SU Athletics Economic Q & A
3/2/2004 1:07:21 PM | Men's Basketball, Football
Read all the background related to the SU Athletics Budget. Click here
A major Division I-A athletics program at SU enhances the quality of life and experiences both at the University and in the community. It complements the academic endeavors of our student-athletes and serves as a unifying function and source of prestige for a diversified school and local community. With its tremendous visibility and influence in society, athletics provides opportunities to showcase the University and its many accomplishments, and brings to light the many people and assets that make Syracuse a special place to go to school, to work and to live.
By working together, the athletics program can be maintained as a viable part of the University and successfully compete at the highest levels. In turn, it can provide a valuable entertainment option for students, alumni, fans and supporters, as well as sustain a healthy revenue source for the many businesses in this community that benefit from the games that are played on the Hill.
The following is a question-and-answer session with Syracuse University Director of Athletics Jake Crouthamel on matters related to the economics of SU Athletics.
How big is the Athletics Department budget?
The annual budget is $22 million. Operating, equipment, travel, guarantees, insurance, medical, publications and facility maintenance comprise 40 percent. Salaries – including graduate assistants, interns and part-time personnel represent 31 percent. Scholarships—18 percent. Payments to the Dome are 11 percent.
How many programs are there and how many student-athletes participate?
There are 12 women’s teams and 9 men’s teams, involving more than 600 student-athletes. The NCAA requires a school to sponsor at least 14 total sports, including a minimum of six for men and eight for women. Scholarships are awarded as a grant-in-aid or based on equivalency. NCAA regulations place a limit on the amount of athletics scholarship aid that can be awarded on a sport-by-sport basis. An athletic grant-in-aid scholarship includes tuition, room, board and books. Slightly more than half of our student-athletes (52 percent) receive a grant-in-aid. In some sports, only a grant-in-aid scholarship may be awarded to student-athletes not to exceed a specific number. For example, the limit for football is 85, men’s basketball (13), women’s basketball (15). In other sports, the equivalency (total dollar amount) of a specific number of grant-in-aid scholarships may be awarded to any number of student-athletes. For example, men’s lacrosse can award up to 12.6 scholarships, women’s lacrosse (12), men’s soccer (9.9), women’s soccer (12). The total of all the financial aid SU awards is approximately $10.9 million, distributed among 314 student-athletes or 52 percent of all SU student-athletes.
Where does the revenue come from?
Primary sources, in order of impact, are: 1. Tickets (60 percent); 2. Conference revenue sharing, including television and BCS participation (nearly 20 percent); 3. Contributions—including preferred seating and boxes (nearly 20 percent).
How does the SU Athletics budget compare with other institutions in the BIG EAST or other Division I programs?
Among the BIG EAST I-A schools—considering the original membership of eight and including UConn—SU’s budget is probably number four or five out of nine, but you must consider that six of these schools are public institutions with tuition 50 percent or less than SU’s; thus, they have more funds available after covering the cost of scholarships to direct elsewhere. Nationally, SU is in the lower middle end of I-A after deducting scholarship costs. Again, since the vast majority of these schools are public, less revenue must be allocated for funding scholarships, with more dedicated to operation and salaries. SU’s scholarship costs are the second highest in the BIG EAST.
Intercollegiate athletics, especially at the Division I level, is seen as a big-money industry. How do you balance the escalating costs of administering a quality program with the sensitivity to increasing ticket prices and driving your prices “out of the market”?
We are competing for revenues with the entertainment business, and the cost of delivering our product as with any kind of entertainment, no matter what it is, escalates from year to year. One of the things we have had to face in the past 15 years is the amount of entertainment alternatives in the marketplace as well as the increased televising of college and professional sports. Fifteen years ago, the revenues the BIG EAST was generating from TV contracts tended to offset lost ticket sales resulting from a game being televised. This is no longer the case.
Clearly, the current trend, at least in college athletics, is to make the event a total entertainment experience. That is, you provide entertainment prior to the game and during the game so that the fun is not derived solely from the game. The Athletics Department began that exercise in football two years ago with the Family Fun Zone outside Gate B at the Dome. It was expanded, in concert with the Alumni Relations Office, to an alumni tent on the Quad. Currently, the opportunity to expand the Quad activity to include the Family Fun Zone is being explored. New video boards in the Dome and contests on the field are part of that as well. In basketball, enhancement of activities presented in the space at the east end of the Dome will continue.
