Question of the Day: Flawed reasoning for raising UGA football ticket prices?
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Ticket price increases are to be expected on a year-to-year basis. That UGA is increasing the price of football tickets after a successful year should surprise no one. What I found questionable, however, was one of the reasons Greg McGarity stated for the increase: We only have one profitable team: the football team.
Couldn’t one question why UGA has only one profitable team, when many P5 schools show profit from any combination of men’s basketball, baseball, or even women’s basketball and gymnastics? And shouldn’t those questions lead back to Greg McGarity and the poor decisions he’s made and continues to make in regards to coaching hiring and firing, and the other day-to-day responsibilities an AD has?
Even when the Board has legitimate questions about McGarity’s decision making and lack of transparency, as Janet Frick did, they continue to act as a rubber stamp regardless. Where is the accountability? A profitable football team does not a healthy Athletic Association make. I can’t help but feel that UGA, as a state flagship university, is capable of so much more if we were guided by visionary, talented leadership.
― Matt Cafaro
OK, first off and to be fair, athletic director Greg McGarity said Tuesday that football was the only source of “significant revenue.” UGA men’s basketball, depending on the numbers, can be considered profitable. It usually makes around $1 million in ticket sales, but when you count media rights ($3.5 million per a financial report from last season), other sponsorships ($1.1 million), then you come to around the break-even point. And then the SEC distribution for the NCAA Tournament ($2 million per team last year, whether it made the NCAA Tournament or not) puts it in the black financially.
At most SEC programs not named Kentucky, it is hard to turn a profit in anything other than football. Some do manage. At LSU, for instance, men’s basketball turned a $1.6 million profit during the 2016-17 academic year, and baseball turned a profit of $569,148, according to the Baton Rouge Advocate.
We could get into whether UGA could make more money off basketball, baseball and gymnastics with better programs. Still, I think it’s fair for McGarity to say that football is “our main stream of revenue,” as he put it.
Where the fuzzy math, or perhaps reasoning, comes in is the assertion that the ticket price increase is because of football coaching salaries. Let’s just take the 58,000 season tickets, which were priced at $50 a pop last year (not including student and faculty tickets, single-game tickets, etc.). If UGA had kept that price this year, for seven home games that would have produced $20.3 million in revenue from those 58,ooo season tickets. At the new prices, Georgia will now realize $26.97 million ($17.4 million for four Tier 1 games, $9.57 million for three Tier 2 games).
Now, I completely believe that raises are in store for Kirby Smart and his staff. But will it be for a combined $6.3 million? I guess we’ll soon find out. For what it’s worth, Smart and his staff combined to earn around $12 million last season, not counting bonuses, which amounted to around $2 million.
This also assumes a program that is breaking even and wouldn’t be able to come up with the money any other way, or that cuts would have to be made to other sports. The evidence doesn’t back that up. UGA operated at a profit margin of $9.1 margin in 2015-16, according to that most recently provided financial report, and there’s been no indication revenue will decrease. The SEC payout isn’t going down. We’ll see if the recent tax-law changes impact whether people want to donate to the Hartman Fund to get those season tickets, but UGA has heard from experts saying they expect the demand from fans will remain.
And of course there’s the more than $80 million in available reserve funds, which the school says is limited by bond debt. That’s a whole other Question of the Day.
Look, there’s nothing wrong with a school, after such a successful year, raising ticket prices and saying, “We had a good year, we want to have more of them, we want to improve our facilities, we want to keep and pay our coaches, and we believe in supply and demand, so we’re increasing our ticket prices. And by the way, we’re not just going to funnel this to coaches salaries and non-revenue sports, we’re going to make it a down payment on a financial commitment to excellence on the field. Yes, you fans will be paying more, but so will we as an athletics department.”
That’s probably what I would have said if I had been in front of the board. But I’m not the athletic director, and it’s probably a good thing I’m not.