USF Scheduling Philosophy and TSA Lease

[BullyPulpit]

With all of the talk and excitement (and, if you are a petty, salty little b*tch to the east, controversy) surrounding USF's future football scheduling, I think it is important to put the new scheduling philosophy into context given the realities of our lease/stadium situation. Our lease with the Tampa Sports Authority, which went into effect for the 2017 season and runs through the 2027 season (6 years with a 5 year option), states that USF will play at least 6 home games per season at Raymond James. USF only has to pay the direct cost of game day expenses. For games where just the lower bowl is open, that runs about $200,000 per game, and I would imagine that games with the upper deck open adds another $50,000 per deck in direct expenses ($300,000 max in direct expenses).  

For the first 6 games, USF gets to keep all of the money generated from ticket sales (minus the lesser of 8% of the ticket price or $2.50 per ticket). For a seventh game, USF would only get 20% of net revenues after all direct expenses and licensing fees are paid by TSA. So it would appear that there is even less of a financial incentive for USF to host 7 home games in a season. USF doesn't generate any revenue from concession sales or parking, other than the parking spaces they are allocated for donors.

Average attendance in 2017 was 31,400, and 2018 climbed to 38,500. Included in these numbers are non-revenue seats (students and comps), so USF probably averaged around 28,000 in actual ticket sales over the last two seasons. Assuming an average ticket cost of around $32.50, USF would generate $910,000 per game in total revenue from ticket sales. From that, they pay TSA about $200,000 for use of the stadium, and another $70,000 or so for the ticket surcharge, leaving an average net revenue of $640,000. Then you have to factor in the cost of the guarantee for the FCS opponents. That runs around $400,000 to $500,000. If USF is paying that out, then they are clearing about $200,000 from those FCS home games. Typically, against a G5 or P5 program they pay out $250,000 to cover travel costs, so for those games the net is around $400,000. In an average 6 home game season, USF likely generates around $2.2 million TOTAL for the season in net revenues from ticket sales. 

Given the terms of the lease, it makes more sense for USF to take a road "pay-day-game" over a 6th or 7th home game against an FCS foe or a lower-tier P5 program. For instance, the Alabama game in 2026 will pay USF $1 million. After deducting the $250,000 in travel expenses, the program will still net around $750,000. USF couldn't clear that much money even if it sold out the entire lower bowl, which we aren't able to do right now against lesser competition. The $1.9 million we are getting paid by Texas for the 2020 game is even more significant. Without a hefty ticket price increase, it would be IMPOSSIBLE for us to net $1,650,000 from any home game. Subtracting 12,500 student seats from Raymond James' capacity of roughly 66,000, leaves only 53,500 revenue generating tickets. The most we could net in that situation would be $1,350,000 or so.  Assuming a sell-out against Florida and Alabama, those games will net us almost $1,000,000 more per game than we have been averaging over the past two seasons. That is without consideration to the increased revenues received by requiring the purchase of mini-game plans or season tickets in order to secure tickets for those marquee games. 
 

[Brad]

This is why I keep coming back to The Bulls Pen.  

I can’t cross check that data, but the analysis makes sense to me.

[TakeItOrLeavitt]

Great break down Bully!

[BullyPulpit]

Just now, Brad said:

This is why I keep coming back to The Bulls Pen.  

I can’t cross check that data, but the analysis makes sense to me.

I did the best I could to cross-check the numbers with what was widely reported on January 27, 2017. Unfortunately, the Tampa Bay Times no longer has a good link to the actual lease agreement, so I was forced to rely on what was publicly reported about the deal. The numbers for the attendance came from news reports following the respective seasons and took into consideration between 6,500 and 8,000 student tickets per game. I think the math is sound overall, but I am more than willing to edit things if someone has data to the contrary. 

[NewEnglandBull]

Excellent post...makes perfect economic sense.