SU ranks sixth of eight schools in BIG EAST football for the cost of season tickets and in the middle of the pack for individual game prices. In BIG EAST men’s basketball SU ranks 10th of 14 schools in price of season tickets, and individual game prices compare with football—middle of the pack. The Athletics Department believes it is being sensitive to the community, particularly when one considers the high scholarship costs of a private school. At the same time, we are all citizens of this community, and we understand and experience the economic circumstances of Central New York. It is understood that not everyone can afford to support the student-athletes as they compete in the Dome. Quite frankly, it’s a tough call when it comes time to prepare a projected budget for the next year and try to meet those expenses from the limited revenue sources, of which ticket sales represent more than 60 percent.
Why is it important to have strong crowds for games?
Two reasons. As I just mentioned, more than 60 percent of our revenue is from ticket sales. Other primary sources (i.e., contributions and conference) are fairly consistent—and flat. With the rising costs of operation, maintaining a strong ticket base is essential.
The second reason is support for the student-athletes and the home field advantage that is gained by an enthusiastic crowd in “The Loud House.” The noise and power of fans cheering, especially in a giant sound chamber like the Dome, has an energizing effect for a student-athlete and can be equally unnerving for an opponent. This atmosphere also makes a favorable impression on future student-athletes who are in attendance and to a television audience.
How popular are events like football and men’s basketball with SU students? How do you determine student ticket prices? At some institutions, the cost of season tickets is incorporated into the student fee. Why isn’t that done at SU?
Beginning with the 2002-03 academic year, at the request of the students, the Dome instituted a non-reserved, open seating season ticket plan. The first students in line when the gates open get the best seats in sections reserved solely for students. This has resulted in a tremendous surge in student interest and participation. In the first two years, student football season ticket sales increased by 31 percent. In basketball the increase has more than doubled. If you translate that interest across the entire student population at Syracuse University, including graduate and law students, that means 17 percent are football season ticket holders and 24 percent are basketball season ticket holders. If it is assumed that a high of 10 percent of those season ticket holders have season tickets for both sports, it means that well over one-third of all students participate in the athletics program on a season basis. And this does not account for students who buy tickets for individual games.
A student season ticket is different from a season ticket sold to the public in that students may not be on campus for all home games because of University holidays (e.g., Thanksgiving, Fall Break, Christmas, Spring Break). In addition, the quality of opponents that make up the student season ticket package is a factor. Until the 1999 football season, the highest-priced student season ticket was $80. That year, the students were on campus for all six home games, which included Michigan. This football season had seven home games, for all of which students were on campus, and the schedule included Notre Dame. The student season ticket price this year was the same as in 1999, even with the additional game. I would add that, with the exception of the 1999 and 2003 football seasons, student season ticket prices have averaged $43 during the last 19 years.
Basketball extends over two semesters, and any quirks in the major non-conference and BIG EAST schedules can have a profound effect on the games available to students. An example this year was Michigan State, which came to the Dome during the semester break, and UConn, which we’ll host over Spring Break. The Athletics Department has no control over these schedules, which are determined by TV and The BIG EAST Conference.
The average student basketball season ticket price is not easily calculated in a meaningful way for several reasons. The number of home games when school is in session varies from year to year, and that variation can be significant. And, of course, students are not charged for games during vacation periods. From the opening of the Dome in 1980 and for the following 11 years, there was a reserved seat season ticket made available to students. That changed in 1992 when two ticket options were offered, neither one for the full season. One option provided the opportunity to purchase a partial-season ticket for only the games considered to be most attractive (premium)—e.g., major intersectional and the best conference games. The second partial-season ticket was for only the games not in the premium category, at a rather significantly lower cost. Thus, a season ticket for a full schedule of games was not offered unless a student purchased both partial-season ticket packages. Beginning with the 1997-98 basketball season both a reserved seat and a general admission season ticket were offered. The reserved seat ticket was more expensive than the general admission ticket because it was a guaranteed seat in a better location.
The seven-year average price going back to the 1997-98 season, when we offered the option of a full-schedule, general admission season ticket, is $73. However, as previously noted the number of home games during which the students are on campus is a factor in pricing.
About 60 percent of all Division I schools have an athletic fee built into an activity fee that all students are required to pay. With the way things are going, that is going to increase. The University has avoided that practice, believing that students who are not interested in attending athletic events shouldn’t have to pay for them. I still believe that, despite the fact that it has now become necessary to do so.
Aside from being able to attend the games as fans, do you see other benefits of SU sports to students?
