Earlier this week, USA Today released financial numbers for athletic departments across the country. I thought it would be interesting to take a look at Virginia Tech’s numbers as compared to other ACC schools, and major programs across the country.
Note that Randy Jones will be doing a VT finance TSL Pass article again this year, and this isn’t meant to overlap Randy’s work. It’s simply a different way of looking at things.
Remember that this is about accounting. Some schools might choose to count revenue differently than others. I’ll admit I’m a novice when it comes to accounting, but you accountants out there know what I’m talking about.
The National Championship: A Rich School’s Game
Let’s take a look at all the teams that have played for a National Championship in the BCS era and see how they stack up in the national rankings in terms of 2012 revenue (2011-12 academic year).
#1 Texas: $163,295,115
#2 Ohio State: $142,043,057
#4 Alabama: $124,899,945
#5 Florida: $120,772,106
#7 LSU: $114,787,786
#9 Oklahoma: $106,456,616
#10 Auburn: $105,951,251
#12 Tennessee: $102,884,286
#13 FSU: $100,049,444
#16 Oregon: $94,635,829
#26 Nebraska: $81,631,252
#34 Virginia Tech: $70,723,748
Note that schools like Southern Cal and Miami are private schools, so they don’t have to report athletic department finances. I’d imagine that Miami’s isn’t particularly high, though their location helps them make up for that in terms of recruiting.
Every one of those schools except for Oregon, Nebraska and Virginia Tech has won a National Championship during the BCS era, and obviously those three schools are the lowest ranked in terms of 2012 revenue of all programs that have played for a National Championship.
It’s important to note that every single program that has won a National Championship in the BCS era brought in at least $100 million in revenue in 2012. That shows that teams with bigger fan bases who can fill 80,000+ seat stadiums are capable of generating a lot more revenue, and that those fan bases, stadiums and facilities are important for attracting the recruits needed to win a National Championship.
You can probably put an asterisk next to Oregon. They don’t have a huge stadium or a huge fan base, but they’re funded by Nike founder Phil Knight, so quite a bit of Nike money goes into that program.
That tells me that Virginia Tech needs to continue to try and build their fan base and donation support. They need to try to get younger alums involved in the Hokie Club to raise more donation money. They need to find different ways to generate revenue for the athletic department. (As a side note, the ability to use credit cards to purchase concessions in Lane Stadium and Cassell Coliseum would be a start. I don’t know how much food I haven’t bought over the years because I never carry cash on me, but it probably runs into the hundreds of dollars. And I know I’m not the only one.)
I think it’s important to remember that Virginia Tech hasn’t been a big state institution for very long, at least not when compared to the other schools on that list. For over half of Virginia Tech’s existence, it has been a small military school. As a university, Virginia Tech is still growing. I think it’s pretty impressive what the Hokies have been able to do, considering how they stack up financially to those other athletic departments.
Of course, being in the $100 million club doesn’t guarantee you a National Championship.
#3 Michigan: $140,131,187
#6 Texas A&M: $119,702,222
#8 Penn State: $108,252,281
#11 Wisconsin: $103,803,040
None of those schools have played for a National Championship since the BCS era began. Michigan did manage to split the title in 1997, the year before the BCS began. Each one of those programs has the potential to win the National Championship with the right coaching staff, simply because they all have very strong financial foundations. Penn State might be down right now, but the potential will always be there because of their huge fan base, their 100,000+ seat stadium, and their incredible amount of money.
The long-term solution for Virginia Tech is sustaining growth and finding new revenue streams, just like every other business (come on Swofford, get with the program on an ACC Network!). The short-term solution is finding and signing the next Michael Vick. That’s tough, because these days the Hokies would have to beat out schools with a much higher prestige than Syracuse to land a guy like Vick.
ACC Comparison
Florida State is the only athletic department in the ACC that surpassed $100 million in revenue, and the Noles barely make it above that mark. Here’s how the league’s schools stack up, and remember that private schools don’t report.
