Part of Kansas football and its falling fortunes involves a math problem. The key number in the equation is about $6 million.
A Journal-World review of Kansas Athletics Inc. finances found that KU needs to sell about $6 million in additional tickets per year just to get the program back to the brief glory days it had nearly a decade ago in the Mark Mangino era.
KU football ticket sales hit a recent peak of $9.5 million in 2009. In 2017, football ticket sales hit a new recent low of $3.4 million, according to NCAA reports filed by the university.
What to do? There is always the approach of hoping that Coach David Beaty’s system clicks in his fourth season, the wins come and so do fans in seats. KU athletic officials are banking on that strategy. There is certainly a segment of fans, though, who are not buying it.
What else to do? You could recruit The Six Million Dollar Man and redeem him for cash value. No? Well, then, you could undertake about $300 million in football stadium improvements — most of them fan amenities — in an attempt to lure people back into the stands. Maybe. KU officials have started the fundraising campaign.
About this series
When KU announced in September plans to build $350 million in new facilities, primarily for football, it marked the beginning of one of the biggest financial bets the program has ever made. The Journal-World decided to study the financial books, talk to leaders, and give readers a better understanding of the money game that is constantly a part of big-time college athletics. To see more articles go to: ljworld.com/kuath
To some, The Six Million Dollar Man strategy sounds more plausible.
Murray Sperber, a longtime critic of college athletic spending, doesn’t think a fancier stadium is going to draw more fans. He does think it is a heck of a financial risk.
Sperber — who became one of the first critics of college athletic spending with his 1990 book "College Sports Inc." — is now a professor emeritus at the University of California-Berkeley. That school has become the poster child of the dangers of such big bets. It renovated its Memorial Stadium — granted, costs were extremely high because the stadium is on a fault line — but now the Cal athletic department is swimming in red ink, despite football crowds that still top 40,000.
“They admit they lost $14 million last year,” Sperber said of the Cal athletic department. “But that is the low number. Really, it is probably $20 million to $25 million.”
The situation has become so dire at Cal that the university recently agreed to take over about $400 million in athletic department debt. The prospect of cutting some of Cal’s 30 sports programs, however, still remains.
The situations at Cal and KU aren’t entirely analogous. Even if KU debt-financed all of the $300 million in stadium improvements — which it won’t — KU’s debt totals still would be below Cal’s. But Cal also is a much larger university in terms of students and alumni base. While KU’s dollar figures may be less than Cal’s, the risks to KU are still great. Sperber urges KU officials to really think through making such a big bet.
“Nothing we have talked about points to $350 million in improvements,” Sperber said, citing the full fundraising goal that also involves improvements for volleyball and other sports.
KU Athletic Director Sheahon Zenger counters that he’s been thinking about it since his first day on the job. To people in the college athletic industry, it is clear that KU has a big bill looming.
“This day has been coming for decades, and we have kicked the can down the road as a collective group over the years,” Zenger told the Journal-World. “We had a beautiful stadium. It is still a beautiful stadium and setting, but it is getting older and we have to address it. There is no scenario where you can choose to not address it. I don’t think that is a feasible option.”
KU, though, finds itself in a situation where its bill is coming due at a time that fan interest in the football program is hitting new lows.
The Journal-World recently asked the athletic department to provide numbers showing how many tickets actually have been purchased for KU football each year over the last 10 years. KU officials, though, said those numbers were not readily available.
However, the school is required to report its total dollar value of football ticket sales to the NCAA each year. As expected, those numbers show ticket sales spiked in the aftermath of KU’s dramatic 2007 season that culminated with a 2008 Orange Bowl victory. It also shows that KU fans were still spending big in the seasons right after Mangino — the Orange Bowl-winning coach — was ousted. But gradually, the patience of KU fans has eroded, and the bottom has fallen out of ticket sales the last three years.
Here’s a look at the numbers:
— 2006: $6.47 million
— 2007: $5.88 million
— 2008: $6.81 million
— 2009: $9.50 million
— 2010: $9.28 million
— 2011: $9.25 million
— 2012: $6.56 million
— 2013: $5.51 million
— 2014: $5.24 million
— 2015: $3.99 million
— 2016: $4.09 million
— 2017: $3.41 million
From their peak in 2009, KU football ticket sales are down by $6.09 million or almost 65 percent.
