Analysis of U of L Football Revenues

[the artist FKA zipp]

I want to thank one of my buds from the premium side, @CARDOMYTE, for motivating me on this particular thread. Those guys are the best, and I encourage anyone who is not a premium member to consider joining for the very modest cost.

U of L's annual financial reports do not contain the breakdown on football revenues included in the following discussion. These numbers are only found in the monthly reports that the ULAA prepares internally. The reasons I have these numbers for most of the last decade is that lately I have asked for them, and previously, I had some on file from the annual budgets. A few data points are missing or omitted, but they don't subtract from the conclusions that result.

There's also a couple revenue terms I need to describe... "Conference" is currently the combined revenue streams of ACC Media and ACC Revenue Distribution. Of course, before the ACC, it was whatever revenue came from the Big East or AAC in similar categories. There's also a grouping I call "Game Day Revenues" (GDR). That's the sum of Ticket Sales, Suite Rentals, Loge Seats, Parking, and Concessions from the revenue statements, if they show up explicitly.

And 2021 was the year affected by Covid.

Here's the breakdown in football revenue for the years in which I have data on file. Revenues since 2015 in this series were significantly increased by the ACC revenue streams. I will have the 2022 data point in a few weeks when the 2022 distribution from the ACC is reported in the June 30 monthly report. U of L is expecting the conference revenue to be about $26-1/2 million and the total revenue for 2022 to end up around $48 million.

Note that all of these years are FISCAL years. For example, the 2020 football season (Covid) was played in FY2021.

There was one extra home game (7) in 2022 than we normally have on the schedule. Also, U of L received almost $5 million for the Chick-fil-A game with Ole Miss. GDR was obviously much less in 2021 when only around ten thousand fans could attend each home game.

There are factors affecting football revenues that some argue are outside of U of L's control. A big positive one is the conference revenue which now represents two-thirds of overall revenue. Besides fielding a competitive football team to play other ACC teams, U of L is not directly making that number happen. We're just a huge beneficiary. Other explanations I hear are declining attendance nationally, U of L scandals and mismanagement, etc. IMO some of those may have substance, but most do not.

I'm focusing now on the blue segments in the above bar chart. Visually the trend in GDRs is flat to rolling over. And to analyze that trend, I folded in home game attendance for the years shown. Ex-Covid, total attendance ranged from 277 thousand in 2018 to 350 thousand in 2013. Without checking, I'm confident there was one more or less home game than the normal complement of six games that in part explains those extremes.

I divided GDR for the season by total attendance to get a GDR per fan. This is how much revenue on game day that U of L is able to extract from the average fan in the stadium. For the upcoming season, I'm using the same average attendance we had this past season (43,966) for seven games and ratio-ing the total down for one less game. The bars are the actual numbers, and the line above them is the inflation adjusted number in 2023 dollars. I applied a guesstimate of 5% inflation for 2023.

The Covid year was and should have been the highest. That was the most lucrative 20-25% of the fanbase in attendance. For example, I recall there was no attendance restriction in the suites. And there were few individual game tickets sold which is where the discounting and promotions occur.

Again, you can see the trend overall... Actual GDR per fan was up 44% from 2012 to 2018 and has declined 15% since. Of course, a good part of that 44% increase was inflation. If you adjust for that, the increase was 33% from 2012 to 2018. However, the 2023 budget is for game day revenues to be down 32% from 2018. adjusting for inflation, and on a per fan basis.

Expressing game day revenue per fan gets past the macro issue of declining attendance. Staging football games is central to U of L football operations as far as revenue is concerned. And U of L is getting far less money from its core operations than it did five years ago. The only question now is why. And my hunch is that football has taken a major hit in the more lucrative part of its fanbase. They can get ten thousand of those people in the stadium as evidenced by Covid, but perhaps not many more than that...

 

[beantowncard]

By “most lucrative” I assume you mean highest priced seats, correct? Is this because we have limited premium seating or because we have limited premium fans? What effect does ticket price increases have (you seem to have included general inflation but not specific inflation)? Does GDR include concessions, parking, merchandise (I assume yes but I don’t know)? Finally, you show projected data for 2023 in the total revenue graph but not 2022. Why?

