“The expenses are not going down.”

Look, contrary to what some of you might think, it’s not as if I take great pleasure in ragging on Greg McGarity’s financial acumen.  But it’s hard to suffer in silence when my bullshit detector’s raging over comments like this one, about raising ticket prices:

“We have limited ways to generate revenue,” McGarity said at a UGA Athletic Association board of director’s meeting. “Unless we have increases in SEC money, which we don’t know, nobody knows what the TV network is going to generate but that’s [ticket sales] our really only other revenue source that we have.”

Reality, in the form of USA Today’s handy NCAA Finances chart, tells a different story.  If you click on the Georgia tab, you’ll see a steady increase in income over the last nine years:

  • 2013:  $98,120,889
  • 2012:  $91,670,613
  • 2011:  $92,341,067
  • 2010:  $89,735,934
  • 2009:  $83,507,796
  • 2008:  $85,554,395
  • 2007:  $78,364,621
  • 2006:  $79,237,929
  • 2005:  $68,787,384

That’s a thirty million dollar increase in annual revenue over that period, an almost 43% increase. (With a big ass recession smack dab in the middle, don’t forget.)  If that’s limited, I’d love to see McGarity’s definition of wide open.  And can we please stop with the “nobody knows what the TV network is going to generate” stuff?  Don’t tell me you’ve uprooted decades of conference tradition because you think there’s a good chance you’ll lose money on it.  Next we’ll be hearing that the school can’t expect any money from playoff expansion.

Yes, expenses have gone up during that same period, and at a greater clip than revenues – from $44,933,055 to $96,904,626.  Some of that can be chalked up to a rapid rise in coaching expenses – SEC, baby! – but there’s been an astounding increase in spending on buildings/grounds, from $2,242,329 to $24,566,189.  I doubt all of that can be attributed to football, but since that’s where guys like Hobie Jones are…

Hobie Jones, a Georgia alumni and lawyer living in Peachtree City, has been going to games since he was 7 years old and said he has not missed a home game in six years.

Jones said that an increase in ticket prices would not affect him.

“I would go either way,” Jones said.

… that’s where McGarity plans on getting the money from.  Thanks, Hobie!

That being said, I admit it could be worse.

**************************************************************************

UPDATE:  Oh, yeah. This reminded me of something else in the McGarity piece…

While the rationale for the move is largely economic, there is a football aspect to the increase, as Georgia looks to position itself as a controlling player in non-conference scheduling. Georgia pays teams who are not in their conference to come to Athens and play. McGarity estimates that UGA makes about 2.25 million dollars per home game. An increase in this number would allow UGA more room to be creative in scheduling, as it would have access to more money to lure teams to Sanford Stadium.

In other words, the cost of scheduling non-conference opponents who will accept one game offers is rising.  So we ticket buyers gotta pay for that.

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26 Comments

Filed under Georgia Football, It's Just Bidness

26 responses to ““The expenses are not going down.”

  1. Bob

    And just in time for Southern, LA Monroe, Georgia Southern and Kentucky. Gotta love it.

  2. cube

    They’re not considering raising student ticket prices too, are they? Student attendance is in a downward spiral.

  3. pantslesspatdye

    There’s a large population of people on the precipice of giving up their tickets. If there was to be a bad year or two, this whole model could fall apart. Maybe that’s why he is so stingy with the reserve fund.

  4. simpl_matter

    He’s channeling Mortimer Duke, now who should play his brother Randolph…

  5. AthensHomerDawg

    Further proof that the darn lawyers are making too much money!!!!!

  6. reipar

    As much as I hate it personally there is no doubt the tickets are underpriced. A lot of lame excuses being made on why they are looking to raise the prices, but the point is the free market is at work here. It would be stupid not to raise the prices when the market will bear it. They are currently leaving money on the table while expenses do not appear to be tapering off at all.

    • As much as I hate it personally there is no doubt the tickets are underpriced.

      Not when you factor in the Hartman Fund contribution.

      • reipar

        Yes they are still underpriced as they can charge more and people will continue to buy them. That is what the free market is all about. Increase the price until you lost customers and you are charging too much. Decrease the price too much and you are leaving money on the table. If tickets went up $5/game I find it hard to imagine that many people would drop their tickets for an extra $35/year.

        • Jman781

          I agree completely. I would have a bigger issue if they raised the requirements for contributing to the Hartman Fund.

    • cube

      There’s no doubt the tickets are underpriced? How many people donated this year but still weren’t able to get season tickets? If the answer is greater than zero, they’re underpriced. If the answer is zero, they’re priced just right.

