Gamecock Athletics Mean Big Business

The business of sports at the University of South Carolina

By Bob Gillespie

photo courtesy SC Athletics

Kevin O’Connell stands up from his desk, motions to a visitor to follow him, then picks up a 5 foot-by-3 foot chart showing the geographic footprint of the University of South Carolina’s athletics Master Plan, a growing complex of buildings and sports facilities bordered by Columbia’s Heyward Street, South Marion Street and Rosewood Drive. He strides from his third-floor office at U.S.C.’s still-new Rice Athletics Center, across a reception area from athletics director Ray Tanner’s office, and out onto the McBride Terrace, which overlooks much of the school’s Athletics Village.

Kevin, U.S.C.’s executive associate athletics director charged with overseeing the athletics department’s ongoing construction projects, could simply indicate details on the chart, of course. But he obviously figures seeing it for real, from on high, will give the visitor a sense of the size, scope and magnitude of what Gamecock sports is creating. And he’s correct.

He first points toward the Dodie Anderson Academic Enrichment Center, a $13 million investment that former U.S.C. athletics director Eric Hyman called “the hub” of the Athletics Village and the first of the new projects to be completed in 2010. The Rice Center, across from “The Dodie” and home to coaches and administrators, ran a cool $11.65 million. Nearby is a five-story parking garage that, Kevin says with a chuckle, “We paid extra for ($7 million total) so it wouldn’t look like a garage.”

He notes U.S.C.’s newly completed softball stadium ($8 million for 1,400 seats, press box, meeting and locker rooms, etc.); new tennis courts and locker rooms/meeting rooms ($1 million); the outdoor track, soon to undergo a $10 million facelift; and, running through the heart of it all, the Athletics Village Plaza and The Promenade, a tie-it-all-together beautification costing $16.6 million.

On the horizon stands Williams-Brice Stadium, with its new Farmers Market parking area, where a new indoor football practice facility ($14.5 million) and new outdoor football fields ($3 million) are on the books. For fans, a $14 million plaza project will make the stadium area a more user-friendly game-day experience.

Other projects include a $2.5 million soccer building adjacent to Stone Stadium, conversion of U.S.C.’s current indoor football facility to an indoor track ($10 million), a men’s and women’s basketball practice facility that is currently a large hole in the ground near the Rice Center, and, finally, a $1 million sand volleyball area for U.S.C.’s 21st sport. Baseball fans, of course, already know the 9,000-seat Carolina Stadium, a $35.6 million catalyst for two College World Series titles (2010 and 2011).

Kevin pauses while it all settles in – $200 million of it, which doesn’t include the additional $52 million in projects Ray Tanner pushed through during a March board of trustees meeting. “These things go into a pipeline,” Kevin says. “It’s about a three-year process for approval and construction.” The building binge came after a two-year (2005-2007) planning period, he says.

Funding for all those capital improvements comes from $6 million per year from the athletics department’s YES donations (fees for premium seat assignments at Williams-Brice) and recent increases in Southeastern Conference TV revenues due to conference expansion, also about $6 million per year. Too, the department’s development staff has ramped up fund-raising efforts, all of it helping pay off loans approved by U.S.C.’s board of trustees.

The building will continue, too, especially for football. A 2009 feasibility study on improvements to Williams-Brice by Atlanta firm Heery International and Columbia-based Jumper Carter Sease – the stadium’s own master plan – projects future expenditures of $230 million to $330 million on the facility’s 1.074 million square feet. No time frame is set for that work, but “it’s all to come,” Kevin says.

Talk about a growth industry. U.S.C. these days has more cranes dotting the horizon than in a marshland bird sanctuary. The athletics department’s annual budget ($87.6 million) is a drop in the bucket compared to the university’s ($1 billion), but for Columbia, it all adds up.

“When we started construction, the economy wasn’t doing well, so this has been an economic boon to this area,” Kevin says. “We employed a lot of architects, engineers, sub-contractors; a lot of people are working as a result of the money we’re spending to build new facilities and update older ones.”

He adds with a chuckle, “There are a lot of grateful people in the construction business.” In fact, a formula provided by Jeff Lamberson, U.S.C. director of design and construction, estimates that each $1 million in construction translates to 20 jobs for the life of a project, meaning the athletics department has been or will be responsible for about 5,000 workers’ paychecks, some lasting until 2016.