 

[the artist FKA zipp]

By “most lucrative” I assume you mean highest priced seats, correct? Is this because we have limited premium seating or because we have limited premium fans? What effect does ticket price increases have (you seem to have included general inflation but not specific inflation)? Does GDR include concessions, parking, merchandise (I assume yes but I don’t know)? Finally, you show projected data for 2023 in the total revenue graph but not 2022. Why?

Yeah, most lucrative is my shorthand for the fans paying the most money. Covid concentrated those folks in the stadium. U of L really couldn't cater to Joe Six-Pack that year.

A lot of people think we have overbuilt our premium seating at the stadium, suites and loge seats. I probably agree in the context of our current administration. These people won't be maximizing premium revenue anytime soon. But to address your 2nd question and except for Covid, I don't think the issue is capacity for that segment of our fanbase.

There's no readily available data for inflation in U of L ticket prices that I'm aware of. My effort to adjust for inflation is to analyze cash flows over a long time frame like a decade. In economics parlance, the resulting numbers are "real" increases or decreases since inflation at a macro level is removed.

For the subcategories, there's no itemization under football for merchandise. The five that I show under GDR are the only ones identified by U of L.

If I understand your last question, the 2022 data point is missing on the total revenues (first) graph because most of the conference distributions come in the current month. The brown bar would be very small which would misrepresent the trend, at least visually. However, I mention above where U of L has those distributions budgeted, and they're in line with the trend shown. I'll update this graph in a few weeks when the 2022 data point can be calculated.

Good questions...

 

[beantowncard]

Ticket price inflation (as a ticket holder you would know) would seem to me to have a direct impact on sales, given a relatively constant demand. That’s basic economics. I think there was a price increase in there someplace but I don’t remember specifically.
I also would disagree with the proposition that there was one “COVID year”, but in fact both 2020 and 2021 were impacted.
The data are interesting. Two other interesting stats would be revenue per win, and revenue per wins on home schedule (opponents wins). This would correct for team performance and quality of schedule.

 

[the artist FKA zipp]

U of L has consistently raised tickets prices for decades. That happened during the period leading up to 2018 in the above charts. If it's managed properly, ticket price inflation on its own should not result in lower overall revenue or revenue on a per capita basis.

Inflation adjustments as I'm making reflect an aggregate for revenues and expenses generally. Without that adjustment, you can get an "inflated" picture of how much money we're bringing in or how much expenses have increased.

Your point on possible spillover effects from Covid should affect total revenues, not necessarily per person. In fact, the 2021 data point indicates that effect could be higher revenue, not lower. I haven't heard a theory why people showing up for games post Covid would be spending less money doing so...

 

[Smithereen]

"A lot of people think we have overbuilt our premium seating at the stadium, suites and loge seats. I probably agree in the context of our current administration."

Wow, amazingly the previous administration are responsible for overbuilding the premium seating. But that wouldn't support the narrative....

 

[the artist FKA zipp]

"A lot of people think we have overbuilt our premium seating at the stadium, suites and loge seats. I probably agree in the context of our current administration."

Wow, amazingly the previous administration are responsible for overbuilding the premium seating. But that wouldn't support the narrative....

Not sure you understand the comment...

There's zero proof the stadium was overbuilt in any respect for former management. And their oversight was the plan when it was built.

There's plenty of evidence that the current regime can't utilize it. Five years of that evidence (see either chart.) In fact, his first year in the job, Tyra was already downsizing it.

"That's six thousand seats up there, not ten..."

 

[beantowncard]

Not sure you understand the comment...

There's zero proof the stadium was overbuilt in any respect for former management. And their oversight was the plan when it was built.

There's plenty of evidence that the current regime can't utilize it. Five years of that evidence (see either chart.) In fact, his first year in the job, Tyra was already downsizing it.

"That's six thousand seats up there, not ten..."

I think the burden of proof lies with those who would claim that the stadium would have been the right size if only Jurich, et al were still in charge. The proposition is not provable- there is no basis to assert that attendance drops reflect people upset with who the AD is. There is, however, support based on pre-expansion attendance, season ticket waiting lists, and single game ticket price points online that the expansion was probably too aggressive.

