Much has been written about how limitations on fans at college football games this fall has negatively impacted collegiate athletic departments’ budgets. But at “basketball schools” like the University of Arizona, the prospect of a men’s season without fans in attendance is even more troublesome. Dave Heeke (director of athletics, University of Arizona) explained that if the Wildcats are forced to play games in an empty McKale Center as expected, it would result in a larger loss—on both an absolute and percentage of revenue basis—than the school’s football program will experience this fall. A review of school financials for the 2018-2019 academic year obtained through records requests indicates that Arizona is not alone. There are six Power Five athletic departments that rake in more annually from the sale of basketball tickets than football tickets. Kentucky, Kansas, UNC, Maryland and Indiana are the others.
Our Take: Ticket sales (along with seat licensing and donations) are the primary driver of revenue for both football and men’s basketball at Arizona. In fiscal 2019, the school reported $6.9 million in basketball ticket-related revenues and $6.2 million in football ticket revenues. That may be surprising to some, considering one team plays in a stadium with 57,400 seats while the other calls a venue with just 14,545 home. But college basketball teams host more than twice the number of home games annually (so the value of a season package is higher), and at Arizona “nearly all [of the 14,000 basketball season tickets] are sold along with a donation to the program,” Heeke explained. “Many come with multiple [donations]—a license for the seat as well as a capital gift between $25,000 and $100,000 based on seat location.” That’s not the case on the football side. The demand for the product simply isn’t there.
The Arizona men’s basketball program may only annually generate $700,000 more in ticketing-related revenues than its football counterpart, but the revenue stream represents a far greater percentage of the program’s respective budget. That’s because 85% of the school’s media rights allocation is attributed to football. Heeke estimated a season without fans would result in an 80% decline in men’s basketball revenues, compared to “just” a 55% slide on the football side.
Pressing forward with the ’20-21 college basketball season will give student athletes the opportunity to play (which they want to do, given how college football players reacted when their seasons were originally postponed). Playing the games also enables the conferences and schools to protect lucrative television revenues. In the Pac-12, each member institution is slated to receive close to $30 million for the ’20-21 academic year, down from roughly $35 million as a result of the coronavirus-induced cancellations that have taken place to date.
There are also NCAA tournament revenues to protect. Cancellation of the 2020 dance resulted in -65% reduction in the amount distributed to member institutions ($225 million vs. $600 million). While the Power Five conferences aren’t as reliant on March Madness revenues as those in the Group of Five and the FCS, as Sportico’s Emily Caron recently noted, the fact that each tournament unit is valued at $1.7 million means that failing to get to the end of the season could cost a Power Five conference upwards of $20 million. In a normal year, conference tournament revenues can be significant (20% of Big East revenues come from its annual event). But with a large portion of those dollars coming from ticket sales and with this year’s tournaments unlikely to be played in front of fans (certainly not at capacity), revenue expectations are tempered.
To ensure the conference season can be played in its entirety, the Pac-12 has begun to explore various contingency plans. Multiple athletic directors within the Conference of Champions confirmed that concerns over a couple of positive tests upending the season has spawned discussions about the viability of a bubble solution where as Heeke described “we bring all of our teams—or split them amongst two sites—and let them play for like two weeks.” The belief is that by having everyone in one or two locations, the conference would have greater control over testing and be able to avoid the issues with local health officials (such as Berkeley Public Health, whose relatively stringent restrictions have impacted the Cal Golden Bears). Should the conference ultimately move in that direction (one of the ADs suggested the odds were “relatively high”), Tucson, Phoenix and Las Vegas would be on the shortlist to host.
Power Five college basketball programs should be able to save some money on guarantees this season. Andy Wittry’s Out of Bounds newsletter recently reported that non-conference game payouts are down as much as 30% to 50% in the “new normal.” But with an abbreviated non-conference slate, we’re only talking about tens of thousands saved (low-six figures would be the maximum)—not nearly enough in savings to offset the lost ticketing revenues. It should be noted that schools have also been forced to incur as Heeke described an “enormous uptick” in expenses (think: COVID-19 testing) to keep players safe while playing this season. Those unanticipated expenses are eating up any of the savings incurred on guarantees.