FSU: $100,049,444
Louisville: $87,840,501
UNC: $82,424,430
UVA: $80,835,566
VT: $70,723,748
Clemson: $70,002,280
Maryland: $68,142,660
GT: $63,184,163
NC State: $59,757,911
Virginia Tech ranks in the middle of the pack in the ACC, with Duke, Wake, Notre Dame, Syracuse and Miami not reporting in because of their private school status. Pitt’s numbers aren’t available either, despite their status as a public school.
The Hokies are 5th out of those nine schools, and they are actually closer to 8th place Georgia Tech than they are 4th place UVA. That doesn’t necessarily mean anything when it comes to football, as schools like UVA and UNC spend more on their Olympic sports than Virginia Tech. Tech’s football program funds the Olympic sports, but in general I think the Hokies do a good job in keeping things football-centric, which is the correct decision. It is the sport that pays the bills, after all.
Louisville’s numbers are particularly impressive. They’ve been playing in the Big East, which has a much smaller television contract than the ACC. Once they join the ACC, look for their revenue to take a big jump. At some point they could potentially join Florida State in that $100 million club.
I had no idea that Louisville had so much money until recently, when they were admitted to the ACC. That’s going to be a great move for the conference, and for Louisville. The ACC just grabbed a team that destroyed Florida in the Sugar Bowl, while Florida State won the Orange Bowl. I think the future of the league looks better with Louisville and without Maryland. Check that .. I don’t think that, I know that.
Related: Florida State Leads ACC in Revenue Generated — InsideTheACC.com
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Well, we all know what the next move by Mr. Weaver is likely to be: Find another creative way to grab the fan base by the ankles, turn ’em upside down, and shake ’em until their pockets are empty. We’re likely to soon have football re-seating at 3-year intervals, accompanied by increases in the contribution level minimum thresholds. I’ve got a bold suggestion: How about we re-kindle interest and greater contributions by winning important games? Let’s start by preparing well for Alabama and playing an inspired, competitive game against them.
All eyes are on the elusive Mythical National Championship. But these numbers highlight Virginia Tech’s biggest risk, and that is falling to the second tier of the ACC. We will be hard-pressed to regularly compete for the ACC championship if Loserville, UNC and UVa are spendin 10-17 million more a year on their athletic budgets. I’d also assume that schools like Notre Dame, Syracuse and Miami exceed our 70 million dollar number.
I’d say in the next five-10 years, Tech has to get its revenues up to 80-85 million.
We’re not going to win an MNC when our revenue is at the middle of the ACC. That number would also likely be near the bottom of the SEC.
I think VT better be on the higher end of that and approaching $90Million. If costs stay the same for the next ten years and we assume revenue goes up almost 1%, that would put VT at around $78Million. I’m no economic whiz, but you have to expect inflation of at least 1% a year over a decade. If we aren’t at least at $85Million in revenue we will be losing in relation to where we are today. Hope someone from VT, finds an oil well on their property.
There are many reasons that people drop their Hokie Club membership. I inherited a quarter of a million dollars, and started giving the HC $5,000 per year…until my wife committed adultery, deserted our marriage and had the gall to sue for custody of our children. Settlement costs, lawyers fees, and loan payoffs wiped out my inheritance, and I couldn’t afford to give to the HC anymore.
Divorce, unexpected medical bills, a bad economy and other reasons cause more drop outs than dissatisfaction with the program. I’d still give if I could because I have a lifelong emotional investment in Virginia Tech. I used to give equal amounts to the University and to the athletic program. Now I have to depend on someone else to pick up the slack I left, and that someone has got to avoid the financial crisis bug.
Do the math. Do not assume everyone gives up on Tech because of a 6-7 season.
Correct me if I am wrong, but private organizations run the concession stands. It is like a fund raiser. So they do not set up merchant accounts, for just 6 or 7 Saturdays. That said, students don’t carry cash, at least they don’t when they spend money with my business, so concession sales would increase, if credit cards were accepted. From an operational standard, accepting may make the lines longer.
