The Cost of Sports — Part 1: Big Orange, Big Costs, Big Recession

No Pass Out Checks | Gate21

So how much is winning worth to you?

This is a question that many have asked and answered over the years.  The reality is that there is no right or wrong answer to this question—it is a personal matter, which really lives outside the confines of "categorical absolutes" and everyday reality.  We all have our limits.  Some are willing to go farther than others.  In the end, though, it is a question of conscience (or of getting caught).

That question is now being supplanted by a new consideration, one which is far more basic and fundamental, and which is bound by the world of reality.

How much are sports worth to you?

I say that this is now bound by reality due to headlines that have become all too common across the country over the last 12 months such as the one in my hometown paper earlier this week.

[caption id="" align="aligncenter" width="350" caption="That's what you like to see first thing in the morning..."]N&O-01-27-09[/caption]

You hardly have to be a news wonk to realize that the economy is seriously in the crapper.  People from all walks of life are being forced to make changes in the way they spend their money and how they live their lives.  With all of the bad news about jobs being cut, investments tanking, and businesses going under many are being forced to cut back not out of thrift but necessity.

Most rational individuals faced with the predicament of making a mortgage payment with dwindling funds or even putting food on the table will usually start by cutting out the things they can live without, namely entertainment and recreation.

Over the past generation, the cost of attending or participating in sports as a fan has increased dramatically.  For example in 1995, the average cost for a ticket to a Carolina Panthers football game was $37.92, in 2008 that average had risen to $63.32, and the Panthers had the fourth lowest ticket prices in the league.  Of course those increases have not been confined to professional sports (which I will address in part 2 of this series).

While food and shelter are obviously not things that a body can go without, tickets to watch your favorite team play are.  That begs the question, is the horizon looking bleak for the financial feasibility and solvency of major sports as we have known them?

The fact of the matter is that, at present, everything and everyone in our society is reeling from the financial crisis that has struck the economy from Wall Street, to retailers, to real estate, to the Mom and Pop operation on the corner.   There is nothing that makes major sports immune from this economic catharsis (wow, I used “catharsis” in a sports blog post).  In fact, for the average person, sports is likely to be the first thing to go after poker and prostitutes (that’s more my usual tone).

I have been a season ticket holder for Tennessee Volunteers’ football for almost a decade now.  At present, I have the right to purchase two seats in Section Y7 of Neyland Stadium.  My seats are in the endzone.  They are by no means bad seats (well, Joel and Hooper at RTT agree with me), but they are anything but the best seats in the house.  But for the Jumbotron, I would not have much a view of happenings near the South Endzone, but I do get to see all the action when the "T" opens.  To continue to be able to purchase these seats, I am required to maintain my yearly donation to the Volunteer Athletics & Scholarship Fund, or VASF.  At the risk of showing my mania and getting flamed for wasting my money, this is how the purchase of my pair of seats shook out for the 2008 season:

Required VASF Donation
$ 1,200.00
Cost of Tickets
$ 630.00
Vol Cushions
$ 70.00
Handling Fee
$ 25.00
Parking
$ 94.00
Total Cost
$ 1,989.00
Number of Home Games
7
Cost per game
$ 284.14
UT 2008 Record
5 - 7
Cost per win
$ 397.80

These figures, do not take into account the costs associated with travel to and from games and other ancillaries.  For me, travel is a considerable cost—especially when gas is high—considering that I live about 6 hours from Knoxville.  These costs, however, fluctuate and it would be difficult for me to assess how much I actually spend on travel.

[caption id="" align="aligncenter" width="530" caption="A = Home, B = Football. In between is a lot of driving..."]260c41d1a144ac53bdd61e9b069aa01a[/caption]

So there you go, I have shown the entire world that I am crazy…

I have been very fortunate in these trying times.  My profession (“graft, corruption, and you” a/k/a lawyering) has not suffered the fall-off that some have, but then again, there are a fair number of law firms that have not been immune to the pressures.  I personally have not been faced with the choice between dropping my tickets or meeting my financial obligations.  As is well known by just about anyone with a pulse,  however, other individuals (as in real people with jobs, families, and lives) have suffered huge financial setbacks in the form of lost income, the mortgage crunch, disintegrating 401k assets, company closures, and layoffs.  Though the government has proposed yet another stimulus package (which MoonDog is not impressed with), like Circuit City, the vast majority of companies on the national landscape are notThe Big Three” and do not get government bailouts.

[caption id="" align="aligncenter" width="265" caption="This message brought to you by the UAW."]Big-3-Bailout-SSS[/caption]

Still, even in the best of times, my football addiction has always been a bit of a sacrifice.  If faced with the choice between Tennessee football or putting food on the table, however, it’s not hard to figure out what the choice would be.

Now, the VASF is in the middle of one of the biggest development campaigns in its history.  To fund the renovations to Neyland Stadium, the athletic department needs to raise money—big stinkin’ piles of money.  At last count, the price tag for renovations is expected to be around $ 200 million dollars—about twice what was originally projected.  From a fan perspective, I will be the first to admit these renovations were sorely needed.  Parts of Neyland Stadium are approaching 90 years of age, and … well … it was showing.  The renovations thus far have been outstanding, and the most recently updated version of the Neyland Stadium Master Plan (PDF Document pdf) looks like it will be fabulous when completed (I’m especially digging the new look for the Real Gate 21).

To fund all of this, a variety of club-seating and luxury box offerings have been integrated into the renovations.  Take for example the new Tennessee Terrace seating option which, I must confess, I was interested in until I saw the cost.

