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When $17 million just isn’t enough

February 27, 2010

What would you do with $18.3 million?

That sum is the amount of money expected from football ticket sales by the University of Wisconsin Athletic Board in its 2010-11 budget approved last Friday. It also accounts for more than 22 percent of the $83.088 million budget request approved by the board.

Along with the budget, the board approved a $3 per ticket increase for general public and student season football tickets, increasing the prices to $42 and $22 per game, respectively.

Working with the board’s figure of $18.3 million, the ticket increase would bring in $1.3 million for the season. If that were the case, a 7.14 percent price increase would generate a similar percentage of the expected football ticket revenue for the department.

But is an additional $21 out of every season ticket holder’s pocket necessary for just a 7.1 percent increase when state unemployment rates reached 8.7 percent in December 2009?

The answer, in short, is yes.

A $3 per ticket hike represents a 7.14 percent increase, which is greater than the average ticket price increase (5.3 percent) in 2010 for the Milwaukee Brewers but less than the increase (up to 15 percent) announced by the Green Bay Packers last month.

Likewise, the University of Wisconsin remains sixth in the Big Ten in terms of ticket prices and the $42 price tag is less than the conference average of $44 per ticket.

Ticket prices for the university’s other two revenue-generating sports — men’s basketball and men’s hockey — remain unchanged, as they have since 2006 and 2005, respectively.

The board’s decisions were expected and the ticket increase for football was the first by the UW in any major sport since increasing football ticket prices in 2007.

Based on rising costs for team travel, scholarships, and equipment (among other things) it’s clear a $3 increase was necessary for the financial sustainability of the Athletic Department. Since the last ticket price hike in 2007, tuition alone at the university has gone up $1,125.36 (15.6 percent) from $7,188.40 to $8,313.76.

Considering tuition makes up a significant portion of the full and partial scholarships awarded to approximately 350 athletes annually, the rising costs of tuition have certainly had a significant impact on the Athletic Department. According to the department’s 2008-09 annual report, UW scholarship costs are expected to reach $10 million per year by 2011.

Of its $83 million budget, only 30 percent is “guaranteed” money according to what John Jentz, the associate athletic director for business operations told the finance, facilities and operations committee last week.

The other 70 percent comes from fans, including (but not limited to) ticket revenues.

Though the UW has 23 Division I sports, the Athletic Department relies on football to generate more than two-thirds of its ticket revenue. Through that revenue, and a five percent budget cut for 22 of 23 sports next year, the Athletic Department expects a surplus of just over $100,000.

Since the sizes of Camp Randall Stadium and the Kohl Center cannot easily be increased, the only logical way to increase revenue is through raising ticket prices.

Furthermore, based on the average time between raising ticket prices, the board easily could have increased prices by $3 in men’s basketball as well, generating another $900,000 in revenue based on the team’s average attendance over 18 home games last season.

Doing so would give the Athletic Department a generous surplus of more than $1 million, as opposed to a slim positive margin of a little more than $100,000. Such a surplus could even negate the need to make five percent budget cuts for the second of three consecutive years.

But by choosing to forego raising basketball (and hockey) ticket prices for another year, as well as cutting the budget by five percent for all but one sport, the board showed concern for the current economic climate while also addressing its own financial needs.

There was simply no other way for the department to remain financially self-sufficient and support 23 Division I sports without making more significant budget cuts.

For that, the UW Athletic Board should be commended for the $3 ticket increase.

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