Penn State Football: The Dollars & Sense of Playing in 2020

Will there be Penn State football in 2020?

The answer is starting to come into focus:

It’s unlikely. To be honest, with coronavirus rates spiking left and right, it’s nearly impossible.

It is 55 days until what was supposed to be Penn State’s 2020 season-opener against Kent State, now aborted. And both Ohio State, the Big Ten’s premiere program, and Maryland, Penn State’s closest conference neighbor, have shut down football drills due to positive COVID-19 tests.

The sense of playing does not add up. (And, as we’ll show, increasingly neither do the dollars.)

I mean, c’mon — it’s a pandemic.

As an Ivy League football coach told The Athletic this week: “You can’t recruit a kid and tell him you care about him, tell his parents, you’re going to care for him, and then something happens to him that you could have prevented. Do I want to win a conference title? Yeah, we all do. But at the end of the day, what matters most? If the kids matter more than income and all those things, I think inevitably we get to the same answer.”

Big Ten commissioner Kevin Warren had this to say when announcing there would only be intra-conference games this fall: “…We made a vow early on that first and foremost, we would put the health and safety and wellness of our student athletes at the center of all of our decisions. 

“One thing we have to realize that this is not a fait accompli that we’re going to have sports in the fall,’ Warren added. ‘We may not have sports in the fall. We may not have a college football season in the Big Ten.”

And Greg Sankey, commissioner of the SEC — home to coronavirus hot spots like Florida, Georgia and Louisiana — this week said, in Faucian fashion, “we are running out of time to correct and get things right. And, as a society, we owe it to each other to be healthy as we can be.”

The falling dominoes are picking up momentum.

And, bit by bigger bit and faster and faster, the dollars do not add up either.

INSIDE BEAVER STADIUM

Let’s say Penn State’s current plans for home games allow for a quarter-full Beaver Stadium. That’s 27,000.

Home game ticket revenue for seven Penn State contests in 2018, according to numbers PSU submitted to the NCAA, was about $37 million. That’s $5.3 million per game. A quarter of that is $1.325 million — assuming the mix of students, fans, alumni and high rollin’ donors allowed inside the stadium in 2020 is the usual.

Five home games is $6.6 million.

I find it hard to believe that Penn State writ large, which has gross revenues of $6.8 billion — with a B — needs the $6 mil that much. Especially knowing how conservative Penn State Risk Management is. And, especially in this case, rightfully so. The twin towers of Health and Safety First say that if you do play games in Beaver Stadium in 2020, do it sans fans. #weare…notsuperspreaders

So, already — or currently — that’s a $30 million hit. Of course, Penn State could keep that money and roll it over in 2021. But then it’s a loss for next season. It’s really a two-year conundrum.

That $30 million just for tickets, not contributions — the Nittany Lion Club fees and get-in seat license “contribution” that gives fans the right to buy tickets. In 2018, the contribution fees attributed to football were about $11 million. Contribution levels were raised in January 2020 for the first time in nine years, by $50 to $100, so figure that number is $14 million or so. 

For 2020, Penn State’s 64,000 season ticket-holders have already paid in full, for the tickets and the get-in contributions. So, for now, PSU is sitting on at least $45 million of that cold cash.

What Penn State athletics does not have in hand is any 2020 season-ticket money from students. In a normal year, with 21,000 students buying a seven-game season ticket for $224, the take is $4.7 million (about 13% of overall ticket sales).

The value of the student season ticket-holders is far beyond football money. They are the homefield advantage, the atmosphere that attracts recruits and — maybe most important — is marketing personified. Penn State football is a big reason that high school students pick Penn State. For decades, the football experience has always been a huge selling point when it comes to re-filling the undergraduate pipeline.

That’s where the real money is. A PSU undergrad pays between $22,000 (for PA residents) and $39,000 (for out-of-state) a year in tuition. Figuring a 60/40 split of the students paying football season tickets, they represent $600 million in tuition. Just tuition, not room and board.

The idea of a 2020 season is certainly a reason many students have decided to return to campus in the fall. But, right now, Penn State has not sold a single ticket to a single game to a single Penn State student.

For good reason: There is no certainty there will be a 2020 season, or how many of those 21,000 student season-buyers will be allowed in the stadium for each game if and when those five anticipated home games are even played.

Using 27,000 fans per game as a measuring stick, if 7,000 students attend each game, that would give the seniors two games and every other student one game. If 14,000 students are allowed in per game, that gives seniors and juniors three games each and sophomores and freshman two games, with a smattering of grad students as well.

If I’m Penn State president Eric Barron and the PSU marketing folks, I want as many students as possible in Beaver Stadium this fall, if football is played. They represent hundreds of millions of tuition dollars and, honestly, it is safer for them to be there than the average season-ticket buyer and athletics donor. For James Franklin & Co., even half of the usual 21,000 on hand would salvage a serious homefield advantage. Heck, while we are at it, make every game a Whiteout.