Based on those numbers alone, U.S.C. sports would be a driver of business for Columbia and the Midlands if the only thing the athletics department did was erect facilities. But of course, that’s only part of it.

For decades, especially during the Gamecocks’ two-decade membership in the sports-crazed SEC, the economic impact of 80,250 fans at Williams-Brice on fall Saturdays has been a given. For fiscal year 2011-12, U.S.C. football income (tickets, SEC and TV revenues, etc.) generated about $49.6 million, with a profit of $27.4 million – by far the largest money-maker in the athletics department’s $87.6 million budget.

That impact also spills over to Columbia and the Midlands. In 2004-05, a study by U.S.C.’s Department of Sport and Entertainment Management found football had a total economic impact of $42.2 million ($5.2 million for each of eight home games), which included employee compensation of $12.1 million and indirect business taxes of $3.1 million. A more recent update, adjusted for inflation, bumped those numbers to $50.13 million ($6.26 million per home game), $14.3 million for compensation and $3.5 million in business taxes.

Tom Regan, associate professor in Sports and Entertainment Management and the school’s economic-impact go-to guy, points to football spending numbers of $67.40 per local fan and $162.20 per visitor, on food and drink, lodging, tickets, gas and souvenirs.

“Williams-Brice is the cash register for all the other sports,” Tom says. “When U.S.C. entered the SEC, the Gamecocks were included in the best TV/media deal at the time in college sports, which enabled them to do a lot of things business- and facilities-wise.”

And those survey numbers might be low. Kevin points to a 2011-12 University of Arkansas study that put the annual statewide economic impact of all Razorback sports at $153.6 million – annually. “We are probably 10th (out of 14 schools) in terms of total revenue,” Kevin says. The bottom line varies annually depending on what U.S.C. puts back into facilities; the school showed a $465,355 profit (revenues vs. expenditures) for last year, he says.

Still, the SEC demands as well as it gives. “To keep up, you have to invest in facilities,” Tom says, “and U.S.C. has done that starting under former athletics directors Mike McGee and Eric Hyman and continuing on to now.”

Facilities enable coaches to recruit top athletes, which often translates to on-field success. Football coach Steve Spurrier, coach of the back-to-back 11-win seasons in 2011 and 2012, was an early critic of what he found at U.S.C. when he arrived in 2005. Now, the Head Ball Coach is a vocal fan of the school’s facilities growth. Successful seasons in football, baseball and Dawn Staley’s back-to-back women’s basketball NCAA Tournament bids also have helped increase attendance, merchandise sales and fan loyalty.

There’s also a publicity quotient that’s hard to measure, says Jeff Tallant, chief financial officer for the athletics department. Bowl games are largely a break-even deal (U.S.C., after expenses, earned the same 1/15th share as the rest of the SEC schools). “That covers your cost,” Jeff says, “but the exposure … what’s the impact of beating Michigan in the Outback Bowl, or the Jadeveon Clowney hit? There’s no way to put a dollar figure on that.”

The same is true of the presence of Steve Spurrier and, before him, Lou Holtz on the sideline. “Even with the economy being down,” Kevin says, “having Spurrier, a household name in college football, helped us maintain momentum.” Besides improved recruiting and on-field talent, that manifests itself in the Gamecocks’ 58 appearances on ESPN’s family of channels, including six Thursday night season openers, and 13 CBS appearances during Spurrier’s eight seasons (in Holtz’s six seasons, U.S.C. made 23 ESPN appearances, five CBS and one ABC).

Yet just winning games isn’t the final answer: witness falloffs in football season ticket sales in recent years due to rising ticket prices, increased Gamecock Club dues, fees for priority seating and the sagging economy. “Plus we’re on TV about 12 times a year, which maybe is a reason ticket sales are down,” Jeff says.

Thus, U.S.C. makes it a focus to work at marketing the SEC product, rather than assuming the product sells itself. Eric Nichols, head of the athletics department’s sports marketing division (he held a similar post at Vanderbilt before coming to Columbia), says he’s seen his job change with the economic downturn.

“When I got here in 2008, my main job was to recruit basketball ticket sales (filling up the Colonial Life Arena remains U.S.C.’s major-sports bugaboo) and helping with the football game-day atmosphere,” the 39-year-old Memphis native says. “Now it’s still basketball – we haven’t solved that riddle yet – but obviously we have football season tickets to sell.”

