NCAA Final Four Updates04/03/08 The NCAA won't lose money on the Final Four this weekend in San Antonio. But there's a chance the teams playing – North Carolina, Kansas, UCLA and Memphis – will. "We lost money being in the Final Four," said Oklahoma athletic director Joe Castiglione, whose Sooners reached the national semifinals in Atlanta in 2002. "I know that's hard to believe." That's because the NCAA, a nonprofit organization that serves as the governing body of intercollegiate athletics, has several mandated costs that schools in the Final Four must pay. Everything from a $32,000 party – whether or not a school wants the party – to an increasing number of hotel rooms the schools are required to fill.
More men's NCAA Tournament Meanwhile, the ticket allotment provided to each school has been reduced by the NCAA in the last several years, with fewer seats close to the floor. If schools want to get their hands on more or better tickets, there's a good chance they will pay inflated prices thanks to a contract the NCAA has with the ticket service RazorGator.
Schools' concerns "I'm just eager to have a discussion to understand things better – why the ticket allotments are down, why the best seats in the ticket allotment are gone, why we have to pay for the party if we don't necessarily need it, and about this relationship with a secondary ticket broker." Mr. Baddour is not the only one. Other athletic directors say they were never briefed about the NCAA's relationship with RazorGator, which began last year. They have concerns that while their ticket allotments are shrinking, some of the best seats at the Alamodome this weekend are being scalped by the NCAA. With tickets provided by the NCAA, Santa Monica, Calif.-based RazorGator is offering dozens of seats – available at RazorGator.com – in the lower arena of the Alamodome at five times their face value of $140 to $220. The NCAA would not disclose how many tickets are made available to RazorGator, nor would it say how much revenue is generated or how it is divided between the NCAA and the company. "We have some concerns about that relationship," said Kansas associate athletic director Jim Marchiony, who worked for the NCAA for 18 years. "We look forward to sitting down with the NCAA to hear an explanation about why the RazorGator system is in place and how it works. We definitely have some concerns."
Ticket money "Over a five-year period, we studied that people who had the opportunity to buy tickets were often reselling," said Greg Shaheen, senior vice president of basketball and business strategies for the NCAA. "Our biggest concern was the illegitimate arrangements for counterfeit tickets." Mr. Shaheen, who presides over the NCAA Tournament as well as the NCAA's 11-year, $6 billion television contracts with CBS and ESPN, pointed out that 95 percent of money collected by the NCAA goes back to member schools. Only $30.7 million – 5 percent of the NCAA's $614 million budget in 2007-08 – was used for the organization's operating costs. Almost 90 percent of the NCAA's revenue comes from television and ticket money generated by the men's basketball tournament. The NCAA pays travel expenses during the tournament for each school – up to 100 people – beginning with the first round. The NCAA also pays each team's conference $191,000 each of the next six years for every game won, up to five games. And while athletic directors don't question that Mr. Shaheen and other NCAA officials want what's best for member schools, they wonder if the execution of the Final Four might need some tweaking.
Rooms, fewer seats This year, the NCAA is providing Final Four schools with 3,750 tickets, most of which are nowhere near the court, while requiring them to pay for 470 hotel rooms ranging from $123 to $213 with the four-night minimum stay. "The NCAA is requiring schools to pay for more hotel rooms, while giving them less tickets," Texas athletic director DeLoss Dodds said. "And then when you factor in this secondary ticket market, it's not a logical sequence. It doesn't add up."
Assessing the losses He said UT would have lost even more money at this year's Final Four had the Longhorns beaten Memphis in the South Regional final last weekend. That's because Texas would have been required to pay for 470 hotel rooms for four nights in San Antonio, only 80 miles from campus. Many UT fans probably would have driven in from Dallas and Houston the day of the games. Mr. Castiglione said Oklahoma lost $200,000 in 2002 because the school got stuck with hotel rooms blocked off by the NCAA near Atlanta's Hartsfield-Jackson International Airport, far from the Georgia Dome, site of the games. Mr. Shaheen said the NCAA typically provides schools in the Final Four with two hotels near the airport and one downtown. "Atlanta had a hotel glut after the [1996] Olympics," Mr. Castiglione said. "So many of our fans got good rates at hotels near the Georgia Dome. Instead of paying $159 a night out at the airport, 30 minutes from downtown, they were paying $99 a night to be right in the middle of the action. We were at a competitive disadvantage, and ended up paying for a lot of hotel rooms we didn't use." Kansas angered many of its fans during the 2002 Final Four by requiring those who bought tickets through the school to also buy hotel rooms near the airport. "We no longer tie tickets to hotel rooms," Mr. Marchiony said.
Pay up to party "We are going to throw a couple of parties on the Riverwalk because we want to give our people that experience," he said. "Because we have to pay the $32,000 anyway, we'll throw a third party [in the convention center] for some of our fans who can't make the other parties." Added Mr. Marchiony, "The NCAA's party didn't work for us as it was originally structured, but we're talking to organizers about trying to make it work." For the $32,000, schools get a choice of four types of finger foods and a cash bar. For decorations or more elaborate food, the price goes up. Mr. Shaheen said any short-term losses are recovered later by increases in merchandise sales, fundraising and enrollment thanks to the Final Four's exposure. He cited a study by George Mason professor Robert Baker showing that George Mason's 2006 Final Four run resulted in a 52 percent increase in fundraising, a 40 percent increase in out-of-state applications and $6.8 million in free media exposure. Mr. Shaheen said the NCAA is trying to make things simple for Final Four teams by securing hotel space and party space well in advance, so schools aren't forced to scramble and risk being left out. Mr. Baddour said he appreciates the NCAA's intentions The NCAA says it is trying to make life easy for the schools participating in the Final Four by arranging items ranging from hotels to party sites in advance. But the schools worry about losing money because of costs built into the event by the NCAA. Here's a look at some of their concerns: •Schools are required to pay for 470 hotel rooms, usually at two airport hotels and one downtown, with a minimum four-night stay. That's up from five years ago, when schools were required to pay for 400 hotel rooms. •Schools are allotted 3,750 tickets, down from 4,500 five years ago, and most of the seats are not in the preferred lower arena. •While some of the best seats have been removed from ticket allotments provided to schools, the NCAA has entered a relationship with the ticket service RazorGator. The NCAA gives RazorGator large blocks of tickets, including hundreds near the court, to be sold at inflated prices. The NCAA then shares the revenue from those sales with RazorGator. •The NCAA requires each of the Final Four schools to pay for a $32,000 party in a ballroom reserved for them, whether or not the schools want the party.
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