PROFIT VS. PROPHET

Likely, though, who gets in will be a moot point.

Either way — football or no football this fall — the decision will come at a big cost.

For the past two fiscal years, Penn State athletics grossed about $164 million, with $55.6 million of that coming directly from the Big Ten last year. Overall, Penn State’s financial folks indicate that $100 million is attributable to football. In 2018-19, football showed a $45 million profit. Football ticket sales ($37 million) and football media rights ($34 million) contribute to over 70% of that revenue stream.

Now, if the 2020 season occurs as currently constructed, take away that big chunk of the ticket revenue and another $5 million lost due to limited parking and minimal concessions. Then add additional expenses to safely run games, do testing and put in place safety protocols on a daily basis. Then add the monies lost via contribution give-backs or extensions to 2021, and that “profit” is wiped out. Even if Penn State athletics is successful in keeping ticker-buyers’ “get-in” money and/or ticket fees from 2020 by rolling it over to 2021 to mollify folks, that will be money lost in next year’s budget.

Again, all of this is assuming there will be a season. And that 27,000 fans will be inside Beaver Stadium to experience it firsthand. It’s very possible only half of that will be in attendance. The NFL — which is unabashedly a business, and pays its players, who have a union to protect their health and interests — is figuring 14,000 or 15,000 fans per game, albeit in smaller venues. Assuming there is an NFL this year.

That’s just the tip of the financial iceberg.

We know that along with the Big Ten Conference, football pays the athletic bills at Penn State.

And, apparently, Penn State athletics is not in dire straits. Work has begun on the expansion of Lasch Building, improvements to Holuba Hall and enhancements to the football practice fields; two diggers are onsite, already at work among piles of stone and dirt, and a row of construction trailers. That project has a $69 million price tag.

I didn’t do all the math, but it is likely that $69 mil — slated to be raised from private donations — could help make up the difference for no football in 2020, and keep the 31 sports at Penn State, 300-plus ICA employees and 27 deputy, senior, associate and assistant athletic directors whole and intact. I’d rather have field hockey, softball and fencing stay viable, than another Taj Mahal for football. Would those improvements have forestalled four WR coaches in four seasons? Beaten Ohio State in Columbus last fall? Or called a better play on Fourth and 5 in Beaver Stadium in 2018?

Here’s another thing: Naysayers across the country said that the Sandusky scandal would kill Penn State football and, by extension, Penn State’s stellar and extensive intercollegiate athletic program.

Didn’t happen. The Penn State players, fans, coaches, alumni, donors, community and administration proved them all wrong, in myriad ways and cohesive fashion.

Still, athletics continues to pay off a big financial debt due to the sanctions, with the help of a loan from Old Main. If there’s no football this fall, who’s to say that Old Main — under pressure itself, obviously, with the real potential of a smaller enrollment — can’t make another loan.

Here’s where the hard and true experience of the Penn State community going through two once-in-a-lifetime punches to the gut in less than a decade, comes into play. (It certainly helps that SVP/business czar David Gray, who came back to his alma mater in 2012 to assist a university in dire straits, has pushed back his retirement to help steady the financial ship.)

DECISION DAY

Expect a decision on football this fall by August 1. Don’t forget: Ultimately, for Penn State, what Gov. Tom Wolf rules regarding fans and how many are in Beaver Stadium, would over-rule any Big Ten decision to play football come September.

I think playing football in spring 2021 is a viable option. Now, more than ever.

A 10-game fall schedule for Big Ten fooball teams is being concocted right now. For Penn State, figure that Rutgers will be scheduled for September, not late November, for instance. Such a slate would be very portable into the spring.

Play could start on March 6, 2021, and end on May 8 (allowing for a 10-game schedule), and the revenues would still be in Penn State’s 2020-21 fiscal year.

Not saying there will be a vaccine by then, but it sure does provide a lot more time to make football safer — for players, coaches, support staff, students, fans — than it will be in 55 days. Think about how much has been learned about the virus in its first seven months of existence. Waiting another seven months to reap the gains of scientific discovery makes sense, and likely more dollars.

And what about the 2021 season?

True, there’s the quick turnaround, the toll on the bodies and all. Well, let’s cross that bridge when we come to it. But maybe that season starts October 2 and is (again) only conference games. That’s 20 regular-season games in nine months, with a break in-between. Teams are already playing 13-, 14- and even 15-game seasons over four months as it is.

But, you say:

Spring football would mean no Micah, no Journey, no Freiermuth — as they would likely opt out to prep for the NFL Draft. Yeah, well. Maybe the NFL will push back the date (thus far, it has said it will not). And even if it doesn’t, do you think those 64,000 season ticket-holders and 21,000 students won’t come back if there’s no No. 11?

I doubt it.

That’s down the road. Right now, the much bigger doubt is that there will be any football at all in Beaver Stadium in 2020.