Doing so starts, Eric says, with “breaking through the 25-plus years of being sold out” at Williams-Brice. “We still run into people who assume you can’t get a ticket.” U.S.C. employs such cutting-edge methods as digital social media – Facebook, Twitter and others – along with more traditional billboards, TV and radio, and has targeted markets for growth in Charleston (the most promising), Greenville and Charlotte.

While sales of U.S.C. logo merchandise fall under another department, Eric spends time researching the “branding” of the Gamecocks via clothing, caps and so forth. “We’re trying to leverage the ‘hot’ markets – the baseball championships, the 11-win football seasons – to create opportunities,” he says. “You have to be nimble these days to execute messages quickly, which is where social media helps us.”

As an example, Eric says that after the department began handing out “rally towels” to students before football games, “we saw chatter on social media that other people really loved them, too. The following year, we provided those at a few games; now, it’s most if not all SEC games.” Eric also played a hand in U.S.C.’s ubiquitous playing of the anthem “Sandstorm” over the public address system at games. “We saw that after the playing of ‘2001’, everyone sat down, and we lost excitement,” he says. “We like it that during ‘Sandstorm’ you’ve got kids and grandparents all up and jumping around. Our goal is to keep people entertained all the time.”

The impact of that marketing: U.S.C. in 2011-12 brought in about $3.5 million in licensing fees, or nearly double the $2 million it reaped in 2008, and seven times the $500,000 in royalties from 2001-02.

“It’s unfair to say it all is through this office,” Eric says, “but sports marketing’s share of our budget, minus SEC money and capital fundraising, yields roughly 70 percent of revenue. That includes ticket sales and sponsorships.” U.S.C. has about 120 of the latter, ranging from Coca Cola and Verizon to smaller deals.
From giants to mom-and-pops, it all adds up.

Overseeing U.S.C.’s burgeoning sports empire, for the past seven months and into the foreseeable future, is the affable Ray Tanner, previously best known to Gamecocks fans as the school’s baseball coach for 17 years and the man who delivered back-to-back CWS titles in 2010-11.

When Ray replaced Eric Hyman, who was the architect of U.S.C.’s athletics master plan, some skeptics wondered if that meant the school planned to sit back and enjoy the fruits of Eric Hyman’s labors, which – when he initiated priority-seating and ticket-price hikes and raised Gamecock Club dues – made him something less than popular with fans. Ray gets it that some observers might have thought, with his quick hiring by U.S.C. president Harris Pastides and his baseball popularity, that the school was opting for a time of warm-and-fuzzy assimilation.

The reality, Ray says, is quite the opposite, as his recent proposals for $52 million in new projects indicates. Others in the department agree.

“Eric made a lot of difficult decisions in the beginning,” Kevin says, “and there has been a transition with Ray coming off the baseball field. But make no mistake: He’s a very astute businessman. He knows numbers, he’s politically wired, and he’s making difficult decisions as well,” among those raising football season ticket prices for the first time since 2008.

Harris Pastides, resisting the “urge to say I told you so,” says he believed he had an athletics director “winner” in Ray from the get-go. “He has more business savvy than people thought, and I’ve already seen great growth in him,” the school president says. “I think he would say he’s better today than the day I appointed him. But I never would have made that decision if I didn’t have faith in his leadership qualities.”

Kevin also credits Ray, along with Steve Spurrier and Dawn Staley, for “changing the outlook of our fan base.” Adds Jeff: “We’re all believers now.”
For his part, Ray says he is determined to be as “on top” of his new job as he was his old one. Indeed, he says, he’s been preparing to do what he now does much of his coaching career.

“It began the summer of 1996, when I was an assistant to LSU coach Skip Bertman on the U.S. Olympic team,” Ray says. “He told me often how important it is for fans to have clean restrooms, hot coffee or cold water, as well as very good teams. You need fans in seats, and they have to have other things besides baseball.”

That theme rings true with his boss, too. Harris says that when he took office, he was most struck by “the importance of doing things high-quality. We have to give fans a good experience, so it’s worth not watching a game on TV,” he says. “We want people to walk away from soccer’s Stone Stadium or a volleyball match and, win or lose, say, ‘I had a good time … even if the score didn’t work out, I’m glad I came.’”

Ray also served a stint while at N.C. State as an administrator, overseeing numerous sports operations. At U.S.C., that quickly became part of his ongoing tutorial as a coach. “I also paid attention to attendance, concessions, the black and red of economics,” he says. “I was always intrigued about what happened in athletics, from football attendance to TV contracts for basketball. I asked a lot of questions, paid attention to Mike McGee and Eric Hyman when they shared information about what was going on financially.”

