The University of Maryland athletic department could face a number of challenges as it strives to overcome multimillion-dollar deficits — detailed Tuesday in a school-issued report — and become competitive in the Big Ten, which the Terrapins will join in 2014.
According to the report, Maryland will need to rely heavily on three revenue streams to get out of debt and become financially viable: conference payouts, ticket sales (especially for football games) and fundraising. Of those, only one — the money the university will receive from the Big Ten’s financially lucrative television contract — is seen as a given. The school’s ability to achieve success in the other two is more uncertain, given that ticket sales are capped by the number of seats available and the school’s fundraising efforts have lagged in recent years.
Last year, Maryland’s football team averaged just 36,022 fans per game, which would have ranked 13th in the Big Ten if including future member Rutgers. But it’s not only a question of getting more fans to the games; there’s also the matter of Byrd Stadium’s size. The stadium, which opened in 1950, seats just 54,000, which would rank 10th in the Big Ten.
“The number one revenue producer is ticket sales. What drives that train is football,” said Dan Fulks, a professor of accounting at Transylvania University in Kentucky who also has served as a financial consultant to the NCAA. “Maryland doesn’t have much room to increase ticket sales. The difference between what they made this year and selling out every game isn’t a lot of money.”
In a telephone interview Tuesday, shortly before the report was publicly released, Maryland Athletic Director Kevin Anderson expressed enthusiasm over future season ticket sales, despite the commission’s report that “actual [past] football ticket sales fell short of projections.”
According to a Maryland spokesman, the school has sold 17,339 football season tickets for this season, up from 15,766 sold by this date last year and an increase of nearly 10 percent.
“I am optimistically encouraged,” Anderson said. “I will say that I know we can do even better. Going into the season, and what we’ll be able to do on the field, will just encourage people to look at purchasing tickets. I’ve been telling my staff and everybody, I hope the folks who have given up on us, they look at us and at least give us another chance. At least those who are waiting, I hope they don’t wait too long. Going into the Big Ten, I know we’re looking at increased ticket sales.”
Maryland also could generate revenue by selling home games to nearby professional stadiums, but the benefit from that practice also is limited. According to a contract obtained through an open-records request, Maryland will earn $3.5 million for each game held at M&T Bank Stadium in Baltimore, where the Terrapins are scheduled to play West Virginia this season and Penn State in 2015. But only one of those games can be scheduled per year, as the football team is contractually obligated to host six games at Byrd Stadium each season.
The school also faces an uphill climb in terms of fundraising. According to a 2011 report by a university commission, the athletic department’s fundraising declined by a total of $6 million from 2008 to 2011. The school will need to rely upon fundraising to build new athletic facilities seen as necessary to compete in the Big Ten, as both the 2013 commission and Maryland President Wallace D. Loh said that revenue generated from the school’s new conference affiliation will not be used for new construction.
“You take a school like Michigan, which has more alumni than any school in the country,” Fulks said. “Maryland has never been a huge school, and athletics has not been supported well by Maryland alums. They’ve got a ways to go there.”
University officials remain steadfast in the projections, confident they made the right decision to depart the ACC for the wildly profitable Big Ten. But Fulks, who received his MBA from Maryland in 1975, isn’t so sure that the move will be a success.
“It hurts me to say so, because I’m a Maryland fan and was there for some pretty nice years, but I’m just not optimistic,” he said. “Primarily on the revenue side, two of those three revenue sources, they’ve got major problems with the ticket sales and fundraising. It remains to be seen how much money they get from the Big Ten Network. That by itself can’t turn it around, but it certainly can help.”