 

[the artist FKA zipp]

I think the burden of proof lies with those who would claim that the stadium would have been the right size if only Jurich, et al were still in charge. The proposition is not provable- there is no basis to assert that attendance drops reflect people upset with who the AD is. There is, however, support based on pre-expansion attendance, season ticket waiting lists, and single game ticket price points online that the expansion was probably too aggressive.

I'll accept decades of experience--including multiple new facilities and expansions--as proof of what we USED TO BE capable of. No question now, those days are gone...

 

[beantowncard]

I'll accept decades of experience--including multiple new facilities and expansions--as proof of what we USED TO BE capable of. No question now, those days are gone...

Of course we were capable of building and expanding Cardinal Stadium. ITS BUILT. The question is, was it over built. The answer seems to be yes.

 

[Rollem Cards]

I was ridiculed for saying we didn’t “need” expansion when we did it.

I said we needed “need”. We should have made UofL FB a “hard get”. Make going to FB games a milestone.

Instead, we expanded, can’t fill it, and devalued our season tickets to the point we can’t break even if we can’t go to a game(s).

Did it help us get in the ACC? 🤷🏻

Has it helped get recruits? Oh, wait. I forgot. The fancy helmets have gotten us all the recruits. 🤣 Lot cheaper than expansion.

I do know that expansion has done zero for my ticket value.

 

[the artist FKA zipp]

Of course we were capable of building and expanding Cardinal Stadium. ITS BUILT. The question is, was it over built. The answer seems to be yes.

That's not true. What we have proven beyond anyone's speculation is that the prior regime overbuilt it for the new regime to manage (at least so far).

And it's logical to assume that the old regime plan wasn't for that to be a concern...

 

[beantowncard]

That's not true. What we have proven beyond anyone's speculation is that the prior regime overbuilt it for the new regime to manage (at least so far).

And it's logical to assume that the old regime plan wasn't for that to be a concern...

You’re the data guy. So what data would lead you to believe UofL could fill a 60,000 seat stadium on any consistent basis? I alluded to some metrics above- How long was the waiting list for season tickets? Were secondary market prices for single game tickets going up? Were we consistently selling out and filling the stadium at 42k? What measures of demand drove that decision? If the old “management” made the expansion decision without numbers to back it up, then it was an ego-driven decision, and likely a poor one. The new “management” can’t be blamed for that.

 

[HiStepper]

You’re the data guy. So what data would lead you to believe UofL could fill a 60,000 seat stadium on any consistent basis? I alluded to some metrics above- How long was the waiting list for season tickets? Were secondary market prices for single game tickets going up? Were we consistently selling out and filling the stadium at 42k? What measures of demand drove that decision? If the old “management” made the expansion decision without numbers to back it up, then it was an ego-driven decision, and likely a poor one. The new “management” can’t be blamed for that.

Louisville FB attendance was already declining when the last expansion opened. The "announced" attendance had declined 15% from 2016 to 2017.

 

[beantowncard]

Louisville FB attendance was already declining when the last expansion opened. The "announced" attendance had declined 15% from 2016 to 2017.

Well, to be fair, there had been seats removed to accommodate the expansion, so maybe that had something to do with it. Still, it’s not clear we had the basis for such an expansion.

 

[2330859]

On field performance has been the determining factor as to fan support. This community will never support anything other than a winner.

 

[the artist FKA zipp]

On field performance has been the determining factor as to fan support. This community will never support anything other than a winner.

This is more true than not, and we had that--a winner. No one doubted that was going to change prior to 2017...

 

[the artist FKA zipp]

You’re the data guy. So what data would lead you to believe UofL could fill a 60,000 seat stadium on any consistent basis? I alluded to some metrics above- How long was the waiting list for season tickets? Were secondary market prices for single game tickets going up? Were we consistently selling out and filling the stadium at 42k? What measures of demand drove that decision? If the old “management” made the expansion decision without numbers to back it up, then it was an ego-driven decision, and likely a poor one. The new “management” can’t be blamed for that.

You may or may not recall the stadium expansion strategy at one time...

You sell enough suites and premium seats to pay for the expansion or most of it. With the fund raising we once had, much of that money would been banked before shovels broke ground.

