If your football stadium can only host 25% to 50% of total capacity, which major donors and season ticket holders get the right-of-way?
Athletics Veritas is a weekly series aimed at helping higher education executives, faculty, and other stakeholders stay tuned in on trending national issues impacting college athletics, especially NCAA Division I. Athletics Veritas is created by senior DI athletic administrators around the nation.
The Limited Seating Capacity Conundrum
Division I Schools are beginning to map out their revised football stadium capacities due to physical distancing protocols.
University and athletic department leaders need to be thinking about donor and season ticket holder relations more than ever.
Difficult conversations lie ahead for long-time donors who won’t get their usual seats and access.
NCAA has waived FBS attendance minimums for next two years.
Tax implications, donation strategies, and school loyalty are at stake this fall.
The pandemic’s stress on college athletics is being quantified in many ways. One formula being assessed by Division I athletic departments involves what the physical distancing standards will or should be in large stadiums once college football returns -- even in stadiums capable of holding 100,000+ spectators.
Ohio State University Athletic Director Gene Smith recently told CBS Sports, "We have played a little bit with the social distancing concept. We know that will probably take us down south of 30,000 fans in the stands, actually closer to 20,000-22,000. We've played with that a little bit as a framework to start.” This reassessment at Ohio State acknowledges the reality that the Buckeyes stand to forfeit millions in lost revenue.
In terms of keeping the customer base happy, when an institution can only allow an estimated 25 to 50% of its normal fanbase into home games, difficult conversations will need to be had with longtime donors and season ticket holders. If university presidents, chancellors, chiefs of staff, development directors and finance VPs have not put this on the virtual meeting agenda yet, they should. Game-planning for football attendance this season will be a timely topic for university leadership, who should take the opportunity to bring in the athletics director and athletics development lead to vet rollout, messaging, and donor and season-ticket holder relations.
From an NCAA membership requirement standpoint, Division I schools have been given a two-year reprieve on football game attendance requirements thanks to a waiver of Division I Bylaw 20.9.9.3 granted by the Division I Council Coordination Committee. As a result, FBS institutions will not be required to average at least 15,000 in actual or paid attendance for home football games, which has been a longstanding membership requirement for FBS.
It could be said that college football was due for a course correction in regards to seating capacity. At college football stadiums across Division I, attendance requirements were being scrutinized prior to the pandemic for being too large, especially in light of the dips in live spectators nationwide. Sports Illustrated reported in January -- a couple of months before the pandemic hit the USA -- about the continued trend downward in college football attendance noting that sporting events at all levels (e.g., MLB, NFL) were seeing attendance contractions. For several marquee college football programs, introducing in-stadium alcohol sales has been a means to mitigate lost ticket revenue from less fans coming through the turnstiles.
One of the most intriguing data points on college football attendance is what the Wall Street Journal reported in 2018: only 71% of individuals who purchased college football tickets actually attended the games.
Will there be more people willing to purchase single-game or season tickets for the upcoming 2020 season knowing they cannot attend the game(s) even if they wanted?
Will donation strategies and tax write-off implications come back into focus when, instead of purchasing actual tickets, donors and longtime season ticket holders may only want to purchase their seat-license this fall to maintain the right to purchase seats for a future season?
Tax write-off opportunities for college sports seat licenses were pulled back by the IRS when the tax code changed in 2018. Perhaps the IRS could be lobbied for a one-year reprieve to its restriction on writing off seat licenses when those making such donations are more likely not to receive tickets to attend games.
These are the million-dollar questions weighing on Division I institutions and their football programs.
Athletics Veritas is presented for information purposes only and should not be considered advice or counsel on NCAA compliance matters. For guidance on NCAA rules and processes, always consult your university’s athletics compliance office, conference office, and/or the NCAA.
