Is men's BB now a "revenue" sport?

[DBT]

Now, I know that men's BB has been kind of paying its own way with, maybe, a little left over. But is men's BB now about to become a serious revenue generator? Does anyone have any idea what the men's BB budget is and what its income will end up being this year? The NIT had to have helped. Plus we had several sell outs this year. It looks to me like fan support for men's BB is about to explode.

 

[GoBuffs!!]

If its not revenue generating, there is something seriously wrong with their business model.

A few places I have seen said that Basketball is break even, but when you look closer, they are talking both mens and womans basketball, so basically the profit that Mens bball makes was paying for womans bball.

It also may be difficult to see with the new practice facility, and how they are showing those expenses.

 

[Mick Ronson]

It looks to me like fan support for men's BB is about to explode.

maybe. the only test would be to see how well supported a team that takes a step back next year, say, and wins ~15 games. could be more, could be less....but hypothetically speaking....15 or so. we lose a lot with Levi, Alex, Cory, Relphorde. Carlon Brown is a bit of an "x" factor, but i like the talent for next year's team.....experience, we don't know yet.

working in our favor: joining a new conference and seeing different teams than the old Big XII North schedule. but, CU has always supported a winner....whether or not we've created a durable fan base to supplement the core 4-5,000 CU hoops fans, we just can't know yet.

 

[MtnBuff]

Breaking even would be a great first step. If we can get to the point where men's BB is paying for itself and covering the deficit from women's BB the whole athletic program will be way ahead.

That said a consistent quality team in Boulder should bring in an average of over 8k per game. Add to that additional money gained from OOC road games as a more desirable opponent, some tourney money, and the associated increases in other related revenues such as sponsorships and concessions and men's BB should be a money maker for the department. This would take a huge load off of the football program and allow the school to go forward with some needed projects in football and other sports.

 

[tante]

Breaking even would be a great first step. If we can get to the point where men's BB is paying for itself and covering the deficit from women's BB the whole athletic program will be way ahead.

That said a consistent quality team in Boulder should bring in an average of over 8k per game. Add to that additional money gained from OOC road games as a more desirable opponent, some tourney money, and the associated increases in other related revenues such as sponsorships and concessions and men's BB should be a money maker for the department. This would take a huge load off of the football program and allow the school to go forward with some needed projects in football and other sports.

I thought that they always broke even, but WBB was at a large loss, so basketball as a whole showed a loss.

 

[Rraalph 3000]

Bohn made a comment earlier in the year that he expected to make at least a million bucks this year on basketball (assuming that includes the losses from the ladies) and that was prior to the NIT.

 

[absinthe]

I thought that they always broke even, but WBB was at a large loss, so basketball as a whole showed a loss.

the last set of school published numbers I saw had Men's basketball at a break even proposition and women's loosing more than 2,000,000. what I cant tell you is if this was for 2008-09 or 2009-10

 

[GoBuffs!!]

the last set of school published numbers I saw had Men's basketball at a break even proposition and women's loosing more than 2,000,000. what I cant tell you is if this was for 2008-09 or 2009-10

I think I saw that same figure, but it also had a portion of the Practice facility being budgeted in there.

I would be more intersted to see just the operating expenses, not capital improvements mixed in there. This is probably something you wont see, and in Boulder you will probably never see the athletic department say they are making money, no matter how well they do they will always play the card of we are in financial need.

 

[BlackNGold]

The major portion of money for basketball comes from the NCAA tournament. CU has gotten a decent payout because of the conference distribution. The Big 12 usually has 6 teams in to Tourney with a couple of them going far. The NCAA pays the distribution out for 5 years.

 

[BehindEnemyLines]

I'm sure they made unexpected revenue from the home NIT games. I'm not sure how much the AD stands to gain from the 1 or 2 games in MSG (and additional TV), but doesn't it off-set some considering the travel costs? just curious....

 

[tante]

The major portion of money for basketball comes from the NCAA tournament. CU has gotten a decent payout because of the conference distribution. The Big 12 usually has 6 teams in to Tourney with a couple of them going far. The NCAA pays the distribution out for 5 years.

I thought the NCAA payout was really weak? People were saying it was like 250k if you make it to the dance and goes up every round. any truth to that?

this is from wikipedia:

The Division I Men's Basketball tournament is the only NCAA championship tournament (officially, the BCS Football Championship is not an NCAA event) where the NCAA does not keep the profits. Instead, the money from the multi-billion-dollar television contract is divided among the Division I basketball playing schools and conferences as follows:

* 1/6 of the money goes directly to the schools based on how many sports they play (one "share" for each sport starting with 14, which is the minimum needed for Division I membership).
* 1/3 of the money goes directly to the schools based on how many scholarships they give out (one share for each of the first 50, two for each of the next 50, ten for each of the next 50, and 20 for each scholarship above 150).
* 1/2 of the money goes to the conferences based on how well they did in the six previous men's basketball tournaments (counting each year separately, one share for each team getting in, and one share for each win except in the Final Four and, prior to the 2008 tournament, the Play-in game). In 2007, based on the 2001 through 2006 tournaments, the Big East received over $14.85 million, while the eight conferences that did not win a first-round game in those six years received slightly more than $1 million each.

 

[Jens1893]

I thought the NCAA payout was really weak? People were saying it was like 250k if you make it to the dance and goes up every round. any truth to that?

That´s probably what the team *directly* gets for its participation. BlackNGold is probably talking about the conference pay out. Bit like the revenue sharing used for the BCS. CBS and Turner pay roughly ~$750m for the rights EACH year.

