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A Missourian Sports Special Report

South End Zone Project exemplifies SEC's unrelenting arms race

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ABOUT THIS SERIES: More than seven years after MU uprooted its history in the Big 12 Conference, the Missourian examines whether one of the biggest decisions in the university’s existence has met expectations. Through this series, which concludes today, we explored the benefits and drawbacks of the school’s move to the Southeastern Conference.

When Missouri opened its 2018 football season against UT Martin on Sept. 1, it did so in the shadow of a nearly 200-foot-tall crane, a symbolic reminder of the athletic department’s most ambitious capital venture yet. Nearly seven months later, a steel and concrete skeleton covered in yellow protective wrap stands in the stadium’s south end zone. The $98 million project, expected to be fully operational by the time Missouri hosts West Virginia in its 2019 home opener on Sept. 7, stands as a monument to life in the Southeastern Conference, where stagnation can mean disaster. It represents the “keeping up with the Joneses” mentality that the school understood when it joined the league in 2012, yet has failed to fully embrace because of the financial commitment it requires.

Of the 12 public universities in the SEC that responded to the Missourian’s records requests — as a private school, Vanderbilt isn’t required to disclose its financial records — Missouri ranked in the bottom third in both ticket sales and athletic donations in fiscal year 2018, and its $1.23 million in revenue from licensing, advertisement and sponsorship was at least $10 million less than six of its conference counterparts. Its football facilities lag behind nearly all of its league peers, something SEC commissioner Greg Sankey made a point to mention when he met with newly hired athletic director Jim Sterk in August 2017. Left unsaid from that conversation, or perhaps not, was the notion that without substantial financial growth, Missouri would struggle to keep pace with the rest of the league, which boasts 13 of the top 32 revenue-generating athletic departments in the country.

Amid college football’s ongoing attendance crisis — attendance dropped by more than 7 percent across Division I football in the past four years — Missouri opted to follow the path of a number of its peers, choosing to downsize its venue and bank on premium seating to offset declining football ticket revenue. The project, which has already raised more than $50 million in donations — the remaining balance will be paid by revenues bonds — is expected to bring in roughly $6 million per year in revenue, according to school officials.

It was just a decade ago, and in Missouri’s case, within the past six years, that the answer was thought to be bigger, not better. Schools were taking their newly made millions from college football’s television explosion and building their stadiums on a monstrous scale. In 2015, Texas A&M, which joined the SEC in the same year as Missouri, finished a $485 million expansion of Kyle Field that added more than 20,000 seats. When Missouri entered the SEC in 2012, then-athletic director Mike Alden introduced plans to expand the capacity of Memorial Stadium to accommodate the masses of fans he and school officials believed would come to games in Columbia.

But as attendance numbers continued to plummet and expenses added up, Missouri abandoned most of that project. Now, nearly seven years later, the athletic department has reimagined its stadium renovation in hopes of not only attracting wealthy donors, but also paying for upgraded football facilities needed to keep pace in the best college football conference in America.

Following a trend

Missouri, and the other athletic departments that have undertaken similar projects in recent years, were by no means pioneers in their thinking. Stanford senior athletic director Ray Purpur drew the ire of school alumni in 2006 when the university’s Board of Trustees approved a $95 million plan to shrink its stadium capacity from 85,000 seats to 50,000, even though the Cardinal’s football team drew fewer than 35,000 fans for most games. Much of that criticism centered around the “lavish spending” associated with intercollegiate athletics, according to the New York Times. Stanford took a gamble on a program that finished 1-11 the previous season and hadn’t recorded a winning season in five years.

The project, originally meant to replace single-game ticket buyers with season-ticket holders and ultimately make Stanford Stadium a more attractive venue for possible Olympics bids, came at the beginning of a trend that has proliferated through university athletic departments across the country. Arizona State, Kentucky, North Carolina and even traditional football powers like Notre Dame, Ohio State and Penn State have approved or finished projects to decrease seating capacity over the past three years. When it demolished Floyd Casey Stadium in 2014, Baylor opted to replace it with the smaller, 45,000-seat McLane Stadium.

It’s a trend that James Kahler, the executive director of the Center of Sports Administration at Ohio University and a former Cleveland Cavaliers marketing executive, doesn’t believe will end any time soon. More sports fans each year, including at the college level, are choosing to watch from the comfort of their own homes rather than braving traffic, long concession and restroom lines, and oftentimes poor weather to watch in person.

