Impact of Ticket Sales on Overall Revenue

[Panjandrum]

MIR was right; I don't want to further contribute to the oscar(ing) of the Carousel thread.  So, I'll drop this here.

I took margins earlier today from the Equity in Athletics report.  That wasn't really detailed info.  I went further down the page (http://www.kstatesports.com/page/financial-info) and looked at the NCAA statements of revenue and expenses.  While the numbers don't match up (no idea why; probably need Dax to weigh in), the more detailed breakdown illuminated a few things.

1) Ticket sales as a percentage of overall revenue is pretty damn static

For the five years of reports out there (2011-2015), here were ticket sale revenues and the percentage to overall revenue:

2011: $3,584,504 (34%)
2012: $3,844,944 (31%)
2013: $3,911,661 (33%)
2014: $3,541,239 (31%)
2015: $3,708,631 (31%)

We can fight about ticket sales and impacts to ticket sales, but in Jake's senior year, when we were preseason Top 5, we saw a 3% bump in percentage to overall revenue.  To me, that speaks volumes.

2) Our average profit margin is relatively static

Average MBB profit every year, according to this report, is $5.9 million.  Every single year, with the exception of 2012, saw a profit margin within a few hundred thousand dollars.  The biggest deviation was 2012, where we saw an increase of ~$950k over average.  That year had an unusually high distribution from the NCAA.  I don't know why.

3) oscar's teams have exceeded average revenue 2/3 years.

Average revenue is $11.6 million a year.  In 2013 and 2015, we've exceeded that margin twice.  The year we missed, we were short about $375k.  The years we were over?  We were over about $250-350k.

All of this makes it easier to understand why we just gave oscar Frank's old contract.  No matter what we do in this space, we're making the same amount of money.  As long as oscar just keeps us in that ballpark, and keeps us out of trouble with the NCAA and doesn't give Currie headaches, I can see why Currie is hesitant to make a move.  We don't want to pony up the $2.5 million because whatever we do doesn't seem to really move the meter one way or another, and that $2.5 million is basically a sunk cost because we just want to make a change.

Which, again, supports my narrative that the choice of oscar vs. Brad is going to have to be made by the big money donors that are providing a separate line item in the budget.  I'm sure Currie would be open to it if someone is willing to write that check for $2.5 million and then add whatever it would cost to break Brad's contract.  But he'd rather have someone write the same check to update the East Side club seats.

It's simplistic thinking, but looking at these numbers, I'm wondering if Currie looks at this like building a boathouse.  It's just a big money expense that isn't really going to positively impact his revenues.  Therefore, all he needs to do is put out some more videos about #Family, vilify the "youths" of today (and their devil weed), and he'll keep that core 11k season ticket holders shelling out the money to make his yearly plan.

[HerrSonntag]

I can't believe the amount of adversity that is brought on by being the AD's fiscal wiping boy.

[DOD Take 2]

I'm pretty sure payouts from the NCAA are directly tied to wins by your conference in the tournament

[Trim]

Are those ticket sales revenue figures just for the ticket price, i.e. they don't include the mandatory donation required to buy season tickets in many sections? 

[The Big Train]

This is one of Panj long posts I normally don't read, but I read every word. This solidifies the fact the Currie does not care about K-State and he is a complete money manager.

There is no other conclusion to what was said here.  We can bitch and moan all we want, but until we impact his money model, nothing will be done.  Maybe I need to step my game up, but I am willing to do that if it means we can get rid of oscar.

[Ptolemy]

End of the day, doesn't matter how much of a money nerd Currie is, you must let your feelings be measured by your dollars.

I have two season tickets that are not being renewed. If he fired oscar and hired a coach that wasn't just fired from a p5 conference school, and had successful head coaching experience and/or a KState pedigree, I would buy 4 tickets tomorrow.

[Panjandrum]

Are those ticket sales revenue figures just for the ticket price, i.e. they don't include the mandatory donation required to buy season tickets in many sections?

There was a line item for contributions, too, and it was pretty much around $3 million a year, give or take a few hundred thousand.

Aside from the NCAA line item, nothing really deviated all that much year over year.

