The diverse set of revenues supporting Intercollegiate Athletics’ facilities financing continued to grow through the first quarter of the 2014 fiscal year with additional revenue anticipated to be realized later in the year.
Not only did the number of Endowment Seating Program (ESP) pledge seats sold increase by 76 during the three months from July 1 through Sept. 30, but premium seating revenue hit a new quarterly high and the Haas School of Business launched an Innovation Lab (iLab) in August through a long-term lease agreement at California Memorial Stadium.
In addition, since the close of the first quarter, a Recreational Sports fitness facility available to all students, faculty and staff opened with its own long-term lease, and on Dec. 5, field naming rights at California Memorial Stadium were awarded to Kabam, worth approximately $18 million in gross revenue over a 15-year partnership with the campus.
“The financial plan relies on a diversified portfolio of revenue-making activities, including seat sales, field naming rights, stadium leases, rental income, investment returns and philanthropy,” Vice Chancellor for Administration John Wilton said. “The results in the first-quarter report show that many of these revenue opportunities are being achieved. As part of our broad approach to help ensure that Intercollegiate Athletics remains fiscally responsible for its financing obligations, we will continue to search for unique and innovative opportunities that support the overall student-athlete experience.”
The broad-based financial model for both Memorial Stadium and the adjacent Simpson Center for Student-Athlete High Performance, which was created nearly a year ago and reviewed by members of the faculty at the UC Berkeley Haas School of Business, shows that the plan succeeds in all but the worst circumstances. At the close of the 2013 fiscal year, the balance of the Fund Functioning as an Endowment (FFE) totaled $54,713,901, a figure more than $2 million above the base-case expected. The base case represents a mid-point in terms of the return on the FFE and other assumptions.
The current quarterly report has been reconfigured to align with the important metrics of the updated model, showing a comparison of data from the first quarter of FY14 to those of FY13. Moving forward, results will be reported biannually after the conclusion of the second quarter and fourth quarter each year. The reports will continue to evolve to make them more useful as a contemporary management tool.
During the first quarter of the 2014 fiscal year, Intercollegiate Athletics collected $797,739 in ESP pledge payments. Total pledge seats sold rose during the period to 1,856 seats. Despite this increase, the revenue collected declined compared to previous first quarters. However, payments are erratic early in each fiscal year because payments are due in April, meaning the bulk of revenue is not owed until the third and fourth quarters. It is best to view this metric annually over time (ESP revenue has exceeded $11 million each of the past four full fiscal years).
The first-quarter report also shows 2,204 full-season equivalents sold in the premium sections, a 180-seat increase from the end of the fourth quarter of FY13. The $422,298 collected from premium seat revenue (premium groups, corporate bundles and perk tickets) set a new high for one quarter of sales activity. Bundle seats sold also increased by 30 seats during the last quarter.
Lease revenue from both the iLab and the Rec Sports facility are scheduled to generate rental revenues to IA later in FY14. Together, they account for approximately 8,000 square feet of rented space. In addition, a broad-based campus committee is reviewing other proposals for leasing areas within Memorial Stadium, which are intended to achieve IA's goal of making the venue a truly multi-use, year-round facility serving both an academic and athletic purpose for the benefit of the entire campus.