The $6 million figure, though, is just one to consider. A larger number is to look at how much revenue has been lost cumulatively. If KU had been able to sustain fan enthusiasm near 2009 levels — say, $9 million a year in ticket sales — KU Athletics would be ahead by about $25 million. That is the difference between $9 million a year in football ticket sales versus what KU actually sold in tickets, according to NCAA reports.
Basketball picks up slack
A 65 percent decline in football ticket sales would create a financial crisis for many athletic departments. KU's athletic department, though, has been successful in getting more money out of KU basketball fans. In 2006, KU was generating about $474 in ticket revenue per seat at 16,300-seat Allen Fieldhouse. That amount doesn't include any required contributions in order to have the opportunity to buy tickets. By 2017, the per seat revenue had grown to $926. Here's a look at the total dollar value of basketball tickets sold over the years:
— 2006: $7.72 million
— 2007: $9.47 million
— 2008: $10.85 million
— 2009: $10.91 million
— 2010: $11.79 million
— 2011: $11.34 million
— 2012: $11.93 million
— 2013: $12.86 million
— 2014: $14.52 million
— 2015: $15.63 million
— 2016: $14.91 million
— 2017: $15.10 million
NCAA numbers also show that KU’s three worst financial years of the last decade have coincided with the downturn in football ticket sales. The worst year was 2012, when expenses exceeded revenues by $8.7 million, largely due to a contract buyout for fired head coach Turner Gill. The second worst year was in 2015, when expenses exceeded revenues by about $347,000. The third worst year was 2017, when the NCAA report showed revenues exceeded expenses by about $540,000. As reported in last week’s article, KU’s audited financial statements — which are different from the NCAA report — showed a worse performance for 2017.
Zenger is mindful of the financial numbers, but they give him no pause in pushing ahead on the $300 million in football improvements. He knows KU’s fan base expects to compete in the top tier of college football, and, in some ways, these pending improvements are just a price of admission.
“Do you think Kansas ought to compete at the Division 1 level?” Zenger says, relaying past conversations he has heard. “The answer is always yes. If so, do you think we should compete in a Power 5 conference? The answer is yes. Then it is kind of a moot point.”
Others, though, wonder whether Kansas ought to rethink what the price of admission ought to be. David Ridpath is an associate professor of sports business at Ohio University and is board president of the Drake Group, an organization that advocates for more financial responsibility in college athletics.
He argues that Kansas ought to think about how much it needs to spend to remain a big-time player in college athletics. As long as it maintains its men’s basketball tradition, Ridpath contends, KU doesn’t have to spend as much as many other schools. Kansas can be a decent football program without a $300 million investment, and there are certainly no guarantees that KU will be a good one even with such an investment.
But being decent doesn’t do much to stir the passions of the alumni or donors. It would take a change in mindset, but perhaps not a radical one. The label “basketball school” has long been attached to KU.
“I think Kansas, because of who they are in basketball, is always going to be in a big conference,” Ridpath said. “They just may never be that good in football. But, then, they have to ask themselves how much do we want to spend trying to be good in football? It is going to be very tough.”
JOURNAL-WORLD SERIES: The finances of KU Athletics• April 29 — A look at the finances of Kansas Athletics: Rising revenues, soaring costs, big bets
• April 29 — KU basketball saves athletic department budget, allows leaders to dream of ‘blue sky potential’
• May 6 — KU football ticket sales down about $6 million per year; some question whether $300 million in new facilities will help
• May 13 — Administrative salaries jumped by 42 percent in a single year at Kansas Athletics; KU salaries top K-State’s
• May 13 — How much does KU spend on athletics? More than the city spends on police, fire and roads, but returns are big too
• May 20 — Girod: Athletics important to KU, but there is a “disconnect” too
• May 20 — Should KU be worried about getting dumped from a Power 5 Conference? The financial stakes are huge
• May 22 — Rock Chalk Park started as $39 million deal for KU; now it may top $100 million after KU allowed lease to be changed