      • reipar

        One thing has nothing to do with the other. They only sell 50,000 season tickets. As long as 50,000 people are willing to continue to get season tickets with a price increase then they are leaving money on the table.

        • cube

          Incorrect. If the current demand for season tickets exactly equals the number of season tickets available, the price of either the donation or the ticket is raised, and all other things remain equal, demand will drop due to the increase. That’s how supply and demand works. When you’re dealing with a huge population of people who buy a certain product, you inevitably have people who are no longer interested when the price goes up.

          And by the way, they actually sell 55k season tickets.

          • reipar

            Thanks for the clarification on the 55,000. However, as every year they sell all those tickets then it would make sense to either raise the price of sell more than the 55,000. First we do not know if everyone that contributes receives tickets. Second we do not know if some people do not contribute as they know without making a huge initial contribution they will be unable to secure season tickets. Third even if they only sell 54,000 season tickets the price increase could more than make up for any decrease in season ticket sales and provide the university with more flexibility on making money on the individual tickets they now have.

            Basically it is not as simple as just saying if no one is not getting tickets then the price is right.

            • cube

              1) They can’t sell more than 55k season tickets without taking tickets from the student allotment, visiting team allotment, recruiting allotment, etc.

              2) We absolutely will know whether people contributed but did not receive season tickets. That information is usually released during the summer. And your statement “they know without making a huge initial contribution they will be unable to secure season tickets” sounds like it is from 2008. Anyone donating the minimum has been able to get season tickets for the last few years.

              3) As for your assertion that the resulting decreased demand (i.e. 54k season ticket holders instead of 55k season ticket holders) doesn’t necessarily mean that the tickets will be overpriced…this gets into the strategy of pricing your tickets. If your highest priority is keeping demand high, selling out the events, keeping a great atmosphere, and caring for the long term health of your product, then you should price while aiming for 100% demand. However, if your highest priority is maximizing profit margin in the short term, then you should price to maximize revenue while not caring so much about continuing to sell out and keeping your product healthy for the long term.

      • For the last couple years, anyone giving the minimum donation ($1,000) has been able to get tickets. I’ve had several friends sign up (even last year one of them made their contribution 2 weeks after the deadline) and got tickets.

        Based off of that, they’re not underpriced.

  7. LRGK9

    “Let them eat cake”. ADGM

  8. AusDawg85

    $6000 gets you a 75″ state-of-the-art Samsung TV at Costco. Toss in a $500 portable generator, $200 tent and lawn furniture, and I’d tailgate under a tree in Athens in a heartbeat if the drive wasn’t 1000 damn miles…each way. Also assumes I could find said tree on campus. Do they block access to the cemetery across the street? Is it wrong I’m asking?

    • reipar

      You can still find a tree in Athens, but not likely on campus for what you are trying to do because of the time restrictions and having to carry everything. The cemetery is still open, but only for permit tailgating. If you really want to tailgate on campus and have a tree…..bring a tent lol.

      • Cousin Eddie

        Up next charging for “Tent Lots” for tailgating, that is an untapped revenue stream.

      • AusDawg85

        The cemetery is permit parking? That’s just….wrong. Next you’ll tell me I can’t sit on the RR tracks to see the game! ;-)

        • tess

          The cemetery is where the lettermen tailgate. They have a group with a deal to use the restrooms (and possibly the kitchen, but I think it’s just the restrooms) at the sexton’s house. The sexton’s house is available for rent from the Friends of Oconee Hill Cemetery, but it’s essentially already reserved for the lettermen for home games.

          Oconee Hill has had a ton of trouble with vandalism over the years. The last thing they want is obnoxious, drunk, pissed off fans in a National Historic Site; that’s why they only have an arrangement with a group that also has its own section in the cemetery.

  9. AthensHomerDawg

    I wonder if a lot of posters here forget that McGarity does what he is told to. Just sayin’

  10. Bulldog Joe

    Wisconsin’s contributions went from $19M to $58M last year?

    Wow.

  11. I think a ticket price increase is completely unnecessary and un-warranted give the value presented to us as season ticket holders. However, when comparing our counterparts in the conference we have some of the lowest face value tickets (the donations do factor in, but the other schools have them too), and that’s exactly why GMcG will be able to do it.

    In the end, I think season ticket holders need to make a huge stink about any increase that is made. I suggest this not to really stop this increase (which I expect to be minimal), but to make it clear that on the next increase where they really want to raise the price, they know ahead of time how we’ll react and that we won’t tolerate it (unless there is a substantial change in value).