Hardaway hiring has Memphis athletics expecting $4.5M boost in sales, donations
The boost in morale that accompanied the hiring of new Memphis men’s basketball coach Penny Hardaway in March has been palpable throughout the city. But this week, university officials plan to disclose just how much the school could benefit financially over the next year.
Memphis is anticipating an increase of $4.5 million in athletic department ticket sales and donations during fiscal year 2019, according to documents provided by the university in advance of Wednesday’s Board of Trustees meeting on campus.
The school didn’t specify whether those expected increases were due to any particular sport, but a source with knowledge of the situation told The Commercial Appeal last month that donations tied to 2018-19 men’s basketball season ticket sales already totaled $4.86 million, up from $2 million at the same time last year.
These latest athletic department revenue projections will be part of a pres-
entation to the Board of Trustees about the university’s proposed budget for fiscal year 2019, which begins on July 1.
Why increased Memphis revenue is important
Donations to the athletic department were down almost $1.1 million during the 2017 fiscal year, which is the most recent NCAA filing available via open records request. The drop was largely because of a significant dip in men’s basketball season ticket sales ahead of this past season.
The Tigers sold only 4,115 season tickets in 2017-18, a figure university president David Rudd called “the lowest in modern history for Tiger basketball.” Announced attendance during the 201718 season fell to a 48-year-low.
As a result, Memphis missed out entirely on an $800,000 payment from the Memphis Grizzlies as part of its lease agreement at FedExForum for the first time. The Tigers averaged 4,583 fans over 19 regular-season home games based on their turnstile count, which measures the number of fans who physically attended each game.
Decreasing fan support and financial concerns surrounding the program were the primary catalyst behind the decision to fire former coach Tubby Smith after just two seasons.
Rudd told reporters when Hardaway was introduced as the school’s new coach that the program was projected to lose $4.7 million in revenue this year. It now appears Memphis expects to erase almost the entire shortfall in Hardaway’s first season.
Last month, the source said Memphis is conservatively projecting it will sell at least 7,000-7,500 season tickets for the upcoming men’s basketball season.
The university’s preliminary budget for next year includes a $4.5 million increase in expenses related to recurring athletics operations. Memphis owes Smith nearly $10 million after firing him with three years remaining, but can pay him that figure over six years.
The football team could also see an increase in revenue related to ticket sales. Though the program sold a record 22,500 season tickets ahead of the 2017 season, its announced attendance fell by 2.8 percent from the year before, to 36,302 per game, even though the Tigers made the AAC championship game for the first time.
Athletic director Tom Bowen said before the 2017 season began he hoped to average 40,000 fans per game, but poor weather had a major effect on the gate at several games. Memphis announced price increases for football season tickets in March for the fourth consecutive year.
Football and men’s basketball accounted for more than 99 percent of the athletic department’s ticket sales, which totaled about $8.8 million during the 2017 fiscal year.
When the university’s Board of Trustees last met in March, just as speculation about Smith’s job security began to swirl, Bowen gave a state of the athletic department presentation and said he envisioned increasing football season ticket sales as high as 30,000.
He also hoped Memphis would soon see an increase in revenue related to the AAC’s media rights deal. The conference receives $24 million annually from its media partners and it is distributed evenly among the league’s 12 members.
But Rudd, who is a member of the committee helping the AAC in its ongoing media rights negotiations, emphasized afterward that ticket sales and donations remain the most important aspects related to the overall financial health of the athletic department.
“This is not the wealthiest conference in the country and we’re in the bottom quartile,” Rudd said in March. “We’re getting a remarkable return on that investment but every revenue stream matters.”
Natatorium renovation project update
In addition to the university’s preliminary budget, the Board of Trustees will also vote on a proposal to seek a low-interest financing bond from the Tennessee State Bond Authority in order to help build an upgraded state-of-the-art natatorium on campus.
The school announced in January that the Rose Foundation, named after Memphis businessman and philanthropist Mike Rose, had made a $1 million commitment for the natatorium renovation project, which is in conjunction with Memphis Tiger swimming and Splash Mid-South as well.
Rudd said in January that Rose expressed before his death last April a “desire to have a natatorium that truly meets the needs of our community.”
According to university documents that will be presented to the Board of Trustees, two state-funded capital maintenance projects for pool repairs and roof replacement, which are expected to total $7 million, will be combined with $6 million in gift funds for the Student Recreation and Fitness Center improvements and presented to the State Building Commission for approval next month.
The bond will be repaid from the gift funds within five years.
Planned renovations include increasing the pool length, improved mechanical and water handling systems, handicap access, upgraded locker rooms and expanded seating. The increased seating will allow the facility to host more regional swimming competitions. Renovations are expected to take about 18 months.
The plan is to develop “a robust aquatics program in the heart of Memphis to promote water safety and enrich community health and provide instructional and recreational swimming access among diverse populations,” according to the university.