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Penn State's poor support for a P5 basketball program

UncleLar, this looks a lot like the +/- chart!!! :slight_smile: :slight_smile:

To the other thread where we talked about investment need to be competitive, We clearly need at least another $1.5M to attract a middle-of-the-conference coach. That’s a lot of (incrementally lousy) seats at the BJC to fill!!!

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With no guarantee of a long-term payoff.

Basically, a high-risk, low-reward move for an athletic department consumed with operating without university funds and (I think still) paying off a lot of NCAA sanction debt.

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So what you’re saying is, basketball needs its own version of Terry Pegula? Okay gimme 40 years, I’ll see what I can do (and this is actually something I would like to be able to do).

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I don’t think it’s high risk, nor do I think it’s low reward.

You’re talking an increased investment of 1-1.5 mill per year that could next you an extra 4-8 million if you’re good (going off B1G estimates of bball revenue at peer schools). It’s not just about filling BJC seats, it’s about tournament revenue sharing, increased sponsorship opportunities and more simulcast networks in the northeast for PSU sports just to name a few. You’re risking essentially <20% of AD profits (not expenditures, just pure profit) to potentially pay off 3-8x your incremental investment increase.

It’s rare nowadays to have that type of alpha if you get the hire right.

Tournament revenue sharing isn’t going to increase, so you can eliminate that one.

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Not necessarily true, as PSU can contribute in theory to a deeper run in the tournament if they are better, thereby giving the B1G a chance to earn extra TV “units” which makes out a sizable chunk of NCAA tournament payouts.

In theory, PSU can do this not necessarily at the expense of another B1G team. But again, that doesn’t take away from the over-arching point that we’re talking about a <20% investment in profit to potentially earn 3-8x your investment by just getting closer to our peers in the conference in terms of bball revenue.

Naming a few more here, if you’re good, you can require donation levels for good season tickets, in addition to ticket prices naturally inflating due to demand. More merchandise sales will never hurt too.

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And before Lar goes too into the weeds, the tournament payout structure isn’t really the main reason you go for it. The increased ad sales, ticket sales and merchandising opportunities is where the big money is. The tournament revenue is more a potential projection if the B1G has another good team in it. It’s more a nice byproduct of actually having a good bball program.

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In theory, yes. In reality, not at all likely.

I’ll take a shot at your other argument.

Here’s the revenue/expense numbers for the B10 schools.

MEN’S BASKETBALL REVENUE

  1. Indiana $23,469,814
  2. Wisconsin $22,808,750
  3. Michigan State $21,578,892
  4. Ohio State $19,875,741
  5. Maryland $17,144,695
  6. Michigan $16,776,377
  7. Illinois $16,671,800
  8. Northwestern $14,140,342*
  9. Minnesota $12,646,848
  10. Penn State $11,236,482
  11. Nebraska $10,507,728
  12. Purdue $10,402,674
  13. Iowa $9,397,984
  14. Rutgers $5,477,971

MEN’S BASKETBALL EXPENSES

  1. Michigan State $14,371,905
  2. Indiana $12,272,275
  3. Wisconsin $9,834,447
  4. Ohio State $9,558,478
  5. Michigan $8,920,109
  6. Minnesota $8,204,513
  7. Northwestern $7,668,723*
  8. Maryland $7,622,707
  9. Iowa $7,518,540
  10. Nebraska $7,395,847
  11. Illinois $7,321,390
  12. Purdue $7,270,643
  13. Rutgers $6,147,089
  14. Penn State $5,813,915

So you think PSU can increase their expenses by just $1-1.5 M per year and that will generate $4-8M in revenues (earn like Illinois, Maryland, Michigan, or Ohio State)?

Also, not very likely (Illinois does it somehow but we’re more like Ohio State and Michigan and they spend a lot more)

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Maybe not consistently, but on really good years, I bet we could. And I’d argue that the profit margin would not shrink all that much if the product on the floor is much better.

I actually worked in polling at one point so yes I completely agree.

Where is all this money going if it seems the dept is making money…

The only way you can generate numbers that high is by doing it consistently. A good year every now and then isn’t going to suddenly result in multi-millions showing up on the bottom line. You have to grow all the bases. You don’t get to jack up advertising dollars and buyers or drastically increase your media rights as the result of an occasional good season. Sustained performance is the only way to do it - and that takes years to build.

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They’re saving it for Chambers buyout! Duh! /s

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To the roughly 25 sports that don’t make money.

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I was going to cry if you said football so thank you for saving me from doing so.

Football contributes an order of magnitude more than basketball to the other sports.

The only way you can generate numbers that high is by doing it consistently. A good year every now and then isn’t going to suddenly result in multi-millions showing up on the bottom line.

I think that’s the whole point of spending more…to be consistently good. That’s why you pay 2 million for a coach. I’m not even being aggressive here and saying we can make as much as Wisconsin or Indiana, mind you…just migrate to the middle of the pack. Given the size of our alumni base and how quickly crowds flock when we’re good, I don’t think it’s unreasonable.

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True, in 2012-13 when PSU knocked off #4 Michigan and then won at Northwestern most of the lower bowl was filled for the Wisconsin finale.

Let me put it another way…we’re making 10 million in revenue because of how our TV deal is structured. That’s with a largely empty BJC, free food for students, etc. etc. And by the way, our AD is NOT in deficit right now. I’m talking about reinvesting <20% of the PROFIT the AD is turning.

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