Starting in 2010, the west upper deck of Neyland Stadium will look entirely different than it does now.  The new Tennessee Terrace will include around 1,500 chair-back “club-style” seats, an enclosed (e.g. heated and cooled) “members only” concourse, and other perks.  It’s going to be really nice.

image-thumb.png indoorphoto2fishtrap.sslpowered.com-thumb.jpg

A few promotional images of the Tennessee Terrace. (Click to enlarge)

"Nice," however, comes with a hefty price tag…

Just to get the chance to buy Tennessee Terrace seats, a donor will be required to make an initial “capital gift” of $1,000 up front followed by an additional capital gift of $1,000 paid over 4 years (this second capital gift is currently being waived or reduced if you apply “early” for seats).  Thereafter, to maintain the right to buy tickets in the Tennessee Terrace the donor must make an annual donation of $3,000 … per seat.  Then, the donor gets to buy their tickets at face value.  So, assuming tickets at the current cost (which UT did announce would not increase in 2009) the total cost of two seats for the first season the Tennessee Terrace is open would be $6,630, without even taking into account the $1,000-$2,000 one-time capital gift.  On a game per game basis that computes out to $473.57 per seat, per game (and, yes, donors are required to purchase tickets in even-number increments).

This, however, is nowhere nearly as costly as the West or East Club Seats.  Two seats in the West Club Seats—which are currently being constructed—can cost as much as $100,000 over 10 years followed by a $10,000 a year annual donation.

[caption id="" align="aligncenter" width="465" caption="Current Construction on the West Club Seats"]image[/caption]

Of course, not everyone needs the added cost of a luxury box—as long as you get to walk through the Real Gate 21, you get to see the game.  The problem is that there really isn’t a “budget” package when it comes to Tennessee football tickets.  This is made clear by the 2009 Donor Benefit Chart recently released by the VASF.

[caption id="attachment_2743" align="alignright" width="150" caption="2009 VASF Donor Benefit Chart"]2009 VASF Donor Benefit Chart[/caption]

By my math (which is often highly unreliable) the cheapest a fan could pick up a pair of season tickets for the eight homes games scheduled for the 2009 season would be approximately $820, which includes a $100 donation.  That would be for seats in the South Endzone Upper Deck (not exactly the best in the house).  Of course, all of that is contingent upon enough tickets being available.  Experience says that tickets would not be available at the $100 donation level.  Traditionally, a $500 donation is the minimum necessary to guarantee the right to buy season tickets under the VASF point system, which would raise the total cost to approximately $1220, again for the South Endzone Upper Deck (the Jumbotron would be behind you) nosebleed seats.

[caption id="" align="aligncenter" width="320" caption="The View from the Nosebleeds"][/caption]

Well, at least you could look out at Lake Loudon if you wanted, so there’s that…

Oh, and did I mention that the Neyland Stadium renovations are only one of many projects Tennessee has ongoing, projected or has just completed.  Other projects include the recent renovations to Thompson-Boling Arena and Lindsey Nelson Stadium, as well as the construction of Pratt Pavilion, Allan Jones Aquatic Center, the Regal Cinemas Soccer Facility, and the McKenzie Lawson Athletic Center to name a few.  There are a lot of major projects and expenses (PDF Document pdf) that the athletic department has been undertaking and which donors have been funding.

Now, don’t get me wrong, I’m not trying to flame the athletic department for all of these new high priced seating options, or for the cost of tickets in general.  I understand what it takes to fund a program like Tennessee’s, but I do wonder how far the seemingly endless gravy train can go before it runs out.  A few years ago, I’d have said never.  In light of the current economic circumstances, I am beginning to wonder.

I am wondering not because I think the zeal of Tennessee fans is waning.  On the contrary, given what we have seen since Lane “the Blackjack General” Kiffin was named head coach, I think there are a whole lot of things about which Big Orange fans can be excited.  I do, however, question whether the dedicated and die-hard stalwarts of the Orange Nation, can afford to be a part.  I realize it costs a small fortune to maintain the Tennessee athletic program—a staggering $86,502,857 for fiscal year 2007-08 according to the UT Athletic Department Annual Report—and I understand why.  Paying coaches, maintaining and developing facilities, providing scholarship funds for the student-athletes, and a bevy of other costs add up very quickly.  Of course, it is worth remembering that Tennessee is not alone: a similar set of circumstances is playing out at schools all across the SEC and the rest of the country.

Again, I am not trying to criticize, but simply raising a question: given the circumstances under which we currently live, can the current revenue stream that funds sports be expected to continue into the future?

Of course, Tennessee and the other college sports powers have nothing on professional sports when it comes to being a high ticket item.

That, however, will have to wait until Part 2 of this series

-- So it goes…About Lawvol


Images Courtesy of: Raleigh News & Observer / NewseumUTSports.com / VASFGoogle MapsSmash South SportsGridscape’s Virtual Neyland

6 Responses to “The Cost of Sports — Part 1: Big Orange, Big Costs, Big Recession

  • Home Sweet HomeNo Gravatar says:

    “poker and prostitutes”…lulz…

    seriously though, well done. lots of numbers and analyzing there. for me, two things come to mind:

    (1) I can’t wait til I can no longer pay $15 for football games and $0 for basketall games. just one year left!

    (2) in terms of the future, the student body now has got to be as apathetic a student body as there’s ever been at UT. only the Florida game sold out for football this year, and last night – for a must-win SEC game against a good team – there were lower bowl student seats open AT TIP-OFF. half the standing only section was full too. I mean, these are the donors of the future, right? cause for concern if you ask me…

  • jimvolsNo Gravatar says:

    Excellent article, great research, well done. Very interesting and thought provoking. That being said…dammmm Neyland Stadium in 2010 is going to look awesome! That brick and glass facade looks incredible!

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