NCAA News Archive - 2005

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Search for revenue prompts ethical choices


Nov 21, 2005 11:47:17 AM

By Michelle Brutlag Hosick
The NCAA News

Getting a ticket to a women's volleyball match at the University of Nebraska, Lincoln, is like finding gold in that Midwestern town. The games, played at the intimate Coliseum, are sold out every year, leaving athletics department employees to tell even friends and family they're sorry, but all the seats are gone.

"I can get you a ticket for football. I can't get you one for volleyball," said Diane Mendenhall, the school's assistant athletics director for development. Perennially ranked in the top 25, the Huskers volleyball team fills the stands so consistently that officials began looking for ways to squeeze more seats into the arena -- and hopefully create a new revenue stream in the process.

For the first time this fall, the department began offering a courtside seat package. For $2,500, a fan can sit just 20 feet back from the baseline in a padded red leather chair with arm rests and a personalized name plate. Seats in an elevated row just behind cost $2,000. For the expenditure, fans also get guaranteed parking, a catered meal before each match, concessions between games two and three and the opportunity to watch a tape of coach John Cook giving his pregame talk to the team.

The tickets sold out before the department could even complete its marketing plan for them, Mendenhall said. The new revenue goes back to the general budget for the department.

Too much like the Los Angeles Lakers for Lincoln? Not so, said Mendenhall.

"There's a demand," she said. "The whole state of Nebraska really treasures the volleyball program, and this is a way they can support the program."

More and more, NCAA institutions are turning to creative ways to generate new revenue streams to bolster athletics departments that are sometimes taxed by rising tuition costs or ambitious facilities plans. The practice is even recognized by the National Association of Collegiate Marketing Administrators (NACMA), which honors annual outstanding achievement in marketing and promotions.

For the 2004-05 NACMA awards, institutions submitted a range of ideas that worked for them -- from partnering with a local fast-food restaurant to sell mascot bobbleheads like the University of California, Irvine, did with Peter the Anteater, to creating a season-long promotion that culminated in the giveaway of a year's lease on a Ford Mustang like Kansas State University did during the men's and women's basketball season.

The University of California, Davis, holds an annual "Aggie Auction" to raise money for grants-in-aid. About 2,000 items were available during a silent auction, and more than 1,400 guests enjoyed a gourmet dinner. Student-athletes provided entertainment, and the live auction included such items as a speed boat and a five-night vacation in Lanai with a butler. The event has raised $2.2 million in eight years, with $425,000 raised in 2004.

Interaction with athletes

In their award submission, UC Davis officials pointed out that not only did the guests support the Aggies financially, but they also got to meet the student-athletes they were supporting.

That feature is an important piece that every institution can use, no matter its size. Mendenhall at Nebraska said she thinks other schools are not taking advantage of the full potential their athletics events offer. The most popular aspect of the courtside seats promotion for the volleyball games -- and similar deals for women's basketball and football -- is the social interaction aspect that fans get to have, both with each other and with the players.

"People are underestimating the value of creating a social atmosphere," she said. "When we started it for women's basketball this year, we decided to charge $400 for the (courtside) seats. It's not a lot, but they told us if we didn't do the social aspect, (they) don't want it. The minute we added pizza and pop, they started selling. They want that social interaction and to feel they're closer to the team."

Finding a new target audience and giving them an opportunity to support something they believe in is a method used by the University of North Carolina, Charlotte. The athletics department officials there created an event last year called "Let Me Play," a fund-raiser exclusively for women's athletics. The luncheon targets women in the Charlotte community who attend the event and are able to listen to female student-athletes talk about the positive influence athletics has had on their lives. Associate Athletics Director Darin Spease said the women then "buy their way out of the room" with donations.

"You're not held or anything, but you're encouraged to donate and give to our women's scholarship program," Spease said. Expected to bring in about $30,000 in its inaugural year, it raised $62,000 in 2 1/2 hours.

"There's an untapped market of professional females who have access to money," Spease said. "Usually people go to the corporate leaders, the same old people, and you just keep going back to the well. We tapped this group of people that didn't necessarily have a tie to UNC Charlotte, but recognized that we're a huge institution within their community, and here's one of our students talking about ... coming to play basketball here and how she's going to graduate in three years and go to grad school and the opportunities this afforded her.

