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cwiley
12-04-2011, 11:54 PM
How does Duke say 1st or 2nd in basketball revenue in the country? I would have thought that schools with much larger fanbases such as UK, UNC, or KU would generate a lot more revenue than a much smaller school with a small arena. Louisville just passed Duke for #1, but that is due to sale of luxury boxes in a 22,000 seat new arena. Can Iron Dukes support be that extensive (and that much more than, let's say, Rams Club support)? And nobody is getting luxury boxes in Cameron, eh?

I find this puzzling.

dcdevil2009
12-05-2011, 12:15 AM
TV deals and Nike money. I think we do better than most with our tv contracts because we generate a strong reaction. There might not be as many Duke fans as there are for other programs, but I think there are more people with an opinion about Duke basketball either love or hate than there are for teams like KU, UK, and UNC. People either love Duke or love to hate Duke, but both groups watch, so we are able to charge a premium for TV rights that the offsets the home ticket revenue and donations the other schools get.

Kimist
12-05-2011, 12:20 AM
Not knowing what statitistics you are citing, there may be an issue with the underlying definition of "revenue."

If you are talking about athletic/booster club support, then obviously the larger schools would have more due to sheer volume. (But rest assured, many of the top donors to the Iron Dukes must live pretty well also...)

My guess is the reported numbers have to do with broadcast/TV/gate revenues. Duke is a national team, and virtually all of its games are available on national viewing markets. Those pay big bucks. And then the farther a team advances in the NCAA helps a lot, even though there are rules for sharing such revenues within the conference.

loran16
12-05-2011, 12:43 AM
How does Duke say 1st or 2nd in basketball revenue in the country? I would have thought that schools with much larger fanbases such as UK, UNC, or KU would generate a lot more revenue than a much smaller school with a small arena. Louisville just passed Duke for #1, but that is due to sale of luxury boxes in a 22,000 seat new arena. Can Iron Dukes support be that extensive (and that much more than, let's say, Rams Club support)? And nobody is getting luxury boxes in Cameron, eh?

I find this puzzling.

Stop with the bolded part right there.....Duke has the largest fanbase in college bball in the country (UNC is typically found to be #2). Most of our fans aren't Alums or even people from North Carolina, like say UK fans, but Duke's national appeal wins out.

We're similar to Notre Dame in this respect in football (which is thought by one estimate to have the 3rd largest fanbase behind OSU/Michigan despite a much smaller alum base). Just because some schools seem to have as intense or a greater number of intense fans doesn't mean they have a larger fanbase.

They call Duke the Yankees of college bball. I hate the analogy because Duke can't buy the best players - but in one respect its' true: Duke is the #1 most liked team in college basketball and the #1 most hated.

Greg_Newton
12-05-2011, 01:00 AM
TV deals and Nike money. I think we do better than most with our tv contracts because we generate a strong reaction. There might not be as many Duke fans as there are for other programs, but I think there are more people with an opinion about Duke basketball either love or hate than there are for teams like KU, UK, and UNC. People either love Duke or love to hate Duke, but both groups watch, so we are able to charge a premium for TV rights that the offsets the home ticket revenue and donations the other schools get.

Yeah, TV broadcast revenues would seem to be the obvious source, but I do kind of wonder how much they make off of Iron Duke donations (or whether they get to count any of them for basketball revenue). The annual amount you have to give just to get the ball slowly rolling towards the eventual right to buy season tickets is relatively staggering...

throatybeard
12-05-2011, 01:11 AM
I'm not exactly sure, but I think the tiny arena helps rather than hurts. Here's why.

