Only Common Sense will tell you that the University of Memphis needs an On Campus Stadium. Anyone who tells you anything different has an agenda contrary to overall health of the Tigers athletic programs.
The truth of the matter is (and the study will show) that the University will be able to pay for it without public funding. An OCS will enhance the overall health of our football program. I’ve heard the following questions and I’ll address them as best I can. If I can’t give you an answer then I’ll talk to someone who can answer it appropriately.
1. There isn’t room for an OCS. Wrong, the early information released showed there are 6 possible sites for an OCS that are quite doable.
2. The school can’t afford it. This is the one that always gets my goat. They released some information that says there is a possible $14 million in revenue for the school annually. Between parking, PSL’s and other revenue avenues (sorry I couldn’t resist) that will not only have this stadium paid for within 10 years or so. After that the income from the OCS will double the amount raised by the TSF in its best years.
3. Why should the Tigers get an on campus stadium because they’ve never been that good. This might be the dumbest anti-stadium argument I’ve ever heard. This stadium will enhance the football program’s image. It will help recruiting which helps build a stronger program. Of course, 4 bowl games in 5 years is a pretty good resume in my opinion. Ask yourself this question, just what has an OCS done for Louisville after they made this commitment a few years ago? Oh, and they opened it the season after a 1 win year.
4. Where’s the money for this stadium going to come from? I think I’ve kinda sorta answered this question but I’ll address it specifically. Personal Seat Licenses, ticket revenues, parking fees, concessions, and multiple other revenues that playing in your own stadium generates. Hypothetically, let’s say the Liberty Bowl sells 10,000 large sodas at any given game. That’s $40,000. Subtract the cost of the sodas at $1,000 max and voila, a $39,000 profit. Soda is one of the highest profit margins, which is why I used it. You carry that out over a 7 game home schedule and you’re looking at $273,000 of profit. Then you’ve got naming rights, other concessions, probably $100,000 per game (10,000 cars at an average of $10) in parking fees and even licensing of vendors will generate income. As it stands now the Tigers pay for a place to play without getting anything significant back in the revenues generated from the games.
These are just 4 questions people are asked me directly. If you have a concern or question, I’ll get the answer for you if I don’t know it. I believe that an on-campus stadium will do wonders for our school. It will get alumni back on campus and that can only help increase donations for things other than sports. I could go on and on. But now is the time to stand up and support this move for the long-tem health of our football and athletic programs.
in Tiger fans
Responses to “OCS leads to the Tigers OCS”
March 7th, 2008 at 2:37 pm
No offense, but you clearly weren’t an economics major. A 40,000 seat stadium of any count is going to cost at least $100-$125 million. The debt structure alone would exceed the 10 years you believe it would take to pay for the stadium.
The profits you believe that can be generated from concessions is so unrealistic, well, I’m going to stop here and let you do some research.
March 7th, 2008 at 4:12 pm
What is so difficult? The soda number which is one soda for every 10 people (that’s low and generous)is a fair number. I based the overhead and such from experience. It costs convience stores about two cents on a dollar for ever soda sold. You figure you buy both cups and soda in bulk that drives down the overhead even more. So I think I’m being generous there too as I went with 4.5 cents on a dollar.
If you figure a 40,000 seat stadium you’re talking 1 car for every 4 people so that’s where the 10,000 cars parked number comes into the equation. That number might even be low. I would venture to make in 1 car for every 3 people but I wanted to be liberal with the numbers.
The $14,000,000 a year mark comes directly from the study. Although it is an estimate I used because if memory serves me correct it said in excess of $14 million.
I will admit it would probably take more than 10 years to pay it off. But with that said, given the naming rights and other revenue routes it is possible to pay for a $120,000,000 stadium in 10 years even if you pay 10% interest. Naming rights for 5 years should garner at least $5 million possibly more. So in that 10 year period you would expect $10 million in naming rights alone.
I didn’t detail some other revenue stats that would be big dollars. For instance, you charge a $10 per ticket fee on the premium seats and $5 on the other for the time it takes to pay off the stadium. So let’s say we average 30,000 a game. Again, a low number by the way. Given the history of season ticket sales doulbling at most new OCS. Let’s say 10,000 of that are premium and 20,000 are general tickets. That’s 70,000 x $10 for a total of $700,000 directly going to paying off the stadium. 140,000 x $5 would generate another $700,000 to the payoff annually. So you see naming rights and PSL’s will bring in some $2.4 annually. Again, low estimate on my part.
Concessions are major money makers for stadiums. And the school will be able to license out concessions and get a cut of the profits that will bring in money. That’s money right now we don’t see. As far as upkeep, it would cost us less to do upkeep on the stadium that what we pay the LB in rent every year. Which means we’ll make more while spending less annually. Hmm, sounds like good idea to me.
This is the best thing we can do for the football program. There is a reason 90+% of all D-1A schools have on campus stadiums. And it is primarily because of how it reconnects the alumni with the school.
We rent from the city now and the city mandates what we can and can’t do at the LB. Remember the fight we had when we wanted to put the logo on the field for a nationally televised game? But it comes down to one simple premise, it is better to own your own place than to rent one. And at the worst, it will be paid for in 20 years then we’ll really see the money come in every year.
March 7th, 2008 at 7:51 pm
any OCS facility will not be financed over 10 years. Even if it is financed over 20 years, and can only pull in $10M/year in net revenue, that will still allow bulk of principal and interest to be paid out of net revenue. And that isn’t counting one time capital fund raising.
currently, I believe the city takes the first $50K in concession revenue per game at the Liberty Bowl, then The University gets 25-50% of the cut above $50K. They get essentially nothing from parking revenue (actually probably lose money considering they have to pay for the spots in the Armory lot for the TSF donors). The University pays in excess of $400K in rent per year to play in the Liberty Bowl, but has no control over crowd management, concession management, etc.
It’s a no brainer.
March 7th, 2008 at 8:36 pm
Hey John,
I have one question that I haven’t heard anyone ask: Who paid for the stadiums on all of the other state university campuses, not only in TN but in other states? I belive that answer is that the states paid for the original stadiums and even funded major upgrades over the years. Where is the stadium that the state of TN owes the U of M? I beieve that the state should fund a basic stadium on our campus. If we want to pay for some bells and whistles, then we should raise the money to pay for them. I think an on-campus stadium would be good for our football program and for our university. I believe a bad pattern is happening at the U of M…….our alumni are sending their kids to UT, MTSU, TN Tech or Ole Miss instead of sending them to the U of M. I believe that an OCS will help keep many of these legacy students in Memphis. Another important factor for keeeping students in Memphis is to provide good on-campus or near-campus student housing. This issue is beginning to be addressed by the new developments on Highland Ave.
March 7th, 2008 at 11:44 pm
Hey guys,
I agree that we need this stadium in the worst way. I also think that we need to get out of the Tennessee Board of Regents asap. That way we do not have to run everything by them before we make a decision……east/middle Tennessee do not consider us a part of the state anyways, so why should we give them the ability to control what we do?
March 9th, 2008 at 7:32 am
Mr. Lewallen makes some very good points but the U of M’s lack of strong visionary leadership to take on legislators and the BOR is the main reason his first point will never happen. MTSU, TN Tech, Tenn ST and APSU stadiums were built over 50 years ago. ETSU’s Memorial Center Mini-dome was completed in 1977 for $8.3MM and is no longer used for football.
As far as losing legacy students……..in a free-market ecomony, consumers send the loudest messages with their spending habits. Let’s just leave it at that.
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