Concurrently, the production quality of TV broadcasts — and the actual devices fans watch on — have improved exponentially over the past dozen years. Ahead of the College Football Playoff National Championship in early January, ESPN touted “vantage points from unimaginable angles,” using 250 cameras to broadcast every aspect of the game, and it even offered channels with different commentators for viewers to customize their experience.

This past season, 12 of Missouri’s 13 games were broadcast nationally, and the one that wasn’t could be streamed over the Internet anywhere in the country with a Wi-Fi connection. A decade ago, Missouri was lucky to have half that many games televised; and before the school’s move to the SEC, they were typically limited to regional networks you couldn’t get outside of the Midwest.

“Your phone is your new TV set so you can get it on the go, and the number of games you can watch is at an all-time high,” Kahler said. “It wasn’t too long ago that you could only watch two or three college football games on a weekend. … For the older generation, it was a big deal to go to a game, and we didn’t have a 55-inch TV to watch multiple games on. The experience at home in the family room has gotten a lot better.”

Cable can’t fix it

In late June 2012, just days before Missouri was officially accepted into the SEC, the university’s Board of Curators announced a $72 million plan to expand Memorial Stadium’s capacity to roughly 75,000, adding 5,000 upper bowl seats and 1,000 club level seats to the east side of the stadium. It was touted by Alden and then-head coach Gary Pinkel as Missouri’s first big foray into competing in the SEC. The stadium expansion would lift Missouri into the upper echelon of stadium sizes to accommodate the increase in attendance it expected to see.

“When it’s all said and done, we’ll be up there in the top half of the SEC,” Pinkel said in 2012. “And the top half in that league is compared probably to the top 10 in college football. We’re doing the right things.”

After winning the SEC East in both 2013 and 2014, two seasons in which Missouri’s average attendance reached more than 63,000 fans per game, expanding Memorial Stadium seemed to make sense. As the Tigers’ program continued to win, the thinking went, more seats would be necessary.

But Missouri finished just 5-7 the next year, marking just the second time since 2003 that the Tigers hadn’t finished with a winning record. The on-field struggles were compounded with the football team threatening to boycott practices and games amid racial unrest on campus. Ultimately, the team played its final three games of the season, including an emotional 20-14 win over BYU a week after the boycott began, but the damage to its fan base was done. Missouri’s attendance dwindled after the 2015 season — 8,216 fewer season tickets were sold in 2016 than the year before, and overall average attendance dropped by nearly 13,000 people per game.

Associate athletic director Chad Moller told The Associated Press in November 2016 that it was not only Missouri’s struggles on the field that caused the attendance drop but also backlash from the football team’s decision to join campus protests amid racial tensions at the school.

“Naturally, as we get back to playing winning football, the attendance will work its way back up,” Moller added. “We’re confident of that.”

But a 7-6 record in 2017, capped off by six consecutive wins to close out the year, and an 8-4 mark in 2018 didn’t make a dent.

An argument can be made that Missouri’s inability to return to the same success it reached between 2008 and 2014 has had a more profound effect on overall attendance than the 2015 issues.

Whatever the reasons, one fact remains: Missouri hasn’t drawn more than 60,000 fans for a game since Oct. 10, 2015 — the final home game before the protests.

Average announced football game attendance dropped from 65,120 in 2015 to 51,465 in 2018, and just over 24,300 tickets per game were actually scanned in 2018, according to documents obtained by the Missourian through an open-records request. Athletic department officials say that drop is due to faulty ticket scanners, which are affected by weather and spotty Wi-Fi at the stadium.

Regardless of what the real attendance numbers are, Missouri’s overall ticket revenue has plummeted in the last half-decade. The football program’s ticket revenue alone dropped by nearly 31 percent between 2014 and 2018; and last year, the athletic department operated under a budget deficit for the second consecutive year. In its most recent financial reports filed with the NCAA, Missouri reported just $17.5 million in total ticket sales, putting it second-to-last among the SEC’s 13 public universities. Florida, which had the seventh-highest ticket sales in the conference, brought in more than $32 million last year, and LSU, the league’s bell cow in ticket sales, totaled over $40.2 million, nearly 85 percent of which came from football.