[BullyPulpit]

The larger point of my post is to provide perspective. UCF needs to schedule 7 home games a season to cover the debt service on their rusty, crap-hole, at least for the next 19 years. They would actually lose money if they took a payday game, as they generate more than $750,000 in net revenues from their average home game. The cost of the debt service on their initial 30 year bonds is $4 million annually (Those bonds will be paid off in about 18 years). The total cost for us to "rent" Ray Jay per year averages out to around $1,600,000 (assuming we don't open the upper deck). That is our "all-in" cost. UCF still has to pay for staff, security, EMS, upkeep, utilities, insurance, etc. They are able to cover that, but that requires the revenue generated by parking and concessions. In 2037, things will change dramatically. They will be in a much better position than we currently are, as they will essentially own their crappy stadium and will be generating an extra $4 million in revenue by the simple fact that they won't have any more debt to service (assuming they don't incur any more stadium construction related debt). The issue for USF is that the debt service on the type of stadium they were proposing a year and a half ago would be about 4 times what UCF's currently is. I don't know how the program will be able to service a $16 million debt, but I brought that up in another post not too long ago and won't bore anyone else with those thoughts/details here. 

[CousinRicky]

2 hours ago, BullyPulpit said:

The larger point of my post is to provide perspective. UCF needs to schedule 7 home games a season to cover the debt service on their rusty, crap-hole, at least for the next 19 years. They would actually lose money if they took a payday game, as they generate more than $750,000 in net revenues from their average home game. The cost of the debt service on their initial 30 year bonds is $4 million annually (Those bonds will be paid off in about 18 years). The total cost for us to "rent" Ray Jay per year averages out to around $1,600,000 (assuming we don't open the upper deck). That is our "all-in" cost. UCF still has to pay for staff, security, EMS, upkeep, utilities, insurance, etc. They are able to cover that, but that requires the revenue generated by parking and concessions. In 2037, things will change dramatically. They will be in a much better position than we currently are, as they will essentially own their crappy stadium and will be generating an extra $4 million in revenue by the simple fact that they won't have any more debt to service (assuming they don't incur any more stadium construction related debt). The issue for USF is that the debt service on the type of stadium they were proposing a year and a half ago would be about 4 times what UCF's currently is. I don't know how the program will be able to service a $16 million debt, but I brought that up in another post not too long ago and won't bore anyone else with those thoughts/details here. 

But who knows how much money UCF will have to put into that place in those 18 years.  

[BullyPulpit]

4 minutes ago, CousinRicky said:

But who knows how much money UCF will have to put into that place in those 18 years.  

It could be substantial. I accounted for about half a million a year, but it could be more. If course, they are planning possible further expansion, because they are never going to lose again, so it makes sense! 

[BullyPulpit]

I should have noted that we will profit $1,000,000 over the 3 game series with Louisville as well. 

[JTrue]

3 hours ago, BullyPulpit said:

The larger point of my post is to provide perspective. UCF needs to schedule 7 home games a season to cover the debt service on their rusty, crap-hole, at least for the next 19 years. They would actually lose money if they took a payday game, as they generate more than $750,000 in net revenues from their average home game. The cost of the debt service on their initial 30 year bonds is $4 million annually (Those bonds will be paid off in about 18 years). The total cost for us to "rent" Ray Jay per year averages out to around $1,600,000 (assuming we don't open the upper deck). That is our "all-in" cost. UCF still has to pay for staff, security, EMS, upkeep, utilities, insurance, etc. They are able to cover that, but that requires the revenue generated by parking and concessions. In 2037, things will change dramatically. They will be in a much better position than we currently are, as they will essentially own their crappy stadium and will be generating an extra $4 million in revenue by the simple fact that they won't have any more debt to service (assuming they don't incur any more stadium construction related debt). The issue for USF is that the debt service on the type of stadium they were proposing a year and a half ago would be about 4 times what UCF's currently is. I don't know how the program will be able to service a $16 million debt, but I brought that up in another post not too long ago and won't bore anyone else with those thoughts/details here. 

Here's my plan...we build an OCS, go all in, 50k seats, luxury boxes, scoreboards, the whole nine...then, strategic default. Let the bank take that **** over. They're going to have to rent it out to make back their money and we pit RJS and the new OCS against each other. We can rent our own OCS for the same price we're paying at RJS. Boom! 

You're welcome, Kelly.