Is Black and Gold the new green?

eric-maynorWhen VCU plays UCLA tonight in Philadelphia, fans, the announcers will gush about scholar athletes, pure heart and the integrity of the sport.

But the Big Dance is big business. And for a school such as VCU, which has no football team, it can be a way to market to a national audience and increase revenue.

Although it’s hard to follow the money in college sports – in part because schools have several budgets to divvy up the expenses and revenue – schools get money from the conferences for tournament performance. VCU athletic department representatives couldn’t be reached to explain what share they received. (All but one of the 80 administrative staff members have left for Philadelphia for the game.)

According to budget figures from the athletic department, in 2007 the school received (non-program specific) $399,402 from conference and NCAA revenue sharing. The following season after going two rounds in the NCAA tournament they received $611,651.

Plus, donations are greater when the team wins, according to sources familiar with the business of college sports. That means it’s easier for fund-raisers to convince donors that a new arena or building is just what they ought to do.

It also makes the coaching staff a more valuable asset, and coaches can cash in with higher salaries. The season after  the Rams’ 2007  tournament run, men’s basketball coaches’ salaries and benefits more than doubled – from $623,883 to $1.3 million.

Winning against a big-name team like Duke isn’t bad for the box office, either. Ticket sales experienced a 6.5 percent bump in 2008, for a total of $404,992. Sales of VCU merchandise, meanwhile, jumped that March by 188 percent to $90,000 from the same month a year before, according to figures provided by VCU.

When Eric Maynor leads the charge tonight, he will be helping VCU earn money for the Colonial Athletic Conference; $206,000 for each game they play.

Half of the money from the NCAA’s lucrative $6 billion TV licensing deal with CBS is distributed to conferences based on the number of games member schools have played in the tournament during the preceding six years. That adds up to $2.67 million for the CAA’s 13 appearances. The number of appearances this year will be factored into next year’s payout.

The money is distributed to athletic departments of all 12 teams in the conference based on a formula that weights the award amount to the schools that made the most appearances, according to spokesman for the CAA. Commissioner Thomas Yeager was unable to respond by BizSense’s publication deadline to explain the formula.

To see how a good showing in the NCAA Tournament can affect the business side of a university, look at George Mason.

Last year, Robert Baker, director of GMU’s Center for Sport Management, wrote an article for the Sports Business Journal about the economic impact of their Final Four run. According to the article, the team set conference attendance records for home games for two seasons in a row afterward. Bookstore sales of GMU merchandise in March 2006 were $800,000, which was 28 percent more than March sales for the last two years combined. Fundraising rose 20 percent to $23.5 million. Applications increased 10 percent the following year.

For the Rams, beating Duke in the first round of the 2007 NCAA tournament wasn’t quite enough to affect VCU’s enrollment figures, according to admissions director Carol Sesnowitz.

“It was certainly good in terms of recognition,” Sesnowitz said. “But whether we got a bump from going to the second round, I don’t know if we experienced anything like that.”

“Maybe if we beat UCLA and then do well the next round.”

Al Harris will be rooting on VCU tonight. He is an alum of the journalism program. Please send story tips to [email protected]

eric-maynorWhen VCU plays UCLA tonight in Philadelphia, fans, the announcers will gush about scholar athletes, pure heart and the integrity of the sport.

But the Big Dance is big business. And for a school such as VCU, which has no football team, it can be a way to market to a national audience and increase revenue.

Although it’s hard to follow the money in college sports – in part because schools have several budgets to divvy up the expenses and revenue – schools get money from the conferences for tournament performance. VCU athletic department representatives couldn’t be reached to explain what share they received. (All but one of the 80 administrative staff members have left for Philadelphia for the game.)

According to budget figures from the athletic department, in 2007 the school received (non-program specific) $399,402 from conference and NCAA revenue sharing. The following season after going two rounds in the NCAA tournament they received $611,651.

Plus, donations are greater when the team wins, according to sources familiar with the business of college sports. That means it’s easier for fund-raisers to convince donors that a new arena or building is just what they ought to do.

It also makes the coaching staff a more valuable asset, and coaches can cash in with higher salaries. The season after  the Rams’ 2007  tournament run, men’s basketball coaches’ salaries and benefits more than doubled – from $623,883 to $1.3 million.

Winning against a big-name team like Duke isn’t bad for the box office, either. Ticket sales experienced a 6.5 percent bump in 2008, for a total of $404,992. Sales of VCU merchandise, meanwhile, jumped that March by 188 percent to $90,000 from the same month a year before, according to figures provided by VCU.

When Eric Maynor leads the charge tonight, he will be helping VCU earn money for the Colonial Athletic Conference; $206,000 for each game they play.

Half of the money from the NCAA’s lucrative $6 billion TV licensing deal with CBS is distributed to conferences based on the number of games member schools have played in the tournament during the preceding six years. That adds up to $2.67 million for the CAA’s 13 appearances. The number of appearances this year will be factored into next year’s payout.

The money is distributed to athletic departments of all 12 teams in the conference based on a formula that weights the award amount to the schools that made the most appearances, according to spokesman for the CAA. Commissioner Thomas Yeager was unable to respond by BizSense’s publication deadline to explain the formula.

To see how a good showing in the NCAA Tournament can affect the business side of a university, look at George Mason.

Last year, Robert Baker, director of GMU’s Center for Sport Management, wrote an article for the Sports Business Journal about the economic impact of their Final Four run. According to the article, the team set conference attendance records for home games for two seasons in a row afterward. Bookstore sales of GMU merchandise in March 2006 were $800,000, which was 28 percent more than March sales for the last two years combined. Fundraising rose 20 percent to $23.5 million. Applications increased 10 percent the following year.

For the Rams, beating Duke in the first round of the 2007 NCAA tournament wasn’t quite enough to affect VCU’s enrollment figures, according to admissions director Carol Sesnowitz.

“It was certainly good in terms of recognition,” Sesnowitz said. “But whether we got a bump from going to the second round, I don’t know if we experienced anything like that.”

“Maybe if we beat UCLA and then do well the next round.”

Al Harris will be rooting on VCU tonight. He is an alum of the journalism program. Please send story tips to [email protected]

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Mike Ogilvie
Mike Ogilvie
13 years ago

It’s interesting to see the figures that go into the equation of sports profitability. I’ve heard over and over again how successful college sports programs (headlining ones anyway) can become cash generators. Surprisingly, however, you don’t even touch on an estimate for a bottom-line number (a requirement I think if you’re going to look at the game through business spectacles). Ticket sales, shares of ad revenue, tournament pay-outs, and increased bookstore sales don’t mean anything if the expense of running the program costs twice as much. (For example, the increased coaches’ salaries you mentioned.) As the team gets more and… Read more »