Duke may have a national fanbase, at least to some extent. I don't think the support for the team is that extensive in Fort Collins or Vicksburg. But as folks have pointed out, the national interest, positive or negative, creates additional buzz and numbers on the tube. The drawback of a national fan following, of course, is that a lot of people cannot feasibly make 17 home games in Durham. Two in NY/NJ or one in DC or Chicago, sure. But not 17 home games. And hell, my wife and I are both teachers. Even if it were possible for us to both be gainfully employed in Durham, which isn't realistic, even given our present rather privileged circumstances compared to most Americans who are stuggling, even then, season tickets for Duke MBB would be somewhere between 95th and 110th on my priorities in life, partly because of cost. Even if we lived in Durham. It's not that many people who can afford the donation and the face, for a pair, which gets you to somewhere around $10K/year. And that's if you don't want to go to the ACCT.

So Duke creates a low supply upstairs by having (keeping) a small arena. It's only six thousand and some seats upstairs. Not more than seven. So what this means is you can really shake down the people of means, to whom it means a lot to be at the foul line instead of in the corner. So the philanthropic and inordinately large season donations (I guess those are the same) come from people who can really afford it, and you don't need THAT many of them.

Wake Forest has a similarly lifeless arena to the Dean Dome, but smaller. About 14.5K I think. The school is smaller than Duke, the fanbase national but maybe a tad more regional than Duke. Even when the team is good, they completely fill it when Duke and UNC come to town and scarcely otherwise. It has no charm, dipwads dancing around in tie-dye t-shirts, Zombie Nation, and no artificial paucity of seats.

We have dipwads jumping around in blue shirts, but charm, no tie-dye, no Zombie Nation, and most crucially, a paucity of seats. This leads me to my second point. The paucity of seats works well even when there's not a truly onerous demand-driving deficit.

Anyone with Cameron experience knows you can get you a facey outside for many games. I've been to plenty of games where the butts-in-seats percentage upstairs is maybe 75% or 80%, and the Ugrads don't fill their sections, so the GradProf students bleed into it after tipoff, and the corners are empty. (Though those upstairs seats are already paid for in the Stadium-level calculus). If you can't get a face-value ticket for Colorado State, your communication skills are suspect. You won't be able to do that at the Carolina game even if you're The Most Interesting Man in the World. But about half our games, you can get in for WAY less than "face plus a prorated amount of what the season ticket holder paid in their donation." Maybe not much more than face.

Now, why is that. It's because there's a huge value on having your own seats, any time you want to go. Dude upstairs wants to hold his good seat for the ACC games even if he has to be at his daughter's tap recital during the Presbyterian game.

Here's an analogy about me and my wife and our low-rollerism at the SLSO.

All of our tickets are the cheap-cheap tickets in the first three rows. These are under $20 each because you're so close that you can't see the whole stage. Our best tickets in three series, we're pretty much duct taped to David Robertson's butt. I can make eyes at the hotties in the First Violin section, but the acoustics are less than optimal and I can't see the timpanist during Mahler 3. Well, I know what a dude playing a French Horn or an Oboe looks like. So swinging from Robertson's magnificent glutes is good enough for me.

But even within that cheap section, I'm extraordinarily sensitive to the seating differences within the section. I buy three series (18 concerts) even though we are only able to make it to about ten-twelve concerts given work, stress, babysitter availability. So in my low-roller universe, I pay about $600-$700 annually to get seats that I'll only use about $400-worth of. But, if I buy 18 concerts instead of 12, I get my seats in the center aisle instead of off on the right behind the double basses. If I buy 12, and there are 12 concerts I really want, I have to trade lesser concerts for better ones and I get worse seats once I trade in. So my "wasted" two or three hundred bucks for the concerts I don't make it to when my wife comes home burned out as hell from Hixson Middle School--that "wasted" money pays to get us into the center where we can see the soloist when there is one. We had a concert where Karita Mattila was singing about how she was the universal feminine...

...never mind. You get my point. Center aisle, great. Right aisle, sucky. More season tickets bought, more I get in the center where I want to be. So I'm willing to "throw away" a coupla three hundred bucks a year to make sure than when I can make it, I'm in the better seats in my cheap section.