Many students acquire practical experience working with our programs. The Athletics Department supports a sizeable number of students as graduate assistants, interns, work-study assistants and paid tutors who in one fashion or another have day-to-day interaction with student-athletes and exposure to the inside operation of a Division I-A athletic enterprise, providing a training ground for students who wish to pursue a career in athletics administration. Intercollegiate athletics also contributes to the diversity we enjoy on campus, as 47 percent of our student-athletes are minorities compared to 24 percent of the campus population.
In addition, students at The Daily Orange, WAER, WJPZ, HillTV and from various Newhouse classes report regularly on SU athletic events, athletic issues and student-athletes. We offer a real-life laboratory opportunity for these students to hone their reporting skills. Countless sports journalism professionals across the country—Dick Stockton, Bob Costas, Mike Tirico, Sean McDonough to name a few—all cut their teeth sports wise by covering SU games. That kind of experience you can only get at an institution that has a top-notch athletic program and a top-notch communications program. Syracuse has both. And, academically, the opportunities for students are going to be further enriched with a new program in sports management.
Fans who come to the Dome park their cars, buy food and drinks, maybe pick up a T-shirt or cap at The Orange Shoppe or a stand. Does this money go to the Athletics Department? Also, there has been reference made before to the department paying rent to the Dome. Isn’t that an odd arrangement? 
The general overhead, fringe benefits and certain administrative costs of the University in the non-academic areas (auxiliaries) are funded from revenues generated by those departments. Examples include Parking Services, Housing, Food Services, SU Bookstore, Carrier Dome and Athletics. Each of these areas has a budgeted amount of revenue that is turned over to the University’s general budget each year to cover these administrative costs. Of the Dome's gross revenues, 90 percent of which are generated by the athletics enterprise, one-quarter goes toward general administrative services. Also, a financial assessment is required by the University from all the other auxiliaries that participate in a Dome event (e.g., novelty and food concessions, licensing, programs, parking). However, while the Dome shares in the revenue generated from these operations, the Athletics Department does not. Thus, when one considers all the revenue derived from an athletic event in the Dome, the Athletics Department shares only in the ticket revenue. The revenue generated from the auxiliaries is used by the individual auxiliary unit to cover its costs at the event and to meet their budgeted commitment to the University’s general administrative services costs.
While the Dome is a great facility, it is a very expensive one to maintain because of the air-suspended roof. There is never a down time in the Dome when every operating function can be turned off. Keeping the roof up is an expense during every second of every day. In addition, required routine maintenance costs range from $500,000 to $800,000 annually. These costs are underwritten from the Dome’s reserve account, which must be preserved in order to address annual maintenance and any catastrophic incident (e.g., a tear in the roof, a systems failure, etc.). If the Dome roof goes down and we have to cancel athletic events, we are in big trouble.
The costs of operating the Dome are augmented by activities other than SU Athletics. It hosts banquets, high school sporting events, commencement and post-season basketball. The Dome is particularly pleased with its relationship with Section III in being able to host field hockey, football and boys/girls soccer post-season tournaments, and with the State in hosting the high school football playoffs, the track championship and the field band championship. In addition, the staging of concerts has a very positive impact for the Dome and the community, but the Dome has not been successful in attracting big shows lately. In recent years, Dome concerts have been infrequent for a number of reasons, including the proliferation of amphitheaters and touring concert acts not scheduling summer stadium tours. The Dome used to schedule concerts for late spring or early fall around the summer tour activity. Availability is another issue, impacted by University scheduling constraints, including being limited to weekends, avoiding religious holidays, and athletics schedules. Other factors include the dwindling number of concert promoters, the cost of additional staging for a Dome show, high ticket prices, and a large facility in a small market.
At the Carrier Dome, some concession stands are staffed by community organizations during football and men’s basketball games. How did this relationship begin and who benefits from it? 
Since its earliest days, the Dome has utilized volunteer help from the community to operate the food concession stands. These volunteers contribute their time and effort on behalf of charitable and not-for-profit groups. In the 2002-03 sports season, more than $258,000 was paid by the University to these groups as a result of the service provided by their volunteers.
Speaking of community volunteers, I think it’s important to acknowledge that our student-athletes, themselves, are volunteering a significant amount of time and effort on behalf of the community. Since the inception of the Chancellor’s Awards for Public Service (CAPS) in 1997, our student-athletes have been acknowledged every year. With several activities still planned for the spring semester, 492 student-athletes have volunteered 1,366 hours in community service thus far in the 2003-04 academic year.