Nosebleed seats could never be justified on their own merits. There's simply not enough revenue. So you piggyback adding that capacity with the high revenue seating, licenses, and rentals. You might fill those cheap seats for the big games, but they're not determining your profit/loss on stadium capacity increases.

Where we have fallen short along with all of our other fund raising is operating revenue from football and men's basketball games. Go back and reread the OP. It's no surprise that you can't put clowns in charge and get the same results. I believe I've been saying that, and this is simply another example...

 

[the artist FKA zipp]

To further make the point, here's a few data points for football revenues then and now...

2017 season actuals
Ticket sales + loge seats: $14.8 million
Suite rentals: $2.2 million

2022 budget
Ticket sales + loge seats: $11.1 million
Suite rentals: $2.1 million

2017 was the year Jurich was kicked to the curb. And bear in mind that inflation was up 20% over the time period shown here.

Forget about filling extra seats at the stadium. We're not filling the ones we used to fill...

 

[HiStepper]

Louisville's actual FB attendance is anybody's guest. The “announced” figures don’t tell the whole story. They are merely estimates, according to athletics department spokesman Kenny Klein, that include not only fans at the game but also non-ticketed people such as concession workers, security and media, and “no shows.”

 

[beantowncard]

You may or may not recall the stadium expansion strategy at one time...

You sell enough suites and premium seats to pay for the expansion or most of it. With the fund raising we once had, much of that money would been banked before shovels broke ground.

Nosebleed seats could never be justified on their own merits. There's simply not enough revenue. So you piggyback adding that capacity with the high revenue seating, licenses, and rentals. You might fill those cheap seats for the big games, but they're not determining your profit/loss on stadium capacity increases.

Where we have fallen short along with all of our other fund raising is operating revenue from football and men's basketball games. Go back and reread the OP. It's no surprise that you can't put clowns in charge and get the same results. I believe I've been saying that, and this is simply another example...

What you are saying is that somehow, people who wanted suites under Jurich no longer wanted them when he wasn’t there. What exactly were they paying for? The thrill of shaking hands with TJ? That’s always been the problem with your thesis- all based on some magic that somehow people would only do business with UofL if one guy ran the athletic department. The fact is that there was no solid financial basis for the expansion even if that were true.

 

[2330859]

I am one of those who had FB and BB Suites during the Jurich era, and walked away. My reason for leaving had nothing to do with TJ’s departure, but I must confess that he and his team (Mark and Mike Dudas) had a huge impact on my business partners and I making our original commitment.

Reasons vary from one to another, but I can say that I know several others who withdrew their large donations for the same reasons that we did, and interestingly the BB and FB departures had little to do with one another. BB got to the point where customers, family and friends alike became increasingly disinterested in most of the schedule. The usual suspects like UNC, Duke, UK were obvious exceptions, but the vast majority of the schedule were simply unattractive, or fell on late weekdays where folks had school or work obligations the next morning. I see nothing that would bring me back to BB, unless a lot of changes took place.

However, I missed the FB games a lot, and we are looking to reengage under a recent offer from UL that appears far more attractive than when we left.

 

[beantowncard]

I am one of those who had FB and BB Suites during the Jurich era, and walked away. My reason for leaving had nothing to do with TJ’s departure, but I must confess that he and his team (Mark and Mike Dudas) had a huge impact on my business partners and I making our original commitment.

Reasons vary from one to another, but I can say that I know several others who withdrew their large donations for the same reasons that we did, and interestingly the BB and FB departures had little to do with one another. BB got to the point where customers, family and friends alike became increasingly disinterested in most of the schedule. The usual suspects like UNC, Duke, UK were obvious exceptions, but the vast majority of the schedule were simply unattractive, or fell on late weekdays where folks had school or work obligations the next morning. I see nothing that would bring me back to BB, unless a lot of changes took place.

However, I missed the FB games a lot, and we are looking to reengage under a recent offer from UL that appears far more attractive than when we left.

Interesting. Thanks for your input.

 

[the artist FKA zipp]

I am one of those who had FB and BB Suites during the Jurich era, and walked away. My reason for leaving had nothing to do with TJ’s departure, but I must confess that he and his team (Mark and Mike Dudas) had a huge impact on my business partners and I making our original commitment.