If we raised our Athletic Fees for students we could generate a substantial amount more in revenue.
We are currently sit in dead last in the state in Athletic Fees at $267.. the next closest is Mason at $514. If we raised ours to be on par with uva ($657), that would generate ~10.7 Mil in additional revenue.
Listing of VA schools/fees based on 2012 Numbers.
College Athletic fees per student Total fees collected
Longwood $1,767 $6,943,755
Norfolk State $1,510 $10,023,282
Virginia Military Institute $1,430 $2,956,564
William & Mary $1,485 $10,910,040
Old Dominion $1,210 $26,024,503
Radford $1,123 $10,296,248
James Madison $1,153 $27,298,448
University of Virginia $657 $13,131,129
Virginia Commonwealth $635 $16,677,203
George Mason $514 $13,379,272
Virginia Tech $267 $7,347,478
Just playing devils advocate as a student, but dont we pay enough already? Especially as an out of state Hokie we end up paying around about 20-25k a year, i feel like the university is already making plenty of money that way. Especially when the BOV was so happy that they announced this year would be the smallest INCREASE in cost of attendance in 10 years.
The other problem is applying the fee to everyone, while I understand that everyone has the chance to participate in the programs funded by the fee, rec sports and and the gyms, not everyone does. Thus the small fee I think is right where it should be.
While there are certainly more opportunities for the school to raise money, I feel the students, who are paying more to attend then at any point in school history, are not it.
This guy is crazy. Student fees are a crime. No one should have to pay something that
they do not use.
So you just destroyed the government of every town and city in America. Do you pay taxes, I do? There are a lot of things I don’t and can’t use, my tax money pays to establish and run. That being said, maybe VT should increase the fee to be on par with other schools, then provide credits for the following semester for unused portions. Certainly not all of the fees would be able to be given, but if you attended no football games, a portion of the fees could be redistributed.
Now, if you had gone to VT, lets say 20 years ago, you’ll realize what the improved sports program has generated for the University and town of Blacksburg. New Academic buildings/Gyms(McComas), etc… I’m guessing most people use those and without athletic fees, maybe none of that happens. I’m sure some on here can say how much more different it was prior to the early 80s run as well.
One point about recruiting Michael Vick (and I know you know this). He wasn’t even the #1 QB in the state that year. The problem you are pointing out is recruiting the next Michael Vick when he’s already a phenom in HS and Tech is competing with USC, Alabama, Texas, etc. It’s far more plausible that Tech might recruit a somewhat unknown “diamond in the rough” player who turns out to be of Michael Vick quality (talking atheletic ability here).
But that’s still like making the Power Ball ™ the foundation of your retirement plan. Let’s hope that we have a few lightly recruited offensive linemen that Coach Grimes can turn into the next Jake Groves. I like the odds a little better on that. And if one of them can start a company that makes billions and becomes a VT sugardaddy…
That’s a good point. It’s not on the athletic department to increase revenue, it’s on all us lazy alumni to get off our butts and become billionaires! 😉
-Alpha ’99
Virginia Tech has continued to recruit it’s next Michael Vicks. Its been guys like Bryan Randall, Tyrod Taylor, Marcus Vick, Sean Glennon, Ike Whitaker,
The last few years, we’ve lost out on guys like Mike Glennon, EJ Manuel, Tahj Boyd, Kevin Newsome, Bryn Renner, Philip Simms, and Lafonte Thourogood. But hopefully this year we turned a corner by signing Bucky Hodges.
That said, we’ve kept recruiting quarterbacks with high school resumes on par with Michael Vick. What is always missed in the “We need to find our nex Michael Vick” discussion is that Vick was the final piece in the puzzle, not the building block of the 1999 championship team.
Every other part of the 1999 was strong; OL, RBs, WRs, and that team had a killer defense and kicking game.