In addition, this fall the 22nd annual Dome Donation Day will occur at a football game, and it results in the Salvation Army receiving enough food to feed more than 10,000 people during the holiday season. Our teams have participated in Dollar Days at the Dome for the past six years, raising funds for the United Way. The Athletics Department, and men’s basketball coach Jim Boeheim in particular, has also been heavily involved with Coaches vs. Cancer, generating more revenue for the cause than any other Coaches vs. Cancer program.
There are signs around the Dome, ads in game programs, and radio and TV shows that Voice of the Orange Mark Johnson hosts—some local and others reaching across the state and extending into Pennsylvania, New Jersey and Vermont. What impact do these areas have on revenue?
In 1995, the Athletics Department created a marketing and promotion position for the purpose of generating new revenues from sponsorships. Until that time, there was limited signage in the Dome. Through a concentrated effort, the number of sponsorships significantly increased with added signage and promotions. Businesses looking to reach the demographics of the college athletic community find the Dome a natural fit because football, men’s basketball and lacrosse compete there. The uniqueness of hosting the two major Division I sports in the same building makes it easier to impact a larger audience. All this sponsorship revenue remains with the Carrier Dome.
This was a new revenue source, but in the marketing of the athletics program it became increasingly more confusing to potential sponsors about how the process worked and how to become a part of it. At the time, there were three separate and distinct entities in our market selling the same product—SU Athletics. WSYR was selling radio advertising for the game broadcasts. Drumlins was selling ads for the game programs. The Athletics Department and the Dome were selling sponsorships for the Dome. In 2000, it was decided to combine the three entities into a single enterprise that would provide a sole source representing all our multi-media rights in the community and have all three avenues accessed by dealing with one entity.
This new arrangement was outsourced; that is, an entity was hired that had expertise in delivering a full-service plan, including creating and maintaining a statewide radio network. The network has been expanded into bordering states and, with two 50,000-watt stations, games can even be picked up in the South and Midwest. Quite frankly, radio does not generate a whole lot of revenue, but getting SU’s name and program out to such a wide public is excellent promotion for the University and the community.
Daily SU radio shows have been added as well. “Orange Slices” is a potpourri of information about the athletics programs, and “Orange Pulse” is a one-hour feature show.
All of this effort has resulted in the broadest and most comprehensive coverage in the athletics program’s history. There are costs to this, but the benefits and exposure far outweigh them.
The Athletics Department does not share in any of the revenues generated from signage, sponsorships, radio/TV shows, game broadcasts on radio or program ads/sales. It all goes to support the operations of the Dome.
The presence of corporate sponsors at SU athletics events has increased during the past few years. How do you balance the value of the event with the value of corporate sponsorship?
The increasing costs of providing entertainment to the public have forced schools to look for new revenue sources other than tickets, conference revenue sharing and contributions. The demographic profile of college sports fans is very different from that of professional sports fans. The college sports market is attractive to many enterprises that appeal to the demographic population of college sports fans. Fortunately, college athletics has been able to tap into that sponsorship pool. Without it, the SU Athletics program would be in deeper trouble. Any new or enhanced revenue source helps us to minimize the increase of ticket prices.
SU Athletics has a contract with Nike. What is the nature of the contract, and what do you get out of it?
The formal relationship with Nike goes back to 1997. Basically, it identifies SU athletics as an exclusive user of Nike products in the sports of football, men’s and women’s basketball, and men’s lacrosse as well as our cheerleaders and dance team. For that exclusivity, most of the products used by these teams are provided free of charge. Nike has arrangements with only what it considers to be an elite group of schools around the country, and the key to any of their partnerships is based on the volume of retail sales that relationship generates. Thus, the relationship extends beyond the Athletics Department to the SU Bookstore, Carrier Dome novelty stands, and retail stores in the community, around the country and, indeed, around the world. Quite frankly, the relationship with Nike is a feather in our cap. Nike thinks enough of SU’s program to seek out a relationship, and their products are top quality.
What is the purpose of the Orange Pack Office?
The Orange Pack Office is a fundraising arm of the University’s Development Office, functioning strictly for the purpose of generating support of the intercollegiate athletics program through philanthropy. Nationally, this area has become the fastest-growing source of new revenues for athletics. Ticket prices can be raised only so much each year to address the increasing costs. Television revenues have become flat. The Orange Pack and similar organizations across the country are critical to supplementing annual operating budgets, creating endowments for the funding of scholarships and in the enhancement of facilities.
