How Much Profit Was Given Up? $1+ Million.

#1
DiderotsGhost

DiderotsGhost

Well-Known Member
Joined
Nov 28, 2011
Messages
4,627
Likes
23,503
#1
I work in finance, so I'm really curious by how much profit UT might be giving up due to lack of fan interest right now. From the various reports, it looks like only about 84,000 tickets were sold to today's game and attendance might have only been 70,000. Max capacity is listed at about 102,000.

Troy tickets were listed at $45. If you assume the average fan provides $10 worth of profit (revenue - cost) to the concession picture, then it would appear that UT gave up at least $1.13 million in potential profit.

$810K in ticket sales.
$320K in concessions.

This might be conservative, too, because I'm sure there are other profit opportunities that I'm simply not considering. Merchandise sales? Parking? I don't know about those, so I'll just stay conservative.

Keep in mind that in financial terms, UT has highly fixed costs for its football games. That means that regardless of whether they sell 50,000 seats or 102,000 seats, the costs they incur are fairly similar. At some point, almost every additional ticket is pure profit.

$1.13 million of lost profit in one game is a lot! You can almost justify paying a coach a pretty good salary based on that ... so long as he can bring fans in.

Btw, this was just based on a quick search on how much ticket prices should be. Prices for the Missouri game are slotted at $70, so if we were to have similar attendance figures for that game, the lost profit would be higher.
 
Last edited:
  • Like
Reactions: 3 people
#2
#2
DiderotsGhost said:
I work in finance, so I'm really curious by how much profit UT might be giving up due to lack of fan interest right now. From the various reports, it looks like only about 84,000 tickets were sold to today's game and attendance might have only been 70,000. Max capacity is listed at about 102,000.

Troy tickets were listed at $45. If you assume the average fan provides $10 worth of profit (revenue - cost) to the concession picture, then it would appear that UT gave up about $1.13 million in potential profit.

$810K in ticket sales.
$320K in concessions.

This is easy profit, too. Keep in mind that in financial terms, UT has highly fixed costs for its football games. That means that regardless of whether they sell 50,000 seats or 102,000 seats, the costs they incur are fairly similar. At some point, almost every additional ticket is pure profit.

$1.13 million of lost profit in one game is a lot! You can almost justify paying a coach a pretty good salary based on that.

Btw, this was just based on a quick search on how much ticket prices should be. Prices for the Missouri game are slotted at $70, so if we were to have similar attendance figures for that game, the lost profit would be higher.
Click to expand...
It's economics, plain and simple. UT can't afford to keep Dooley and they can't afford not to hire a big-name coach.
 
  • Like
Reactions: 5 people
#5
#5
I think to effectively answer this question, we would have to know the actual break even point. I am sure that is a known figure within the AD. I wonder if anyone knows what this number is?
 
#7
#7
DiderotsGhost said:
I work in finance, so I'm really curious by how much profit UT might be giving up due to lack of fan interest right now. From the various reports, it looks like only about 84,000 tickets were sold to today's game and attendance might have only been 70,000. Max capacity is listed at about 102,000.

Troy tickets were listed at $45. If you assume the average fan provides $10 worth of profit (revenue - cost) to the concession picture, then it would appear that UT gave up at least $1.13 million in potential profit.

$810K in ticket sales.
$320K in concessions.

This might be conservative, too, because I'm sure there are other profit opportunities that I'm simply not considering. Merchandise sales? Parking? I don't know about those, so I'll just stay conservative.

Keep in mind that in financial terms, UT has highly fixed costs for its football games. That means that regardless of whether they sell 50,000 seats or 102,000 seats, the costs they incur are fairly similar. At some point, almost every additional ticket is pure profit.

$1.13 million of lost profit in one game is a lot! You can almost justify paying a coach a pretty good salary based on that ... so long as he can bring fans in.

Btw, this was just based on a quick search on how much ticket prices should be. Prices for the Missouri game are slotted at $70, so if we were to have similar attendance figures for that game, the lost profit would be higher.
Click to expand...

