One of the most significant challenges facing Division 1 college athletics has to do with the revenue from its two largest sources: tickets sales and broadcasting rights. Before I begin this discussion, several points of clarification must be made. First, it must be clearly understood that not all Division 1 athletic departments generate positive net revenue. Even in the Power 5 Conference (i.e. ACC; B1G; Big XII; Pac-12; SEC), only about 24 out of 66 athletic departments generate positive net revenue [NCAA Revenues]. This conversation will exclusively focus on Power 5 institutions (note: Notre Dame is included in this number, even though they are football independent).
Secondly, for the purposes of this conversation, I am including the “preferred seating program” and ticket sales under the same auspices. Many of the Power 5 athletic departments have adopted the professional model when it comes to season tickets, wherein the customer, in addition to purchasing season tickets, must also buy into some kind of preferred seating “contribution” (or “license” as is the case with professional sports). Buying into such a program offers the fan better seats at the stadium. These contributions are a significant revenue stream for athletic departments, generating upwards of $20 to $30 million.
With that covered, consider these two questions. Let’s say that you are a fan of a college football team. (1) Would you rather watch the game from the comfort of your house or watch the game from the stands at the stadium? (2) How do you feel about your Power 5 team playing schools from (what most call) the Group of 5 Conferences (e.g. C-USA; MAC; MW; Sun Belt; WAC)?
These seemingly simple questions have several significant implications. College athletic departments rely heavily on the revenue from both ticket sales and broadcasting rights for financial stability. Fans and supporters are having to decide whether or not to brave the elements, parking and people traffic to watch the game from the stadium or to enjoy the game from the comfort of their home. For many, this is an easy question because let’s face it, being at home (or sports bar) does have some perks, such as lower cost, climate control, private restrooms, and of course the ability to watch multiple games.
For the college football traditionalist however, nothing can replace the game day experience of tailgating and being inside the stadium. While watching from the comfort of one’s home or the bar will always be the option of choice for many people, especially those living far away from their favorite team, convincing a new generation to buy season tickets is a daunting challenge. Millennials are typically as people currently between the ages of 18-34 (born between 1980-1996) and known as the generation that won’t spend [Deloitte], which is a bit of a misnomer because they will spend money to create memories [Eventbrite].
Millennials comprise an increasingly larger subset of college football fans, and therefore athletic departments are targeting this group for season ticket sales more and more. The problem is, the millennial generation have been shown to not want to attend live sporting events because: (1) Tickets are too expensive; (2) Games are about four hours; (3) It’s easier to games at home; and (4) Kickoff times are typically announced two weeks prior to the game [SportsDay]. The real question then becomes: how do athletic departments entice this generation to want to support their teams by purchasing tickets to attend the games? We will come back to this question in a moment.
As previously noted, the other major revenue stream besides ticket sales for these athlete departments is broadcasting rights. Typically, these rights are negotiated with the conference office, and each member institution receives an annual portion of these rights (the exception here being Notre Dame, which negotiates their rights individually to broadcast football games on NBC). Earlier, I asked the question: “How do you feel about your Power 5 team playing schools from (what most call) the Group of 5 Conferences (e.g. C-USA; MAC; MW; Sun Belt; WAC)?” This is an important question when it comes to broadcasting rights; let’s face it, fans want to see juggernaut programs play one another. Fans don’t want to see teams like Alabama play a team like the Citadel (no offense to the Citadel). The reason media companies are willing to sign multi-billion dollar deals is to ensure their networks get the best games, which will attract the most eyeballs.
This brings us to the point of this discussion. Having a schedule of games against quality opponents is a great asset that helps athletic departments sell broadcasting rights, but inherently it is a double-edged sword. With games so easily accessible and convenient for fans and supporters, how do athletic departments entice fans (specifically millennials) to want to support their teams by purchasing tickets to attend games?
The answer to this question, in my opinion, is a bit simplistic in nature. But departments need to make coming to their venue and attending games an experience. Millennials are craving experiences [Eventbrite]. For example, when families go to Disney World year after year, they go not only for the attractions but for the entire experience. There has got to be something beyond the game that attracts fans and supporters’ game after game that they can’t experience from home or at a sports bar. It is going to take problem solvers to dive into this and create such an experience. Athletic departments are going to need to do this sooner rather than later as the millennials continue their take over. Some departments are taking a leading role in addressing the overall fan experience while others are lag further behind.
Here are several questions (some may be obvious) that can ultimately guide strategy around this:
- Is the wi-fi and/or cellular services inside the stadium during game days, adequate to support the number of fans that will be in attendance to use their social media platforms?
- Is the stadium conducive for families, even those with small children?
- Is the department making it easier for fans to tailgate with one another?
- If the department addresses potential security concerns, can we allow fans that exit the stadium to return?
- What is unique about this venue that differentiates itself from our other competitors?