to see counter arguments, but I see no value in blanket statements and wooisus lamentations if there are no hard or even speculative numbers to back them up.
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hoyabinx
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Post by hoyabinx on Apr 27, 2005 11:37:21 GMT -5
Two logistical questions I have:
Could we build the arena in Rosslyn? (to avoid neighborhood resistance)
Once money is in place, how long would it take to build the arena?
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hoyahoyasaxa
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Post by hoyahoyasaxa on Apr 27, 2005 11:45:53 GMT -5
What about a floating arena on the Potomac? We could start each game at Old Town, and then float upriver to Sequoia after the game. It would be perfect for pregame/postgame activity.
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nodak89
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Post by nodak89 on Apr 27, 2005 11:49:11 GMT -5
What about a floating arena on the Potomac? We could start each game at Old Town, and then float upriver to Sequoia after the game. It would be perfect for pregame/postgame activity. Excellent! We could dock it at the boat house.
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HoyaChris
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Post by HoyaChris on Apr 27, 2005 12:04:53 GMT -5
I don't want to jump completely into this discussion right now, but for what it is worth, the rent at MCI was reduced substantially from the $85,000 per game level a couple of years ago.
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YB
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Post by YB on Apr 27, 2005 12:16:29 GMT -5
I'd like to make a note to the "Show me the numbers" group: No one on here has the exact numbers or will show them to you here. 2 reasons for this:
1. While we break even at MCI DURING THE GOOD YEARS, there are several variables here that make a difference: contracts with opponents, team expectations, other costs (equipment, etc). After all, if we only break even on our main revenue source, that leaves us in a big hole in terms of paying for actual expenses.
2. The bigger picture is more important.
I guess the reason you and I differ is because you don't seem to see there as being a real financial necessity. What I see differently is that we only break even on MCI REVENUE- not on all revenue and expenses, net. If you have no real revenue (break-even AT BEST at MCI), you can't pay for other expenses. Hence the program as a whole losing money, even in comparatively good times.
If you want the numbers, call the Athletic Department. I'm sure they can furnish you with something.
BTW, I also see this argument as being the best reason to give to the program and join the Hoya Hoop Club. After all, the more expenses they pay for the less we have to rely on program income.
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SoCalHoya
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Post by SoCalHoya on Apr 27, 2005 12:17:05 GMT -5
Can we dome the MSF and play there!?
What if we pledge to donate to the Science Facility/JTCC at McDonough at a 50/50 rate? So, I would pledge $1000 to the school, but only if that money 50/50 to the two projects...
Even though I was SFS, I too realize that a science center is long overdue. But it doesn't mean that fundraising for one cannot coexist or even (gasp!) complement each other.
One idea I had that may help honor JT Jr. is to name the Science Building after him. I know that sounds funny, and maybe we'd lose a lot on the media side, but if I were JT I might think it a great honor to have the Science Center named after me. That would also solve the McDonough naming dealio. JT Jr. really was an academics-first type of guy. Just a thought.
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Post by AustinHoya03 on Apr 27, 2005 13:20:20 GMT -5
For the record, I wasn't trying to be confrontational when asking for criticism of my analysis, though after re-reading my post I think most people probably read it that way. I'm more concerned in getting the numbers right in order to provide all of us with a financial yardstick whenever this issue arises (about every month it seems).
Aleutian, you made some good points which will be incorporated into the new model. Specifically, I'm going to increase attendance inflation to 1500 to be on the safe side, include transportation costs, and re-work the average ticket price figures once I make some inquiries into how many season tickets we sell.
Average Attendance - 2500 comps/game - 1500 inflated attendance/game = Real Average Attendance
RAA x Average Ticket Price (TBD) = Average Revenue per Game.
AR/G - MCI Rent ($85,000) - Transportation Costs ($1,000) = Average Net Income
Any further comments/suggestions are welcome, especially if anyone has accurate season ticket data so I don't have to try and squeeze it out of Sports Information.
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Cambridge
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Post by Cambridge on Apr 27, 2005 13:34:37 GMT -5
For the record, I wasn't trying to be confrontational when asking for criticism of my analysis, though after re-reading my post I think most people probably read it that way. I'm more concerned in getting the numbers right in order to provide all of us with a financial yardstick whenever this issue arises (about every month it seems). Aleutian, you made some good points which will be incorporated into the new model. Specifically, I'm going to increase attendance inflation to 1500 to be on the safe side, include transportation costs, and re-work the average ticket price figures once I make some inquiries into how many season tickets we sell. Average Attendance - 2500 comps/game - 1500 inflated attendance/game = Real Average Attendance RAA x Average Ticket Price (TBD) = Average Revenue per Game. AR/G - MCI Rent ($85,000) - Transportation Costs ($1,000) = Average Net Income Any further comments/suggestions are welcome, especially if anyone has accurate season ticket data so I don't have to try and squeeze it out of Sports Information. Don't forget to note HoyaChris's statement and potentially forthcoming information on a reduced MCI Rent...
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YB
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Post by YB on Apr 27, 2005 13:37:28 GMT -5
Austin- All of the above you mentioned is not a bad way to measure MCI revenue, but does not take into account BE TV revenue, NCAA shares, or travel and other expenses.
In other words, it's just a piece of the puzzle.