Reasons vary from one to another, but I can say that I know several others who withdrew their large donations for the same reasons that we did, and interestingly the BB and FB departures had little to do with one another. BB got to the point where customers, family and friends alike became increasingly disinterested in most of the schedule. The usual suspects like UNC, Duke, UK were obvious exceptions, but the vast majority of the schedule were simply unattractive, or fell on late weekdays where folks had school or work obligations the next morning. I see nothing that would bring me back to BB, unless a lot of changes took place.

However, I missed the FB games a lot, and we are looking to reengage under a recent offer from UL that appears far more attractive than when we left.

@2330859

You mean you didn't bail on us because of the scandals? That's the explanation I was always given for the thousands of fans and millions of dollars that are apparently gone for good.

Appreciate your honesty. Too damn little of that around U of L nowadays.

What you are saying is that somehow, people who wanted suites under Jurich no longer wanted them when he wasn’t there. What exactly were they paying for? The thrill of shaking hands with TJ? That’s always been the problem with your thesis- all based on some magic that somehow people would only do business with UofL if one guy ran the athletic department. The fact is that there was no solid financial basis for the expansion even if that were true.

Fund raising is an ongoing process. You have to recruit and re-recruit the people who write big checks. We have no one anymore who knows how to do that or even acts like its important. And that's why/how we've dug the financial hole we have...

 

[2330859]

That is correct Zipp, as Tom Jurich put together a quality level of staff (like Mike Dudas) who invested a lot of time developing personal/business relationships with the Donors, and the experience that we had with UL during the Jurich era was one of mutual respect. I never once had to go directly to Tom for any reason, as Mike had 100% of Tom’s support. There were a few times when Mike was out of pocket and Mark would step in quickly.

Some may question why so many Donors supported Tom’s return, but from my own experience; it felt like UL would go well beyond normal parameters in addressing fan issues. I hope Josh will reinstate the environment that TJ established in the program …….. as it was definitely missing while Vince was there.

 

[gocds]

That is correct Zipp, as Tom Jurich put together a quality level of staff (like Mike Dudas) who invested a lot of time developing personal/business relationships with the Donors, and the experience that we had with UL during the Jurich era was one of mutual respect. I never once had to go directly to Tom for any reason, as Mike had 100% of Tom’s support. There were a few times when Mike was out of pocket and Mark would step in quickly.

Some may question why so many Donors supported Tom’s return, but from my own experience; it felt like UL would go well beyond normal parameters in addressing fan issues. I hope Josh will reinstate the environment that TJ established in the program …….. as it was definitely missing while Vince was there.

Hey 233 I totally agree with your take. Our athletic department has taken a step backward and there is no obvious reason for this occurring. Maybe some real smart person can explain all the wherefores and how to's and whys of this
situation.

GO CARDS!!!

 

[the artist FKA zipp]

Some of us have heard versions of @2330859's account from other fans. I don't know how or why someone--new U of L operatives--would need experience handling existing business. I can understand how they're having a hard time replacing lost business or attracting new business. That's what you need experience doing.

I've never been much of a conspiracy theorist trying to describe why stuff is happening. But when you're struggling to come up with explanations that make sense, I'm fine discussing that some or a lot of our decline is part of a master plan. I wish there was a better explanation, but I'm not going to remain in denial if indeed that starts to be the only thing making sense.

I'm already down that path acknowledging that some financial issues which should be important to U of L--like keeping current fans satisfied--don't appear to be. At least not anymore...

 

[glassmanJ]

here's the simple truth, imho, is that i doubt in Cardinal history that we've sold out even 10% of our total home games. that means expansion technically should have never happened. and when it did, the expansion should have been in the end zones in the lower bowl and not creating the upper level of seats. the crowd should have been closer. imho again, now i think the upper seats should be reduced to wider more comfortable seats. and lesson seat numbers to create a want for them, but as of now i'd never buy a iticket to a game as there is great chance i can get a free one or a $10 one on the lot. reality is unless we are going undefeated, we will not fill the seats. heck, i think most schools not in direct contention for a title don't have sell outs. unless you're in BFE and nothing else to do but tailgate on a weekend

 

[bobwest]

Good analysis Zipp. It will be interesting to see what happens if we start winning again/.

 

[the artist FKA zipp]

Yep, if we have an opportunity to wait… 😎