[Panjandrum]

End of the day, doesn't matter how much of a money nerd Currie is, you must let your feelings be measured by your dollars.

I have two season tickets that are not being renewed. If he fired oscar and hired a coach that wasn't just fired from a p5 conference school, and had successful head coaching experience and/or a KState pedigree, I would buy 4 tickets tomorrow.

We haven't seen 2015-2016 data yet, but your tickets will probably be taken by someone else if recent history is any indicator.

[Panjandrum]

This is one of Panj long posts I normally don't read, but I read every word.

Jesus Christ; I gave you bullet points.  How lazy are you?

[nicname]

Haven't been to a game since 2014. Just doing my part.

[sys]

jfc, panj.  of course ticket revenue was nearly static during those years.  paid attendance was nearly static.  2016 will be the first year of ticket sales following a down year.  2017 will be the first year of sales following two down years.  until you can include those years, your analysis is meaningless.

you'd be better served looking at the altman years.

[The Big Train]

This is one of Panj long posts I normally don't read, but I read every word.

Jesus Christ; I gave you bullet points.  How lazy are you?

I read this one tho!  I guess if not wanting to read 10 page essays on a KSU message board is lazy, I am pretty lazy.

[Cire]

#dontgo


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[Dr Rick Daris]

It was a good post and gives you a good idea at what Currie cares about. I mean yeah he'd probably rather win than lose but it's not a major thing.

[O-town Kat]

you'd be better served looking at the altman years.

Or try applying % decreases from football 2006-2007-2008?

Feels a little like 2008 where the case could've been made for Ron to get a 4th year, but the fanbase was so miserable about the program it would've been hard to market him for another season.

[Panjandrum]

jfc, panj.  of course ticket revenue was nearly static during those years.  paid attendance was nearly static.  2016 will be the first year of ticket sales following a down year.  2017 will be the first year of sales following two down years.  until you can include those years, your analysis is meaningless.

you'd be better served looking at the altman years.

I don't have numbers for the Altman years, but did they do Ahearn donations back in those days like they do today?

I plan to look at this when they release in June/July for this year.

[Panjandrum]

So, I dug through the equity in athletics reports a little more and got some line items out of the longer reports.  I like these better because they were audited by an accounting firm.

What I don't like is that when you read one, it includes that year and the previous.  And when you read them side by side, old and new, the line times for the previous year don't always add up in terms of total revenue.  The previous year's is usually adjusted down.

Regardless, I played with the numbers a little bit more to get a better feel for growth.

Major points:
* Year over year, MBB ticket sales make up 5-6% of overall revenue
* Year over year, Football ticket sales make up between 16-19% of overall revenue
* Year over year, MBB revenue distributions from the NCAA/Big 12 make up 6-7% of overall revenue
* In the past six years of data (2010-2015), Big 12/NCAA distributions of football revenue have gone from 12% of overall revenue in 2010 to 28% in 2015.  This accounts for nearly $17 million additional dollars per year between 2010 and 2015
* Contributions (not sure what all of this entails) generally make up between 20-26% of revenue; recent years have seen 26% (2013-2015)
* Profits in MBB have been relatively static for the past six years.  Only one year (2012) has it been outside of a $2.2-2.8(ish) million range.
* Profits in Football have seen drastic change, going from $6.7 million in 2010 to $18 million in 2015.
* Ticket sales in football have seen a $3 million increase between 2010-2015, Big 12 distributions have seen an annual $8 million a year increase

I get what sys is saying, and I agree that we've had a generally full Bramlage the last few years, therefore, revenue is going to remain static.  However, my main point is that we know what the ceiling most likely looks like, and that's seeing, maybe, a 1-2% bump to total revenue if we were to completely sell out and up the price and get more Ahearn donations. But, again, that's not going to pay for oscar's buyout in less than 2-3 years.

Now, if you want to look at opportunity cost of having a less full stadium, I'll go with that.  If we saw a 25% decrease in ticket sale revenue, you're looking at an impact of several hundred thousand dollars, which is probably about a 1% impact to the overall revenue.  At 50%?  That would be a $1.8 million hit to the budget. ~2.5%  That's all.  It takes two years of that to recover the oscar buyout, and we certainly won't see half of ticket sales decrease this quickly.