Average cost per ticket will be a toughie due to all the different levels:
HHC season tix @16.50/ticket Reg season tix @ 20/ticket Indiv game tix @22.50, 15, 10 & 5 a ticket YAs season tix @14/ticket Students season tix @6.75/ticket Students individual tix @10/ticket
Gonna be a mess to figure out without help....
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Post by AustinHoya03 on Apr 27, 2005 13:52:41 GMT -5
YB,
I agree with the statement the program is in the red overall, and I made that statement myself in an earlier post. But I think other costs are somewhat irrelevant to the discussion. Those costs are going to continue to be there even if we build a new stadium tomorrow. Likewise, NCAA revenues will be the same whether we build a new stadium or not. We are talking only about the profitablity of the programs current and potential arenas. More specifically, the question we are concerned with here is: should we plunk down $40M now (or five years from now) for a new stadium that would guarantee a profit in ticket revenue (potential revenues of $1.8M/year) OR should we keep our $40M to play in a stadium where we have the potential to lose money but also the potential to make over $2M/year? If you had no cash on hand, and you're not risk-averse, you'd probably choose the second option, which is what the administration has done.
You've made no attempt to answer the above question, only told me I'm "missing the bigger picture." But I agree with you on the big picture! We need an on-campus stadium, the sooner the better. But it's ridiculous to clamor for a stadium without realizing the need for its construction has to be weighed against other factors. I think most reasonable people, presented with the above question, would say the administration is being reasonable in continuing to play games at MCI for the time being while concentrating on bigger priorities for the Univeristy. You seem to want to throw all considerations out the window so the Administration can fulfill the hopes and dreams of the HoyaTalk board. I'm just trying to bring the factors the University actually has to weigh when making such decisions, namely dollars and sense, back into the dialogue.
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Cambridge
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Post by Cambridge on Apr 27, 2005 13:54:04 GMT -5
Austin- All of the above you mentioned is not a bad way to measure MCI revenue, but does not take into account BE TV revenue, NCAA shares, or travel and other expenses. Those would be factors in a home arena as well? No? How does that effect this calculation specifically? Just asking...I see the transport to and from MCI...but I think Austin agreed to tackle that cost.
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Post by AustinHoya03 on Apr 27, 2005 13:54:23 GMT -5
Austin- All of the above you mentioned is not a bad way to measure MCI revenue, but does not take into account BE TV revenue, NCAA shares, or travel and other expenses. In other words, it's just a piece of the puzzle. Average cost per ticket will be a toughie due to all the different levels: HHC season tix @16.50/ticket Reg season tix @ 20/ticket Indiv game tix @22.50, 15, 10 & 5 a ticket YAs season tix @14/ticket Students season tix @6.75/ticket Students individual tix @10/ticket Gonna be a mess to figure out without help.... Thanks for the info: I'll ask for the board's help if the calculations become sticky, and of course I'll open up my methodology for criticism/comments as well.
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EasyEd
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Post by EasyEd on Apr 27, 2005 15:27:01 GMT -5
I know there is a great interest, deservedly so, in having a new arena named after JT but maybe we have the best chance of getting one if we went out and offered to have a company build an arena/convocation center with naming rights. JT could be honored in another way.
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YB
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Post by YB on Apr 27, 2005 16:49:12 GMT -5
Austin- I suppose it's just a different way of looking at it. Some of the expenses don't vary much (travel). Some vary a lot (equipment, medical costs, NCAA revenue). The NCAA revenue thing is a big variance, and can be counted on as revenue arising from a new arena. We've made the dance once in 7 years, that's 3 shares in 7 years. Not too good. An actual home advantage would give us likely 1-2 games a year. That would have gotten us in in 2001-2, for maybe 1-2 more shares. That's significant.
Especially with our conference situation being so up in the air in 5 years, it behooves GU to set up its future now. Schools like us are falling by the wayside in college athletics because our revenue streams are not enough to attract and keep top coaches, among other things. If 3 leaves and the NBE breaks up, then what? We are making ZERO revenue playing in a mauseleum we can't fill in a high-cost sport. Say adios to big-time hoops.
The exceptions have been Gonzaga, which gets great attendance and is building a new arena (only game in town), Villanova (has a new on-campus arena), and potentially Saint Joes (plays in CBB's mecca, the Palestra), St. John's (on-campus arena and some games at MSG), Xavier (NICE on-campus arena), Marquette (Final 4 + building on-campus arena), DePaul (Chicago, plus rents a smaller arena).
7. Out of how many? Schools like us, SHU, PC are on the brink of irrelevance. We have to take the years of bounty we have coming with the NBE and 3 and convert that into investing in our future. All the successful peer schools are doing the same. The unsuccessful ones have their heads in the sand like us.
Bottom line: College hoops is changing, has been for 15 years. It's more expensive now, and requires the fanbase that football brings unless you can make your program into its own high-revenue sport. If we don't realize that, we get left on the scrapheap of hoops history.
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Post by TrueHoyaBlue on Apr 27, 2005 18:30:38 GMT -5
Not that this is necessarily the place to get into it, but YB, your argument flows from a completely erroneous assumption -- that most D-1A football schools subsidize other sports with football money.
The problem is that about 80% or more D-1A football schools lose money on football, so it ends up costing them more for other sports.
While there is often money from t.v. contracts, that's not likely to be the case with the Big East football schools (sans Miami and Va Tech).
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