 

[BlackNGold]

The formula is very complex. A team earns a money unit for each game it plays in - so it you make it to the finals that is 5 money units. The payout is based on a 6 year rolling average. That money goes to the conferences. 126 money unit are awarded each year in past years (I think it goes up this year because of the extra teams) - last year the big East had accumulated 104 money units at $222,000 per unit - over $23 million dollars or $1.4 million per team. The money unit does not increase for each round. Conference distributions are up to each conference. The Big 12 got $17.1 million last year.

 

[Buffnik]

Here's the best report I could find. The big drawback is that it was compiled for the 2004-05 season:

CU Men's Basketball Revenue: $3,228,723
CU Men's Basketball Expenses: $2,465,779
CU Men's Basketball Profits: $762,944

Of our revenue, NCAA & Conference Distributions accounted for: $1,899,742. This is a number that will go up with a new Pac-12 media deal and also with CU getting into the postseason on a consistent basis.

After we deduct that out, we're looking at $1,328,981 in other revenue. The biggest chunk of that was Ticket Sales at $736,828. As comparisons in the same year, Washington pulled in $1,815,162 in Ticket Sales and the conference gold standard Arizona pulled in $4,443,542.

To run the analysis here: We seat a little over 11,000 fans. We'll get 9 conference home games a season and probably 16 total home dates (30 games, 18 conference, 3 neutral tourney, 9 OOC). If we could average 7,000 per game, that would be 112,000 fans. That's a slight bump from this season and very attainable. Even if we could get to an average of $15 per ticket (I paid $21 for my NIT seat), we'd be looking at $1,680,000. That's a significant bump. We could do much better. $20 per ticket average price with 8,000 in average attendance (16 home dates) would push our Ticket Sales to $2,560,000. $25 avg @ 9k avg = $3,600,000. It can get big in a hurry.

After deducting the ticket sales out, the other revenue was $592,153. The big items left are in 2 areas: Contributions (CU at $10,541 while Washington got $482,929 and Arizona got $4,408,920), and Advertisement & Sponsorship (CU at $114,803 while Washington got $130,655 and Arizona got $1,889,905).

For comparison as we go forward:
Total Washington Revenue / Expenses / Profit: $5,000,082 / $3,191,388 / $1,808,694
Total Arizona Revenue / Expenses / Profit: $16,974,938 / $4,475,394 / $12,499,544

Can we quickly get to the point where CU generates revenue in the $5 million range, or even $6MM or $7MM? Absolutely. In addition to the Ticket Sales revenue I mentioned, there is a new "Roundball Club" launching soon to specifically drive our lagging Contributions. Membership will be $2,500. This is an area where a major impact can be made. That number can also see a big bump if a donation is tied to at least our premium seats for season tickets.

Finally, Advertising and Sponsorship seemed to get better as the year progressed. Nike will pay more if we're winning. Beyond that, the Adolph Coors Foundation donated $5 million in 1990 and we named our arena in honor of the family. I don't know if that was permanent naming or if there's an opportunity to make an annual amount off naming rights. Regardless, we are seeing additional sponsorship from things like the ribbon boards that were added. We've got room for more signage in the corners and elsewhere. The more we pack the arena and the more we are on national tv, the more sponsors will pay. It could be $500k-$1MM a year from this.

Something that might surprise some people is that Concession, Programs & Parking isn't that big of a deal -- CU got $54,242 while Washington got $107,216 and Arizona got $319,314. The upside is only a couple grand. Nice, but not going to make a significant impact. Likewise for Individual School Media Rights where a strong local market helps, but the upside isn't all that impressive - CU at $210,905 while Washington got $510,440 and Arizona got $509,307. This could end up rolled into the new Pac-12 media deal anyway. These type of things add up, though. Hell, we don't even charge for parking. A strong program can pull in another $500k-$1.5k from all the "Other" stuff on the Revenue page.

When you consider that WBB and Volleyball programs are going to lose around $2.5-3MM combined (even Tennessee loses money on WBB @ -$1.7MM), it becomes a huge deal if MBB can pay for those and still deliver a profit for the Keg sports. It removes a ton of pressure from the AD and allows more of that football money to be reinvested.

http://www2.indystar.com/NCAA_financial_reports/revenue_stat/show?school_id=20

 

[BlackNGold]

That´s probably what the team *directly* gets for its participation. BlackNGold is probably talking about the conference pay out. Bit like the revenue sharing used for the BCS. CBS and Turner pay roughly ~$750m for the rights EACH year.

No, the money is not paid out to teams. The TV payout is 6.1 Billion over 11 years of which goes to the NCAA. The NCAA makes most of its income off the Tourney.

Link for this year

Just like this year BYU is not getting anything for their success - it goes to the MWC which BYU is leaving. CU will get no future benefit from KU's success this year.

 

[tante]

dammit our football contributions are weak too. 167k.

 

[tante]

here is a paper about it:

http://www.ncaa.org/wps/wcm/connect...ERES&CACHEID=46f776004e0d547d9ef9fe1ad6fc8b25

 

[BlackNGold]

The whole money unit thing is why the NCAA has to try to bracket so they will not teams from the same conference play each other early in the tournament. This year already the Big East has 18 money units with two teams left - so they will get at least 20 money units for this year...the rich get richer. The Big 12 has 8 money units with 1 team left which will end up being a down year for the Big 12. CU fans should cheer for Arizona since it helps future conference distributions.