I agree with you. But few things to add too.No matter who you bring as coach, games like Troy are going to be low attendance and games like Florida are going to be sold out. So If we keep dooley..TN plays 7 homes games ...lets say 3 big games get sold out..and we have 2 troy type games (2 million loss) and two moderate games (Georgia/SC type)..1 million loss..so thats 3 million..make it 4 million with all other stuff !!

Now staff buyout total is 9 million approximate. Plus New coach probably won't come for 2 million. Lets say we pay him 5 million(Jon Gruden). That is extra 3 million a year. On top his assistants won't be cheap. Lets say around 2 million more a year. So that puts us 5 million more in expenses a year plus 9 million buyout. Now no matter what coach you get, no gurantees he will beat the likes of Bama, LSU , Florida, Georgia, SC day in and out !!
So Decision Hart has to make is : Can I wait on Dooley and see if he can fix things next year. If that happens Hart looks like genius.
Or he has to take a gamble: Can I hire Gruden or any big shot and things go wrong he looks like idiot and potentially gets fired for all the losses. Btw if things go right nobody gives credit to AD. How many times people give credit to Bama AD not Saban ?
So logically, lets say you are Hart (not an average VOL fan on Volnation) make a call !!
 
#8
#8
volmandu said:
I agree with you. But few things to add too.No matter who you bring as coach, games like Troy are going to be low attendance and games like Florida are going to be sold out. So If we keep dooley..TN plays 7 homes games ...lets say 3 big games get sold out..and we have 2 troy type games (2 million loss) and two moderate games (Georgia/SC type)..1 million loss..so thats 3 million..make it 4 million with all other stuff !!

Now staff buyout total is 9 million approximate. Plus New coach probably won't come for 2 million. Lets say we pay him 5 million(Jon Gruden). That is extra 3 million a year. On top his assistants won't be cheap. Lets say around 2 million more a year. So that puts us 5 million more in expenses a year plus 9 million buyout. Now no matter what coach you get, no gurantees he will beat the likes of Bama, LSU , Florida, Georgia, SC day in and out !!
So Decision Hart has to make is : Can I wait on Dooley and see if he can fix things next year. If that happens Hart looks like genius.
Or he has to take a gamble: Can I hire Gruden or any big shot and things go wrong he looks like idiot and potentially gets fired for all the losses. Btw if things go right nobody gives credit to AD. How many times people give credit to Bama AD not Saban ?
So logically, lets say you are Hart (not an average VOL fan on Volnation) make a call !!
Click to expand...

i'll tell you this...(i havn't looked at our next year schedule) but i guarantee our first home game next year, if gruden is coach will be sold out, and if dooley is coach it will be half empty (notice the negative lol). and i am assuming that the first home game is a "troy type" game.

edit: interchange Gruden's name with any other coach than dooley, and it holds true:rock:
 
Last edited:
#9
#9
4500 plus on VN at 1am right now ? lack of fan interest ? get a new job dude
 
#10
#10
508mikey said:
4500 plus on VN at 1am right now ? lack of fan interest ? get a new job dude
Click to expand...

and 95% are probably getting on here to

1. see if dooley was fired yet.
2. complain that he hasn't been fired yet.
3. check on the "e-insiders"
4. ramble about who our next coach is, based on "e-insiders"
 
  • Like
Reactions: 4 people
#11
#11
even with gruden, with lightweight teams like troy there will not be sellouts. fans want to see big games.
 
#12
#12
daj2576 said:
I think to effectively answer this question, we would have to know the actual break even point. I am sure that is a known figure within the AD. I wonder if anyone knows what this number is?
Click to expand...

It's irrelevant.

"Break-even" point is more relevant for a future projects. For a problem like this, the stadium is already constructed. We don't incur additional costs (at least not on a meaningful level) to seat more people. The only costs we incur at staff, logistics, and the such ... and those costs are mostly fixed regardless of whether we sell 30,000 tickets or 105,000 tickets.

In that scenario, nearly all lost revenue is also lost profit.
 
#13
#13
VolsRule said:
even with gruden, with lightweight teams like troy there will not be sellouts. fans want to see big games.
Click to expand...

in the long run, yes. but first game of season...no matter who you are playing people will come out.