Talk blue-chip QBs all you want. If he doesn’t have the OL, RBs, and WRs, it’s tough to win games. (that would be Logan Thomas’ fair complaint).
Seems to me that marketing and building revenue is one of the areas that needs rebuilding at VT. It is not just Offense coaches that have been needed.
I must be pretty F’ed up at football games. I never really noticed the credit card thing.
You are such an OUTLAW! Getting F’ed up @ football games. WTH!
While they should be able to process credit cards, you guys sound like my brother in law who gets a big suite on a Royal Caribbean cruise, then expects to be treated as royalty during the cruise because got a suite. He ignored the fact there were 3,798 other passengers on the cruise.
Those of you who dropped your HC membership because of one ho hum season. Shame on you.
I dropped out before the poor season. It was either ’05 or ’06.
There actually is a fairly simple solution. We need to identify someone who will pay for us to expand the capacity of Lane Stadium to 90,000 seats, and who will help us identify the people who will fill those seats, and all of our problems will be solved. It’s all downhill after that.
Well, while I don’t think a lot of folks would call Jim Weaver Mr. Personality, I think he is a good judge of finances. I dunno…maybe his reputation is greater than reality, but I feel like if there was a path there, he would have led us down that path. I think the current capacity of Lane is capped due to what he feels could be paid for. Seeing tickets being sold at reasonable (often below face value) prices leads me to believe we’ve absorbed all the capacity we can for now. Supply is at or greater than demand.
I think it will take a pair of Michael Vick type years to spool up more interest. Those two years drove a lot of improvements in the stadium and area.
The unsaid here is exactly HOW all that revenue leads to championships. Better facilities? Yes, pretty obvious. Have to assume that can draw better recruits. More money poured into recruiting? Well, that may have to wait until another coach with a larger philosophy. The unsaid, unseemly thing is that I have always felt that, in the SEC, a lot of unscrupulous boosters have taken care of the financial needs of the players, from summer jobs to more.
Here’s a no brainier to fill that 90,000 seat stadium: STUDENTS!!
It’s insane that kids have to apply for a lottery to get into maybe one game per year. The demand is there and likely higher if they have their own section in the North EZ. Super loud at that end – can you imagine?
They can opt for a paying like ~$40-50, $8/game to buy “Student season tickets”, which most do.
Almost right. Freshman and incoming transfer/graduate sudents (~30% of the students) cannot buy student season tickets. The tickets cost $60 plus a $15 “handling” fee. So 85 bucks. I agree that is still cheap.
However, I am not sure that a combination of both ideas would be bad. Raise fees by $300 and guarantee every student a seat. Still offer season tickets for students who want to sit with a group or have a fixed seat all year. Without coming out and saying it, you would have “sold” a season ticket to every student at the normal price.
Chris,
An interesting question that begs to be asked is the chicken and the egg question.
How much of the top 10 teams financial success came before or after their most recent national championship run? I believe the USA Today article listed licensing revenues (which would include merchandise depending on how it’s accounted) and I’m wondering if these revenues took off exponentially tied to the team’s success or if they had all of the revenue up front that paved the way for the success.
The way the USA article was presented, and a lot of the tenor here, is that you have to be in the $100M club to compete. It also seems that the BCS era has benefited the $EC the most, is there any comparison data from the pre-BCS? I assume Texas, Michigan, Ohio State, Penn State, Florida, Oklahoma and Nebraska have always been cash cows but what about everyone else?
This is kind of a chicken/egg scenario. Which comes first the money or the NC?? Almost all these schools won a NC before the BCS era, so they had already established a big reputation. This brought in the superior recruits and the MONEY!! Before MV we were never in the NC discussion and had just started making a name for us in football. So, while playing for a NC got us on the big stage, winning a NC would be making the statement that could generate the additional needed revenue and will definitely affect future recruiting!
Louisville has Poppa John$.
yeah and a consistently strong basketball program hasn’t hurt either. It’d be great if we had two revenue-producing sports.
