Imagine you are developing a budget for the new year for your university. Using the case study below:

- Determine the final total gross ticket revenue that you wiuld include in the proposed budget.

- Ofthis budget, how much revenue would be from season ticket sales?

For this case, you are the director of athletics at the University of Nowhere (UN). The UN Greyhounds are located in Nowheresville, Pennsylvania, and compete at the NCAA Division I level. The football team plays in a 20,000-seat stadium that was built in 1950, UN is a public institution with 15,000 undergraduate students and 3,000 graduate students for a total enrollment of 18,000. Nowheresville is a relatively small city with a population of 50,000 located about 50 miles northwest of Philadelphia. The UN Greyhound football team is very popular, primarily due to a history of on-field success. In the last 20 years, it has qualified for the playoffs six times and advanced to the championship game three times. it won the national championship in 2009 and 2017, and currently has five players in the NFL, including one of league's top running backs. Due to this success, the football team has an average attendance of 18,500 and a season ticket hoider base of 10,250 . The athletic program offers 18 sports overall-10 women's and 8 men's - but the football team is the largest revenue generator for the athlebic department. It competes in the Colonial Athletic Association along with schools Fike lames Madison, Towson University, and the University of Delaware. The athletic department has an overall operating budget of $30 million per year. On the revenue side, the athletic department generates $15 million itself with their primary sources of revenue being fundraising, ticket sales, concessions, parking. merchandise, game guarantees, and the rental of facilities. It also receives $1 million per year from conference and NCAA distributions. The remainder of the $30 million in expenses is covered through institutional support ( $12.5 millions) and student fees ( $1.5 million). Table 1 provides data on the department revenue sources as a percentage of the overall department revenues. As the director of athletics, you have been informed that the future funding from institutional support may decrease greatly in the future. This decrease in funding is largely due to a cutback in state legislature appropriations to the state's university system. Thus, all university departments, including the athletic department, are being told that financial support directly from the institution will decrease substantially over the next five years. Therefore, you must find new ways to generate revenue to make up for the loss of funding from the university. One area that you are taking a hard look at is the ability to maximize revenue from football games. Up to this point, there has been no minimum donation for the 10,250 football season tickets that are sold. At many large universities, a season ticket holder is required to make a minimum donation in addition to paying for the price of a ticket to have access to season tickets and preferred parking. This strategy allows athletic departments to generate revenue from contests beyond the price of the ticket. Usually. the size of the donation will also be a dictator of seat location with the largest donors receiving the best seats. Currently, UN season ticket holders are not required to pay a minimum donation. This has resulted in some season ticketholders who have never made a donation to the athletic department having prime seats on the 50-yard line. Meanwhile, there are season ticket holders who are donating as much as $25,000 per year who have seats at the 20-yard line. This has led to frustration amongst some of the largest donors along with an inability to maximize revenue from the football games. It is expected that if the best seats are tied to a donation that the athletic department would have the ability to generate more revenue. Tables 2 and 3 provide historical data on season ticket sales, attendance, ticket revenue, and donations, It is evident that there was an increase in interest, attendance, and revenue as a result of the on-field success in 2017 when the team won the national championship. The result was more revenue coming into the program for 2018. Given the current financial environment across UN and the team's recent on-field success, you believe that it may be time to implement a season ticket plan in which seat location is tied to the size of the season ticket holder's annual donation. However, the implementation of this plan may be highly controversial and you are also unsure of exactly how much additional revenue will be generated from such a plan. As the athletic director, it is your job to develop a revenue and expense budget for the department each year. The implementation of a new minimum donation program for season ticket holders may have a significant impact on several different budget items. These may include revenue from ticket sales, donations, parking fees, concessions, and merchandise sales. For example, while the new policy should increase donations, how will it affect ticket sales if some fans decide to not buy season tickets because they do not want to pay the minimum donation? If these fans do not attend games, or attend fewer games, what is the impact on parking ( $15 per vehicle) and concession sales? Thankfully, you do have some financial data to help you in the decision-making process. As stated earlier, tables 1 and 2 provide historical financial and attendance data for the football program. Also, three years ago, you instituted a similar plan for men's basketball games. As a result of a minimum donation being required for the best 1,000 seats in your arena, the number of basketball season tickets sold actually dropped by 10% (from 1,200 to 1,080 ). However, the amount of donations that were made toward the basketball program increased by 15% (from $300,000 to $345,000 ). Thus, you have some idea of the impact of a mandatory donation program in another sport. University of Nowhere Revenue Snurroe hu Dommant.... nnen Table 2 Total Football Ticket Revenue. Bv Year Table 3 Hicteriral Ennthall Attendanre and nnnatinn nata