July 24, 2003
TO: Fans, Friends, and Supporters of LSU Athletics
FROM: Skip Bertman, LSU Director of Athletics
This Week:
We had another tremendous response to last week’s Cyber-side Chat that outlined where LSU ranked in comparison to its sister schools in the SEC in fund-raising through its football stadium.
The responses we received can be divided into three clear categories: First, those that commented on the financial ramifications of the “12 percent law” and how it could be changed; second, those that questioned why LSU doesn’t just raise ticket prices to meet its financial needs; and third, those that had questions regarding how ticket sales and suite sales figure into LSU’s total revenue.
First, let me make this clear. These Cyber-side Chats are not intended to rally support for changing the “12 percent law.” We withdrew our effort to change that law at the advice of some very good friends and supporters in and close to the Louisiana Legislature. Any references made to that law in these letters to you are intended simply to provide an indication of why we must pursue alternative methods of producing revenue.
Second, yes, LSU can just raise ticket prices. But the purpose of trying to eliminate the “12 percent law” was to enable new funds to go to a private LSU-dedicated organization to more efficiently spend the money. LSU has the authority, with the approval of the Board of Supervisors, to raise ticket prices and to require contributions to LSU which are related to ticket purchases. But we must first establish a resourceful way of utilizing those new funds.
The absolute given is that we must raise new revenue in some form or fashion in the near future. How much and how to effectively spend that new revenue are matters that must still be determined.
And third, the figures in last week’s Cyber-side Chat were for Priority Seating and for Club Seating only. Many of you asked about ticket sales and suite sales. LSU Athletics generates $18.5 million in football ticket sales and, through the Tiger Athletic Foundation, makes $4.0 million per year on Tiger Den Suite sales.
That $4.0 million from the Tiger Den Suites goes into paying off the debt on the East Side renovation, and will continue to do so for 25 more years.
That’s where comparisons to other schools can get confusing. Every school has debt, but most are debt structures that are not comparable because, for instance, a football expansion may be part of an arena project or other facility upgrade. And many debt structures are part of bonds that have the full faith and credit of their states behind them.
Remember, the TAF did the east side expansion bond offering on its own, quite a feat for a small organization. And it was done at no cost to the existing ticket buyer or the tax payer. The east side, in fact, allowed LSU to increase revenues because of the additional seating revenue produced by 11,000 new seats.
So here is how the SEC schools now stack up in total football revenue
(Ticket Sales plus Priority Seating plus Club Seating plus Suite sales):
Tennessee, $39.9 million
Georgia, $37.1 million
Florida, $33.2 million
Auburn, $33.2 million
Alabama, $29.3 million
LSU, $27.5 million
South Carolina, $26.1 million
Arkansas, $23.6 million
Ole Miss, $18.0 million
Miss. State, $12.9 million
Kentucky, $12.4 million
These are 2002 figures. We have only been able to creep up into the middle of the pack in the last few years because of that east side expansion of Tiger Stadium, yet we’re still $10 million to $12 million behind the top two schools.
But soon, we’ll be falling back in the pack again. Four of the schools ahead of LSU in all of these lists — Georgia, Florida, Auburn and Alabama — all have major football stadium expansions either underway or on the drawing board. Florida alone will make $8 million in new revenue this year because of its stadium expansion. Those other schools stand to increase their revenue as their stadium capacities increase.
No matter how you look at it, it’s clear that if we don’t begin addressing our financial and facility situation now, the schools ahead of us will pull farther away and the schools behind us will soon move past.
Thanks again for your time and for being a Tiger fan. I encourage you to send your feedback to us at LSUvision@etigers.net. Although I cannot guarantee a response to every e-mail, please know they will all be read, so I hope you will participate. Thank you for your continued support of Tiger Athletics.
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