Now imagine you're the sort of Duke alum who stayed in the area, so you can make it to a lot of games but maybe not all, and you're, I don't know, a lawyer or businessman who pulls five or six large a year. Now take my situation with the symphony and multiply it. Your average well-off "stadium-level" ticket holder is shelling out between ten and twenty grand for two or three seats in the corner, when you consider the donation and the face together. The marginal difference to get to the foul line or certainly halfcourt is going to be a lot for the people who have the means. Some dude who makes three-quarter Mil--why isn't he going to pay $50K or $100K for being near half-court instead of up in the northeast corner? And he's going to have priority for ACCT and NCAAT. We've been know to excel in the NCAAT from time to time. And you just don't need that many of those guys to make more from a home game than Duke would if, say, we rented out the GSO coliseum at $30/seat.

I suspect that if we had a Wake Forest-sized arena, we might actually make a bit less on ticket receipts. Plus you also have Mike Krzyzewski, who is a master sweet-talker, fundraiser, international Polish man of mystery, and he can extract some philanthropic endowed scholarships. These factors work in concert, but with a small school with a medium-sized, dispersed alumni base, I bet the small arena works to our advantage. Not even considering all run we get for the "Wrigley of college basketball."

It's business. You get the peeps who can pay to pay more.

cwiley
12-05-2011, 01:17 AM
Here's a source: http://www.bizjournals.com/louisville/news/2011/11/17/louisville-tops-duke-in-basketball.html

I live in Louisville, so Louisville's bump has received a lot of ink here:

Below are the revenue amounts for each basketball program in the Top 20.
Louisville, $40.9 million
Duke, $28.9 million
Arizona, $21.2 million
North Carolina, $19.7 million
Syracuse, $19 million
Kentucky, $18.6 million
Indiana, $17.8 million
Ohio State, $17 million
Michigan State, $16.5 million
Texas, $16.4 million

As for fanbase size, Duke does have a lot of fans across the country. But Louisville, for instance, does not. I usually associate high revenue programs with large numbers of fans in a relatively limited geographic area, like, for intance, every other school on this top 10 list.

throatybeard
12-05-2011, 01:21 AM
Here's a source: http://www.bizjournals.com/louisville/news/2011/11/17/louisville-tops-duke-in-basketball.html

I live in Louisville, so Louisville's bump has received a lot of ink here:

Below are the revenue amounts for each basketball program in the Top 20.
Louisville, $40.9 million
Duke, $28.9 million
Arizona, $21.2 million
North Carolina, $19.7 million
Syracuse, $19 million
Kentucky, $18.6 million
Indiana, $17.8 million
Ohio State, $17 million
Michigan State, $16.5 million
Texas, $16.4 million

As for fanbase size, Duke does have a lot of fans across the country. But Louisville, for instance, does not. I usually associate high revenue programs with large numbers of fans in a relatively limited geographic area, like, for intance, every other school on this top 10 list.

I'm more interested in what the profit numbers are than the raw revenue numbers.

dcdevil2009
12-05-2011, 01:27 AM
Not knowing what statitistics you are citing, there may be an issue with the underlying definition of "revenue."

If you are talking about athletic/booster club support, then obviously the larger schools would have more due to sheer volume. (But rest assured, many of the top donors to the Iron Dukes must live pretty well also...)

My guess is the reported numbers have to do with broadcast/TV/gate revenues. Duke is a national team, and virtually all of its games are available on national viewing markets. Those pay big bucks. And then the farther a team advances in the NCAA helps a lot, even though there are rules for sharing such revenues within the conference.


From a 2009 Forbes article (http://www.forbes.com/2009/03/16/most-valuable-college-basketball-teams-business-sports-final-four.html) about basketball revenue,
"Captured among revenues are ticket and concession sales, basketball broadcasting and sponsorship agreements, scheduling guarantees and money generated from hosting pre-season tournaments. Also included are donations that are required by some athletic departments in order to purchase season tickets. These "gifts" are significant--in some cases they add up to more than $7 million a year--and are often hidden within departmental accounting."