**assuming we got rid of dooley and we had a new coach.
 
#15
#15
VolsRule said:
even with gruden, with lightweight teams like troy there will not be sellouts. fans want to see big games.
Click to expand...

Depends. We sold the games out in prior years, when we had a better team. I remember seeing Vanderbilt back in the Peyton Manning years and it was either sold out, or very, very close to it. Certainly more than 70,000 people there.
 
#16
#16
DiderotsGhost said:
It's irrelevant.

"Break-even" point is more relevant for a future projects. For a problem like this, the stadium is already constructed. We don't incur additional costs (at least not on a meaningful level) to seat more people. The only costs we incur at staff, logistics, and the such ... and those costs are mostly fixed regardless of whether we sell 30,000 tickets or 105,000 tickets.

In that scenario, nearly all lost revenue is also lost profit.
Click to expand...

kind of true, kind of not true. if you want to know how much you are making you are going to have to do this analysis. you know as well as i do that BEP is S=VC+FC+P so we need to not only know those figures you speak of that are mixed costs or as you put it "mostly fixed" but also need to know all of our variable costs.
 
#17
#17
Monkey Wrench said:
i'll tell you this...(i havn't looked at our next year schedule) but i guarantee our first home game next year, if gruden is coach will be sold out, and if dooley is coach it will be half empty (notice the negative lol). and i am assuming that the first home game is a "troy type" game.

edit: interchange Gruden's name with any other coach than dooley, and it holds true:rock:
Click to expand...

FYI Tennessee opens against a powerhouse; the mighty Austin Peay Governors (my heart swoons in anticipation)
 
#18
#18
Prior to Hart's arrival, the men's athletic department and the women's athletic department were separate. One of the first things he did was combine the two into one.
 
#20
#20
FearlessFreep said:
It's economics, plain and simple. UT can't afford to keep Dooley and they can't afford not to hire a big-name coach.
Click to expand...

I agree that we cannot afford to keep Dooley; however, we can afford a great coach if "prominent donors" pay for Dooley's... and all but two or three of his assistants' buyouts... and pay the new coaches' salaries for the first year or two, as has been widely rumored. I hope that happens, but I'm not holding my breath until Hart comes out from under the cone of silence.
 
#21
#21
TNnative said:
FYI Tennessee opens against a powerhouse; the mighty Austin Peay Governors (my heart swoons in anticipation)
Click to expand...

why schedule this no name team in the opener? hart needs to start scheduling good teams that will bring out the fans.
 
#22
#22
VolsRule said:
even with gruden, with lightweight teams like troy there will not be sellouts. fans want to see big games.
Click to expand...

That is simply incorrect. When we're winning, we fill the stadium for almost every game.

The 98 season averaged 106,914
99 106,849 .... last year, we only averaged 94,642. That's a huge drop off from a season that has us winning vs. a season where we perform poorly on the field.

If we're winning, we have a full stadium for almost every game. I could compare more winning vs poor season numbers but they always will show that 10 or 11 win seasons fill Neyland. Those in a position to crunch these numbers know what they mean. They're huge figures and it's why a change is going to be made.
 
#24
#24
DiderotsGhost said:
It's irrelevant.

"Break-even" point is more relevant for a future projects. For a problem like this, the stadium is already constructed. We don't incur additional costs (at least not on a meaningful level) to seat more people. The only costs we incur at staff, logistics, and the such ... and those costs are mostly fixed regardless of whether we sell 30,000 tickets or 105,000 tickets.

In that scenario, nearly all lost revenue is also lost profit.
Click to expand...

Gameday stadium is not our only cost. Not by a long shot. Think Fulmer buyout, facilities construction, etc.
 
#25
#25
Monkey Wrench said:
in the long run, yes. but first game of season...no matter who you are playing people will come out.

**assuming we got rid of dooley and we had a new coach.
Click to expand...

Usually they build a big hype during off season to sell out that first game and few more beginning games!! Like this year. We were hyped to believe that we are back !! No way we were back !! I thought we would go 9-3 but TN and media came out roaring make us believe that we are now in NC reckoning. Its all ticket and TV rating strategy !!
 
New posts
You must log in or register to reply here.

VN Store



Back
Top