So, again, if we're looking at monetary impact to sway Currie, it's going to have to come at the Ice/Vanier/Edgerley level.  They are the folks who can make Currie feel financial pain in the short term.  A grassroots movement that could decrease attendance by 1500-2000 won't make a dent.

[AndrewVonLintel]

My assumption is Huggins and Michael Beasley returned our ticket sales to normal. Since then it has probably been flat.  I would suspect that a lot of seats will open up this summer and more deals will emerge.

[Panjandrum]

My assumption is Huggins and Michael Beasley returned our ticket sales to normal. Since then it has probably been flat.  I would suspect that a lot of seats will open up this summer and more deals will emerge.

My contention is that it won't decrease that much.  We return pretty much everyone, and we add a Top 100 recruit and a kid in Cartier Diarra that seems to look better every day.

My guess is that there will be a press release this summer about how Budke is a recipient of the Brian Roheleder/Chris Merriweather/Victor Ojeleye memorial senior scholarship.  We will get a lot of videos of the guys working hard in the gym.  There will be buddy interview/motivation videos with DJamer and Wes, Dean and Austin.  oscar will rave to the TCJ about how much progress the guys made in Europe and during workouts. He will be radiant about the team culture during media day.

And come November 1, we won't see more than a 5-10% decrease in overall attendance.

[captaincrap]

It was a good post and gives you a good idea at what Currie cares about.

Confirmation bias does not provide any insight to what another person cares about.

[Kat Kid]

My assumption is Huggins and Michael Beasley returned our ticket sales to normal. Since then it has probably been flat.  I would suspect that a lot of seats will open up this summer and more deals will emerge.

My contention is that it won't decrease that much.  We return pretty much everyone, and we add a Top 100 recruit and a kid in Cartier Diarra that seems to look better every day.

My guess is that there will be a press release this summer about how Budke is a recipient of the Brian Roheleder/Chris Merriweather/Victor Ojeleye memorial senior scholarship.  We will get a lot of videos of the guys working hard in the gym.  There will be buddy interview/motivation videos with DJamer and Wes, Dean and Austin.  oscar will rave to the TCJ about how much progress the guys made in Europe and during workouts. He will be radiant about the team culture during media day.

And come November 1, we won't see more than a 5-10% decrease in overall attendance.

this is all true.

[Kat Kid]

It was a good post and gives you a good idea at what Currie cares about.

Confirmation bias does not provide any insight to what another person cares about.

Let's dispel with the notion that Currie doesn't know what he is doing, Currie knows exactly what he is doing.  Currie, wants to win and he can be ruthless in pursuit of that goal.  I'm not just talking about tennis either.  Currie fred Deb and held Leti and Angel hostage to win.  I can't wait to see the beast unleashed to go get Brad.  Will certainly make a lot of people look like fools here, that much is for sure.

[Panjandrum]

It was a good post and gives you a good idea at what Currie cares about.

Confirmation bias does not provide any insight to what another person cares about.

I believe that Currie's main priority is the financial health of the department, and then it's the compliance.  If we can win cleanly, and in a fiscally responsible manner, then he is happy.

I do not believe for one second that he doesn't do a cost analysis when making major decisions.  He's too good of a money manager for that. I absolutely believe he has probably done the math on replacing oscar for Brad and has that argument in the quiver if need be.

My contention has been that it will take the big money to push for a change to make him move on oscar. And I don't believe that they've made that demand because none of them want to write a check for his buyout, and Currie doesn't want to take that money out of his budget because the cost/benefit isn't there.

[DOD Take 2]

In your analysis of season tickets sales dropping you didnt take into account the increase of sales under the new coach - the difference between sales under oscar and sales under new coach is the real math. Also, did you consider the seat donations required in your math? Another factor includes concession sales, merchandise, etc. All of that could be declining under oscar but might increase under a new coach. More to it than just direct ticket sales. The amount to make up a buyout could be made up quicker than you think.

[chum1]

I mean, I don't even feel like I have any basis for accepting the assumption that Currie's main priority is to maximize profits with regard to ticket sales, let alone go totally rough ridin' overboard on the idea like this. This shut is nuts.