TV Money

Sorry, I don't have the statistics handy to show that Duke's TV rights are worth more than any of the other programs, but assuming Duke and any other school generate the same TV revenue on a per game per network (a game on ABC/CBS/NBC generates more revenue than a game on ESPN, which is more than ESPN 2, which is more than ESPN 3, etc. Duke has more games at or above each revenue tier than any other big name program. I could go through and total Arizona, UNC, and the others on the list, but it's late and I'm lazy. However, all but three of Duke's games that are nationally televised (UNCG on RSN and NC State and VT on the ACC network). The reason I'm saying that Duke gets more nationally televised games is because more people care about Duke basketball than any other team, which is not the same as saying Duke has more fans. You hear that Duke basketball is a lot like the Yankees, but I think last year's Miami Heat are a better comparison. The Heat were one of the most popular teams, along with the Lakers, Knicks, Bulls, and Celtics, but they also attracted casual fans who were attracted to the best teams and/or liked to root against Miami. Like the Heat, Duke has been very talented and very polarizing, so they have more people who want to see their games.

Sponsorships

As Loran said, Duke has one of the largest, if not the largest fan base in the nation. Again, I don't have the numbers for specific revenue streams, but assuming sponsorship dollars are tied to the size of the fan base, you would expect that the programs that have the most fans also generate the most sponsorship revenue. However, I'd be surprised if Duke generated significantly more than any of the other top programs. Instead, and without having the statistics, I'd guess that a list of the programs which generate the most sponsorship revenue are concentrated at different levels, with teams with national fan bases like Duke, UNC, Kentucky, Kansas, and UCLA are at the top, followed by traditionally good, but more regional teams like Michigan, UConn, and Oklahoma generating a lot less, but still significantly more than local teams like NC State, Oklahoma State, and Pittsburgh.

hurleyfor3
12-05-2011, 08:27 AM
This has been discussed before, but there's a fair amount of discretion regarding what a school counts as "basketball revenue". At most schools with sizeable football programs, people donate for football and essentially receive basketball tickets for free (no worse than face for VERY good seats). This happens at places like Alabama and Michigan, but also to an extent at large schools with good basketball programs such as Ucla and Stanford.

toooskies
12-05-2011, 12:55 PM
The schools themselves have a lot of wiggle room to "cook the books". Duke, for instance, can claim that a ton of generic "Duke" merchandise is sold because of the basketball team, whereas a state school might simply throw in their generic shirts as non-athletic revenue (or football revenue).

dcdevil2009
12-05-2011, 02:31 PM
The schools themselves have a lot of wiggle room to "cook the books". Duke, for instance, can claim that a ton of generic "Duke" merchandise is sold because of the basketball team, whereas a state school might simply throw in their generic shirts as non-athletic revenue (or football revenue).

But do they really have incentive to "cook the books" to overstate revenue? Athletic departments aren't public companies, so they don't need to overstate or artificially inflate revenues to look attractive to investors. Instead, I'd think they would try to understate revenues, at least to the extent that they can legally drive down taxable income or shift the revenue to places where it would get more favorable tax treatment. If it's all tax free, then it's a moot point, but I'd still be surprised if the schools are consciously trying to overstate athletic department revenues just to have bragging rights for the "most valuable program" title. Although having said, I could see programs like Texas and Ohio State who have $100 MM per year athletic budgets overstating revenues and expenses so that they look larger, while not affecting their overall profits or losses.

...

As a side note. I found this (http://www.sportsbusinessdaily.com/Journal/Issues/2011/08/22/In-Depth/Budgets.aspx) Michael Smith article from the Sports Business Journal about university athletic budgets and was amazed at how much some schools are spending per year. He only had data for state schools, but has every public school ieach of the six BCS conferences. It was interesting that Oregon and Indiana (and presumably the other schools), which have a lot of out-of-state athletes differentiate between the cost of a scholarship for an out-of-state and an in-state athlete. I'm surprised that waiving the out-of-state tuition is considered an expense when it doesn't actually cost a school more to educate an out-of-state student than it would cost to educate an in-state student (and an out-of-state athlete isn't taking the place of an out-of-state non-athlete). It makes me think that athletic departments are overstating expenses beyond their actual costs.