"Everyone is sitting there going, 'Wow, they really deserve our support.' "

Finding funding for athletics departments might look a lot different in the future, according to Leslie Wurzberger, current NACMA president and assistant athletics director for marketing at the University of Washington. She believes that institutions will start mining the Internet and Web sites for new revenue opportunities. Many schools already sell merchandise via the Web, but other possibilities exist.

"I think what a lot of people are trying to figure out and quantify or monetize as an opportunity is the generation of video and audio content," she said. "What is the market out there for someone to watch volleyball and some of the other sports? Obviously, the conference television packages protect a lot of the windows, so the streaming of men's basketball and football is not where the opportunity is, although streaming press conferences and highlight reels with a subscription model, that's a whole thing schools are really trying to figure out the revenue potential."

Wurzberger also pointed to licensed retail promotions as an area that the professional leagues definitely have a handle on, and a lot of schools could quarry that arena for ideas.

"Licensed retail is something that not a lot of folks are capitalizing on -- just the whole licensed merchandise business in general," she said. The National Football League, National Basketball Association and Major League Baseball have created names for themselves in the marketplace, which Wurzberger admitted was more difficult at the collegiate level because of the structure of the NCAA, but still could be taken advantage of at individual institutions.

"You'll see a great local presence, say in Seattle for the University of Washington, but you don't necessarily see a commitment to a broad range of college merchandise in markets all over the country like you would for some of the pro leagues," she said. Licensing is therefore more of a local marketing opportunity for individual institutions than a national one.

The balance line

So when do the attempts to promote and market athletics at the collegiate level begin to look too much like the professional model?

Some aren't sure that there is a definite "line in the sand" that can be drawn.

Jeff Orleans, executive director of the Council of Ivy Group Presidents, said balance is the key.

"I think you have to find a balance between not letting money be the only determinate and taking advantage of people's willingness to be supportive," he said. "For me, it's kind of like Justice (Potter) Stewart used to say about obscenity -- I know it when I see it."

If Orleans walked into a stadium or an arena to see all the students and faculty crowded into corners and high-paying alumni in the best seats, the balance is obviously skewed. But he doesn't quibble over funding mechanisms.

"Whether it's this funding technique or any other funding technique, what is the money being used for and why are we raising it this way instead of any other way?" he said.

Wurzberger said that collegiate athletics departments could learn a lot from professional teams that naturally have more time and resources to devote to marketing than individual institutions do.

"I think you can learn a lot, but I think you have to be careful to understand the environment that you're in and what's going to be acceptable or not," she said. "I think college athletics is so diverse in terms of our markets and campus philosophies that I don't think you're going to see national policies to define that for us. I think it's going to be a case-by-case basis where people have to look and see what the tolerance is (in their area)."

The threat of overcommercialization of college athletics has been an issue looming for years, but Orleans said he believes the transparency of the corporate sponsorships often leads to responsible expenditures and operations within athletics departments. Academic research that is sponsored by outside entities often is not as clear-cut.

"I think the issues are appearance and independence. No one who goes into an arena filled with signs has any doubt about who is sponsoring the athletics department. On the other hand, you can go to classes all over a university and have no idea what corporate support is backing the research of individual faculty members," he said. "That doesn't necessarily mean the faculty are conflicted -- usually they are very upright about it. But it is interesting to me that we talk about commercialism in athletics, and yet it's relatively transparent. The corporate influence on the rest of the institution is much more hidden."

Dan Fulks, accounting program director at Transylvania University and director of the NCAA's biennial Revenues and Expenses of Divisions I and II Intercollegiate Athletics Programs report, said it's clear to him when new and creative ways of generating revenue crosses the line into overcommercialization -- when it starts to negatively affect the student-athletes the revenue streams are designed to help.

"I wouldn't say we are overcommercialized now, and I wouldn't say we are until it impacts the student-athlete. I don't care particularly how it impacts the public...that's not my concern. For many schools, athletics will generate revenues that can be used for other facilities and other programs, and athletics may have an impact on donors. It may and it may not -- we think it does, but we don't really have any hard evidence," he said. "I think we are overcommercialized when we become more like the professional model than the collegiate model, but unless it has a direct effect on the student-athlete, I'm not overly concerned about it."

This is the final installment in the three-part series on funding issues in college sports. Parts I and II were published in the October 10 and 24 issues, respectively, of The NCAA News.



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