Small numbers, big impact: BSU hockey attendance makes substantial difference in revenues
Part one of a two-part series examining the financial impact of the Bemidji State men's hockey program. Read part two here.
BEMIDJI – When the Bemidji State men’s hockey team joined the Western Collegiate Hockey Association in 2010, expectations were high.
Membership in a premier conference would pit the Beavers against the best teams in college hockey, offering a bruising schedule, an opportunity to generate more revenue and bringing prestige to the university.
The newly opened Sanford Center and the promise of meaningful conference games against foes Minnesota, Minnesota-Duluth, North Dakota and Wisconsin appeared an indication the Beaver hockey team would help pay for itself and perhaps help the rest of BSU’s Division II sports.
“The success of our hockey program and the revenue that’s brought in will help our Division II sports and that has been the plan,” Athletic Director Rick Goeb told the Pioneer in July 2009.
But things can change drastically in three years.
After breaking even in the first season at the Sanford Center – which coincided with BSU’s first season in the WCHA – the men’s hockey program needed more than $250,000 from the university to remain afloat last season, and school officials are projecting a greater sum of money when the books are closed on the 2012-13 season.
Season ticket sales, since the 2010-11 season, have steadily decreased – plummeting more than 26 percent in less than three years – and revenue has declined as a result.
That’s going to be an issue going forward.
In a letter to BSU athletics staff two weeks ago, BSU President Richard Hanson said “the university will no longer be in a position to increase its subsidies of athletics to cover revenue shortfalls.”
All of BSU’s sports are looking for funding, but it’s hockey – the school’s only Division I sport – that is most visible.
As a result, Hanson said the university will replace Goeb, who will be terminated at the end of the 2012-13 school year.
Hanson’s letter, sent after the university conducted a thorough review of its athletics budgets, gave a clear message: The BSU athletics department needs to raise more money for itself.
That message encompasses the entire athletics department, in all sports, said BSU director of marketing and communications Scott Faust. But Faust acknowledged the hockey program is the most prominent sport at BSU as its only Division I sport.
“While hockey ticket sales are important, our plans to strengthen our funding for the athletic department don’t rest on hockey,” Faust said. “It’s also reliant on fundraising, ticket sales and marketing across all sports. It’s all of the above.
“But it’s true that hockey is our biggest revenue generator and our biggest expense.”
That’s why, when the hockey program needed a cash infusion to break even, it was eye-opening for BSU officials.
Last year, BSU provided $262,380 in institutional support – money coming from student tuition and state funding – to support men’s hockey. This year, BSU projects it will spend nearly $289,592 in institutional support to balance the program’s books.
The women’s program, which BSU doesn’t expect to generate large sums of revenue, has needed even more help balancing its budget. Last season, the school spent $878,428 on the Beaver women’s team. This season the school’s budget projects slightly less money going to the women’s team: $864,150.
“It’s not realistic to expect that women’s hockey will have the same amount of (fan) support as men’s hockey,” Faust said. “But it’s also an important part of our Division I hockey program.”
Currently, men’s hockey season ticket holders also receive entry into the women’s games. After season and comp tickets are accounted for, the women have drawn, on average 68 paying spectators this season, according to the most recent numbers provided by BSU. The women’s team is expected to generate a projected $10,000 in ticket sales revenue this year.
The challenge for university officials is determining why revenue is going down and how to reverse the trend.
“It’s remarkable to have Division I hockey in the Sanford Center,” Faust said. “It’s a great thing for this region. And we’re very determined and optimistic about restoring those revenue figures to where they were in the first year of the Sanford Center.”
Revenue goes down
According to budget information obtained by the Pioneer, the men’s hockey program generated $717,202 in ticket sales during the 2010-11 season, the Beavers’ first in the Sanford Center.
That was a major upgrade from previous years, when BSU played at the tiny but beloved John Glas Fieldhouse on campus.
In 2009-10 – the final season in the Glas – the Beavers made $188,890 in ticket revenue. That was the year after their Frozen Four appearance, and BSU averaged 2,303 fans per game, according to NCAA attendance figures – just about at the arena’s capacity of 2,399.
“We were doing about the best we could do at the John Glas,” said Bill Maki, BSU’s vice president of finance and administration. “(Moving to the Sanford Center is) a good tradeoff, for a higher-quality facility that we don’t have to maintain on campus.”
Indeed, with the Sanford Center nearly doubling potential for attendance, ticket sales revenue increased for 2011-12 (to $717,202), as did attendance.
Last season, 62,011 people watched 16 BSU men’s hockey games at the Sanford Center – an average of 3,876 per game.
But the Sanford Center also means additional costs to BSU, which has a 20-year lease for the arena.
The lease calls for a 3 percent increase in base rent each year. This year, BSU’s base rent is $201,571, less than half of the university’s expense for using the arena.
According to Maki, costs beyond rent include approximately $5,000-$6,000 per game for expenses such as staffing, public safety and reserved parking. That number varies due to projected attendance, Maki said.
Overall, BSU is expected to pay about $488,750 to use the Sanford Center this season for both men’s and women’s games, compared to $474,675 last year and $428,363 in the 2010-11 season.
And while BSU keeps 100 percent of revenue from ticket sales, the Sanford Center keeps the profits for like concessions, parking and auxiliary items.
BSU not alone
For the 2011-12 season, BSU men’s hockey brought in $626,998 worth of ticket revenue. This season, officials project the number will dip to $550,000.
But other college hockey programs are struggling to draw fans.
For instance, the Wisconsin State Journal reported Friday that WCHA member Wisconsin is struggling to draw fans despite winning a national title as recently as 2006. The newspaper estimated that the Badgers’ attendance is down by more than 4,000 – which represents a hit of about $2 million.
WCHA commissioner Bruce McLeod said it isn’t uncommon for schools to be losing attendance and money – particularly in tougher economic times. But schools like Bemidji State have a smaller margin for error.
“In a place like Bemidji, the numbers dropping just a little bit can have a substantial impact,” McLeod said, noting other WCHA programs face similar problems.
At BSU, an attendance drop at games makes a significant impact on the budget: an average of 3,876 fans attended games in 2010-11, while there were 3,521 spectators per game last season. Through six games this season, the number has dropped to 2,935, but BSU officials expect average attendance to rebound after the holidays.
“We know that single-game tickets sell better in the second half of the season, when better teams come in and the hunting seasons aren’t in full force,” Maki said.
Perennial powerhouse Denver comes in Friday and Saturday, while dates against in-state foes Minnesota, St. Cloud State and Minnesota-Duluth are all scheduled after Jan. 1.
But, Maki said, base revenue – season ticket sales – will be down.
“That’s a certainty,” he said.
According to Faust, BSU sold 1,355 season tickets for 2012-13 – a drop-off of 262 from 2011-12. This year is a drop of nearly 500 season tickets – a decline of more than 26 percent – from the 2010-11 campaign, when there were 1,841 season ticket holders.
For BSU athletic officials, increasing ticket sales and revenue for next season and beyond is a major challenge.
There are several possible solutions, but it won’t get any easier – the WCHA is changing next year, adding five new programs while losing national powerhouses like Minnesota, North Dakota and Wisconsin.