mkirsh
12-05-2011, 02:36 PM
TV Money

Sorry, I don't have the statistics handy to show that Duke's TV rights are worth more than any of the other programs, but assuming Duke and any other school generate the same TV revenue on a per game per network (a game on ABC/CBS/NBC generates more revenue than a game on ESPN, which is more than ESPN 2, which is more than ESPN 3, etc. Duke has more games at or above each revenue tier than any other big name program. I could go through and total Arizona, UNC, and the others on the list, but it's late and I'm lazy. However, all but three of Duke's games that are nationally televised (UNCG on RSN and NC State and VT on the ACC network). The reason I'm saying that Duke gets more nationally televised games is because more people care about Duke basketball than any other team, which is not the same as saying Duke has more fans. You hear that Duke basketball is a lot like the Yankees, but I think last year's Miami Heat are a better comparison. The Heat were one of the most popular teams, along with the Lakers, Knicks, Bulls, and Celtics, but they also attracted casual fans who were attracted to the best teams and/or liked to root against Miami. Like the Heat, Duke has been very talented and very polarizing, so they have more people who want to see their games.



Potentially a stupid question, but does each school negotiate its own TV deals? I thought the ACC had the contract with ESPN and Raycom and divided the revenue evenly, so the fact that Duke gets more ESPN games than say BC does not generate more revenue for Duke. Maybe the out of conference games are negotiated, but I have a hard time imagining every AD across the country negotiating numerous TV deals, so would imagine the only way Duke grosses more would be donations and maybe the gates for the MSG games we do 1-2x per year. Could definitely be wrong here though.

jjasper0729
12-05-2011, 02:53 PM
As a side note. I found this (http://www.sportsbusinessdaily.com/Journal/Issues/2011/08/22/In-Depth/Budgets.aspx) Michael Smith article from the Sports Business Journal about university athletic budgets and was amazed at how much some schools are spending per year. He only had data for state schools, but has every public school ieach of the six BCS conferences. It was interesting that Oregon and Indiana (and presumably the other schools), which have a lot of out-of-state athletes differentiate between the cost of a scholarship for an out-of-state and an in-state athlete. I'm surprised that waiving the out-of-state tuition is considered an expense when it doesn't actually cost a school more to educate an out-of-state student than it would cost to educate an in-state student (and an out-of-state athlete isn't taking the place of an out-of-state non-athlete). It makes me think that athletic departments are overstating expenses beyond their actual costs.

AS far as the in-state/out-of-state discrepincies, I would say that it doesn't cost the SCHOOL more to educate a student, but the state taxpayers end up picking up the tab as part of the subsidies. There's a lot of angst regarding the NC budget in the recent past about UNC-CH having out of state players get in state tuition rates (it's at least 3 times difference) for scholarships (which, of course means a dollar from the Ram's club goes farther with the scholarships). I can't recall if NCSU does this as well.

Therefore, SOMEONE has to pay for that difference. Presumably, the in-state students should have a better chance of going to their home state schools (NC has the 16/17 campus system to pick from) but I digress from the political theatre.

dcdevil2009
12-05-2011, 03:15 PM
AS far as the in-state/out-of-state discrepincies, I would say that it doesn't cost the SCHOOL more to educate a student, but the state taxpayers end up picking up the tab as part of the subsidies. There's a lot of angst regarding the NC budget in the recent past about UNC-CH having out of state players get in state tuition rates (it's at least 3 times difference) for scholarships (which, of course means a dollar from the Ram's club goes farther with the scholarships). I can't recall if NCSU does this as well.

Therefore, SOMEONE has to pay for that difference. Presumably, the in-state students should have a better chance of going to their home state schools (NC has the 16/17 campus system to pick from) but I digress from the political theatre.