Chris Like the article! So were not in the place where we’d all like to be yet,but I think all the signs point to us getting there, and having a definite plan to do so, minus the HC which seems to me the last real missing piece.
However as of the this year you are able to purchase concessions at least in Lane with credit cards. I know I did during the Spring Game. So that does show that the athletic dept is not blind to growth opportunities, it might not be as quick as we like but they are adapting.
There have been a number of posts from people saying that they had dropped their HC donations and never got so much as a phone call from VT. I don’t think any are huge donors, and I never was, but I was a Silver Hokie at one point and didn’t even get a letter after I dropped out. I’m not the only one. VT’s retention efforts are horrible. I’d be willing to bet that even the smallest donor at some of these bit-time schools will be contacted in some way if they drop out. Heck, up until a couple of years ago, I was still getting mailings from UNC to buy football tix. That just from buying away game tix a few times.
Also, I haven’t been to a game for a few years, but I didn’t know they still didn’t take cards at the concession stands. That’s ridiculous.
Does the VT Golf Course (the one on campus) still not take credit cards for greens fees? They didn’t the last time I was there. For years, you could buy merchandise with a credit card but you needed a check or cash to pay for your golf. Had to be the only golf course in the universe where you couldn’t pay with plastic.
They do now, I bought food during Spring Game with a card, this is the firs year they have though.
Wow, no kidding? That’s good to know.
VT doesn’t have the technology in place to use plastic for concessions and the Hokie Club doesn’t care if you drop out. Do you get the felling that VT takes the fans for granted?
It screams of that. I don’t think it’s 100% the case, but there’s got to be a whole lot to it.
VT should send some people to Starbucks and pick up a few free Square readers then pay the $275 for unlimited swipes.
Dear Hokie Club and VT Ticket Office,
Upgrade your technology, service your customer base, update your policies from the 1980’s, replace key staff that refuse to change … COMPETE, for heaven’s sake, like the rest of the working world.
Passionately,
Hokie Nation
Agreed!
This would make a great letter for constructive criticism…simple and to the point about how to improve.
the last two seasons when i bought cheeseburger/fries/drink on the east side the vendors identified themselves as NRV churches earning money for mission trips – usually youth mission trips. those types/sizes of organizations seldom have credit card payment systems since food services are not their primary reason for existing.
Precisely ! Most of the workers are teenagers and volunteers working to raise funds for wholesome activities. That is why I drop an extra dollar or two in their tip jar. I would much rather support their endeavors than criticize them
With products like Square any iPhone can be a credit card processor. There’s no excuse. They are leaving a lot more money on the tablet than they’d be investing in a Square and paying the fees.
I think about Clemson’s IPTAY club. I was looking at a site, and they even have 5500 Collegiate Club members (college kids). Their donation is small ($40/yr or $130 for 4 years), but the points count to their after-graduation ticket purchases. Currently they have 16,400 annual donors and 5500 college kids per this:
http://www.clemsontigers.com/ViewArticle.dbml?DB_OEM_ID=28500&ATCLID=205437273
This page says that for 2006, they had 22,000 total with giving of $14 million+
http://www.clemsontigers.com/ViewArticle.dbml?DB_OEM_ID=28500&ATCLID=205504877
I think the key is to start small, start early, and keep the momentum.
I read the posts from the angry mob stating they would drop their HC membership because of bad playcalling etc. would a phone call from Lou Merritt really make you smack your noggin and say “yeah Baby! I’m in”
I don’t think so
May 10, 2013 • 9:29 AM
I read the posts from the angry mob stating they would drop their HC membership because of bad playcalling etc. would a phone call from Lou Merritt really make you smack your noggin and say ”yeah Baby! I’m in”
I don’t think so
Count me as one of those people…Hokie Champion with 4 club seats, so I was spending about $15K a year ….not so much as a phone call to find out why or if there was an oversight…nothing.
This was supposed to be in response to Reestuart’s post….guess this feature doesn’t work either