At Syracuse University, there are different ways—such as cash, securities, life insurance, bequests and charitable remainder trusts—in which financial support for athletics through the Orange Pack can be accomplished. All are tax deductible to the extent that the law allows. Contributions can be earmarked by sport. They can be made annually or funded as endowments. Our two greatest needs currently are to enrich our scholarship endowment through the Student-Athlete Fund and other similar sport-specific scholarship funds, and to enhance our facilities.
Annual contributions realized from Preferred Seating, suite licenses in the Carrier Dome, and contributions and income generated from endowment funds account for substantial support of our scholarship costs. For capital projects and the enhancement of Athletics Department facilities, naming donor gifts are relied on for the bulk of the funding.
Needless to say, the success of the Orange Pack Office’s efforts is critical to SU Athletics’ current and future financial well-being.
A couple of years ago, SU hosted the NCAA Men’s Basketball East Regional Championship in the Dome, and the Chamber of Commerce estimated the economic impact (hotels, restaurants, merchandise sales, sales tax) as $4.6 million poured into the community—from one event. You’ve been here for 25 years. Any guesses on the economic impact of SU sports over that time?
Based on the last time an economic study was done specifically for events held in the Dome, back in 1991-92, the projected accumulative impact on the community to date is well in excess of $150 million. Through the 2002-03 season, 21.6 million spectators attended events in the Dome, averaging 939,000 per year. During the past 23 years Dome events resulted in the payment of $18.3 million in state and city taxes, averaging $796,000 per year, which, accordingly, is taken right off the top of annual gross ticket revenue. I think this fact is overlooked by many of our fans who purchase tickets to our athletics events. During the last 10 years, maintenance in the Dome performed by local contractors averaged more than $800,000 a year. Not included in that figure is the economic impact of the University’s intercollegiate athletics program itself. Each year, visiting teams to Syracuse University account for some 3,600 hotel room nights along with meals, transportation, incidentals, etc. In addition, there is an impact on the visibility of SU and Syracuse, N.Y., brought about by television exposure. In early March, the college basketball world is enveloped in the excitement of the NCAA Tournament. Three times since 1997, Syracuse has become one of four centers of attention by hosting the men’s East Regional, and Syracuse will play host again in 2005.
There will soon be a new Chancellor at SU, new faces in the BIG EAST, and no more Miami. What are your thoughts on what the future holds for your athletic programs?
Twenty-six years ago, when I started at SU, the Athletics Department had very little to show for itself except for Jim Boeheim’s basketball program, the quality of which he has been amazingly successful in sustaining. But it was the only sport that was competitive. Other than the Manley Field House arena and Coyne Field, the Department’s facilities were non-existent or in deplorable condition, including Archbold Stadium. With the opening of the Carrier Dome in September 1980 and the increased attendance in both football and basketball that resulted, the Athletics Department was able to start building its program and facilities to the point where by the mid-1990s it was in pretty good shape, both programmatically and with facilities. Men’s lacrosse had been resurrected by Roy Simmons Jr. with new scholarship funding. Coach MacPherson and Coach Pasqualoni had resurrected the football program. Jim continued his success. Practice facilities were expanded, a new soccer stadium and outdoor track were constructed, new office space for the coaches was built, three new women’s teams were added, new space for student-athlete support services was created, and our weight room and training room were enlarged. This was all made possible by the support of SU’s athletics fans and contributors to the program.
The current arms race in intercollegiate athletics is really a facility race. First impressions of young prospective student-athletes visiting campus can make a difference in recruiting. Some public schools in our conference are taking advantage of special arrangements in using new football facilities that were built largely from state funds.
There is absolutely nothing wrong with our facilities from a functional standpoint, but some of them lack pizzazz when compared to the competition. The addition of three new women’s field team sports has added to our needs. I raise this issue because how we are able to respond to these needs will be critical in determining our future.
No one would argue that the new BIG EAST Conference of 16 teams beginning in Fall 2005 will be one of the very best basketball conferences—and perhaps the best—in the country. On the football side, the conference will represent a considerable geographic footprint with large population bases. I’m sure both of these factors will not be overlooked as plans are finalized for the future of the Bowl Championship Series (BCS) format. But regardless of the outcome, the teams in the “new” BIG EAST must perform just as was the case when Miami and Virginia Tech were in the conference. The Conference will have a new cast of players, and I’d like to think that their association with the BIG EAST will help them to elevate their programs over time. However, SU must do its part in this process.
And I am confident that our new chancellor and the trustees have a very good understanding of the value to Syracuse University and the community of having a representative and competitive intercollegiate athletics program at the Division I-A level.