The media rights fees college conferences receive from networks like ESPN, CBS and Fox have grown at a remarkable clip — Missouri’s revenue from media rights has more than tripled in the past 10 years. But every other SEC school has profited from the same growth, and schools still have to bring money in through traditional attendance and contributions to remain financially competitive.

New vision

In August 2017, less than two years after the protests and a little more than five years after the unfinished expansion had been originally approved, the Board of Curators approved the South End Zone Project. As plans began to ramp up and donations came in, Sterk and other members of the athletic department traveled to schools across the country to look at similar projects at Washington and Purdue.

The south end zone, which hadn’t received a substantial renovation since 1977, was the natural spot. Missouri considered a smaller project that would have upgraded the current amenities and added seating, but Sterk, after conversations with staff and donors, pushed for a complete rebuild. Expected cost jumped from $75 million to nearly $100 million, but more than $50 million has been raised in donations to fund the project.

By March 2018, demolition had begun on the current space, with Kansas City-based design firm Populous hired as the architect. The company has designed dozens of collegiate stadium and arena projects in the past decade, including the $75 million Mizzou Arena in 2004.

The approximately 10,800 general admission seats that were torn down last spring will be replaced by 16 luxury suites — one of which is given to head men's basketball coach Cuonzo Martin as part of his contract with the school — along with a 750-person field-level club that will allow fans to greet players as they enter and exit the locker room, a 1,254-seat indoor club area with private food service and restrooms, and a general seating area that will hold approximately 1,400 more fans.

The suites, which require a one-time $100,000 capital donation, will cost between $32,000 and $49,000 yearly depending on their capacity. Club level seats require a one-time $1,500 capital gift, plus an annual $1,500 donation per seat and the cost of a season ticket, which ranges from $199-$399. Access to the field club will cost an additional $850 per person, along with a $1,000 capital gift per person.

The school has yet to release information about sales specific to the project, but premium seating at Memorial was completely sold out for the 2018 season, deputy athletic director Nick Joos said.

“There’s a great demand for premium experiences,” Joos added. “You see it in baseball — all the seats behind home plate that the Royals have carved out. Field-level boxes similar to the ones the Dallas Cowboys did at their stadium. I don’t know that you can ever have too much (premium seating) because there’s just a high demand for those seats.”

Also included in the nearly 200,000 square-foot space will be a new video board, football locker rooms, a weight room, reception space and coaching offices. The first floor, including team meeting rooms, are expected to be ready when the team reports for summer workouts on Memorial Day weekend. Coaches will move into their offices in mid-June, and the rest of the facility is expected to be finished by mid-July.

The process hasn’t been without its challenges, though. A long winter, combined with a shortage of local construction workers — Missouri suffered a 7.2-percent loss in construction employment between December 2016 and 2017 — has slowed progress.

Sizing down

Once renovations are completed, Memorial Stadium’s capacity will drop from 71,168 to 65,000, making it the sixth-smallest venue in the SEC, just ahead of Vaught-Hemingway Stadium at Ole Miss.

The success of similar projects at schools such as Colorado, Arizona State and even Stanford is hard to quantify. As a private institution, Stanford isn’t required to disclose its revenues and expenditures. At Arizona State, football revenue in fiscal year 2017 was nearly identical to the year before, despite major facility renovations and increased premium seating. In Boulder, the Buffaloes’ ticket revenue rose slightly after their project was completed in 2015, and then it jumped up more than $1.4 million in 2017 after the team played for the Pac-12 Championship the year before.

For Missouri, the $98 million gamble is a bet on its ability to continue winning football games and ultimately entice fans to keep showing up, despite the across-the-board decline in attendance nationally and its own recent struggles. That more than half of the project’s cost is covered by donations — and the fact that the premium seating will be paid for ahead of time regardless of whether fans show up — limits some of the risk that Missouri’s revenue projections might be too ambitious.

Athletic department officials hope the additional premium seating options can both entice current fans to upgrade their tickets while also drawing other fans to traditional ticket packages. But unless overall attendance reverses its downward spiral and ticket revenues follow it, the athletic department risks falling even further behind its peers.

“There’s not many places like a Nebraska that no matter what your record is, 90,000 people are going to show up every game,” Joos said. “ … There’s a handful of places like that, and then there’s a lot of the rest of us fighting and scraping tooth and nail for a chance to bring in a few additional dollars.”

Stephanie Hamann also contributed to this report.

Supervising editor is Michael Knisley.

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