I'd say that the cost to the university of educating one additional student is negligible. For example, if UNC has 6,500 students in its undergraduate class, it wouldn't cost them any more in the expenses that tuition covers for the 6,501st student. There would of course still be room and board, and other cost-of-attendance expenses for that student, but those would be the same regardless of whether he was in state or out of state. I think the issue is whether an out-of-state scholarship athlete is in addition to an in state non-athelete or in place of him or her. If it's in addition to, then there's no real cost to be subsidized, but if it's in place of, then I can see why taxpayers would want the Rams club to pay the difference, although I still think the out-of-state tuition rate overstates the expense regardless of who bears the cost.

I wonder what happens for sports that offer split scholarships, but have both in and out of state athletes.

cwiley
12-05-2011, 03:46 PM
I'm still having trouble making sense of this. If you compare Duke to UNC. Television revenue should be about equal, since the ESPN/Fox/whatever ACC contract should be the same. Each has a few high profile games a year on different networks--my guess is that the money would be comparable. They have the potential for much higher revenue from non-students at games, but I don't know what the actual revenue is between the two schools. Duke has fans across the country, but so does UNC.

How in the heck could Duke's basketball revenue be 50% higher than UNC's?

If the issue was profit, then that could make sense to me, but total revenue?

sagegrouse
12-05-2011, 03:47 PM
I'd say that the cost to the university of educating one additional student is negligible. For example, if UNC has 6,500 students in its undergraduate class, it wouldn't cost them any more in the expenses that tuition covers for the 6,501st student. There would of course still be room and board, and other cost-of-attendance expenses for that student, but those would be the same regardless of whether he was in state or out of state. I think the issue is whether an out-of-state scholarship athlete is in addition to an in state non-athelete or in place of him or her. If it's in addition to, then there's no real cost to be subsidized, but if it's in place of, then I can see why taxpayers would want the Rams club to pay the difference, although I still think the out-of-state tuition rate overstates the expense regardless of who bears the cost.

I wonder what happens for sports that offer split scholarships, but have both in and out of state athletes.

Be careful with the argument that "the cost of educating one additional student is negligible." What about 1,000? What about all 300 or so on athletic scholarship? Especially when the university opens up entire academic departments to serve the athletes. (Do you think there would be phys ed majors at Wake without athletics or recreation majors at UNC?)

I believe that many schools get to have athletes counted as in-state students. This may even be at the initiative of the state legislatures.

sagegrouse
'Rice University in its SWC heyday used to offer a major in Commerce that was limited only to athletes, although other students could take the course. Don't see it now, but I found "Kinesiology" and "Managerial Studies," which looked suspicious'

hurleyfor3
12-05-2011, 03:54 PM
Be careful with the argument that "the cost of educating one additional student is negligible." What about 1,000? What about all 300 or so on athletic scholarship? Especially when the university opens up entire academic departments to serve the athletes. (Do you think there would be phys ed majors at Wake without athletics or recreation majors at UNC?)

I can conceive of a school's resources becoming strained with as few as 15 or 20 additional students, when it comes to dorm or parking space, or when most of those marginal (clever word choice there) students are studying similar things.

dcdevil2009
12-05-2011, 04:15 PM
Be careful with the argument that "the cost of educating one additional student is negligible." What about 1,000? What about all 300 or so on athletic scholarship? Especially when the university opens up entire academic departments to serve the athletes. (Do you think there would be phys ed majors at Wake without athletics or recreation majors at UNC?)

You're right, saying the cost of educating one additional student is negligible doesn't tell the whole story. In most cases, the cost of educating one additional student is negligible, but in some cases, it's incredibly high, kind of like seats on an airplane. In a 200 seat plane, it costs a negligible amount to the airline for seats 1-200, but for the 201st passenger, they need another plane. Just like at a certain point, a university will have to add another faculty member or build more classrooms. I'm not using the negligible cost argument to say that universities can or should hand out infinite scholarships without financial consequences, just that counting the full cost out of state tuition as an expense overstates how much it actually costs the university or the state's taxpayers, even if the athlete doesn't take a seat away from a non-athlete.