Since moving into the big office at the Rice Center, Ray has done similar research around the SEC, studying its financial muscle and, especially, some of his peers. He counts Florida’s Jeremy Foley, dean of SEC athletics directors, and Alabama’s Mal Moore as mentors, and says he questions them regularly because, he says, “Who better to ask than those guys?”

But Ray is no shrinking violet during conference get-togethers. “I was extremely confident from the start,” he says. “I paid attention, did my personal research, understood the landscape. Nothing that’s happened in my seven months as AD has been a surprise.”

If anything, Ray has been the surprise. Always a pugnacious competitor on the diamond, he says he’s shifted that approach to administration now.

“You have to be aggressive and progressive at the same time,” he says. “Show me a team that wins a national championship, I’ll show you a team with resources and facilities that enable that to happen. You can’t say, well, we’ll do this in seven or eight years; you want to compete as quickly and successfully as possible.”

If, as many believe, this is the beginning of U.S.C.’s “golden era” in sports – well, Ray says, there’s no time like the present.

If you’re looking for a day-to-day observer of U.S.C. sports’ impact on the surrounding community, it’s hard to find one more interested and involved than Columbia mayor Steve Benjamin. An unbiased observer – well, not so much.

True story: In 2010, on the day he was to be sworn in for his inaugural term, the new mayor was late to his own ceremony. Why? Because that was the same day U.S.C. honored Ray Tanner’s baseball team on its first College World Series title, and Steve was at the Colonial Life Arena with thousands of other fans.

“Yeah, I sure was,” the U.S.C. 1991 undergraduate and 1994 law school grad says, laughing. “Had to go give my guys their due; my blood runneth garnet.”

Still, Mayor Benjamin would be a fan of U.S.C. sports, from a mayor’s perspective, if he’d attended rival Clemson. He calls the national attention showered on the football and baseball teams’ success “a catalyst for economic development, something you can’t purchase. That success serves as an opening for me in economic discussions all across the world.”

Harris, while acknowledging that “it’s not my day job to provide for local merchants,” agrees with Steve on the school’s impact, especially through sports. “It’s a large driver,” he says. “It’s immense gratification when I hear from the merchants that they can’t wait for football Saturdays, or that business goes up 15 to 25 percent, or that before a good basketball game at the Colonial Life Arena, it’s hard to get a seat in the Vista.”

And it’s not all dollars and cents. “I think most of the impact is buried deeper in the statistics,” Harris says. “I think economic impact studies are just the tip of the iceberg.”

Steve agrees, saying the influence of bowl victories, CWS triumphs, even “Clowney’s hit,” go beyond money. “I firmly believe this city’s psyche is intertwined with the Gamecocks,” he says. “When U.S.C. does well, the economy does well; when not, not so well.”

U.S.C.’s building binge, meanwhile, not only provides recruiting ammunition for its coaches but also jobs for local businesses. Success also lures more students – and their wallets – to Columbia. For the capital city, that’s “found money” that is critical.

“Because of state government, U.S.C., Fort Jackson, churches, only about one-third of Columbia real estate is on the tax rolls – think about that,” Steve says. “So the only way we can build our economy is that we’ve got to have construction and students. Without U.S.C. on the rolls to drive the economic engine, we couldn’t have a world-class city.”

That’s Steve the politician speaking. In his next breath, he slides easily into a comfortable fan mode, gushing over Steve Spurrier’s teams and even first-year basketball coach Frank Martin’s prospects. “I really believe,” he says, “the sky’s the limit for U.S.C. athletics.”

Harris, no surprise, concurs. “This is a wonderful era for the university, and I cross my fingers and hope we maintain that and continue to grow our success,” he says.

Ray, too, understands the dual nature of the mayor’s and his president’s words. Indeed, it’s the combination of successful business dealings and sports triumphs that helped draw him to his first job, and his current one.

“It’s a passion, a business, a lifestyle,” Ray says. “But we also get to have fun. And you have more fun when you win more. The resources and facilities give us an opportunity to win more, so it all goes together.

“But it’s not just business at the end of the day. It’s fun, too. I’m fortunate because I love going to work. And I’m still competing: in fund-raising, in trying to win on the court, in the pool, on the field.”

Yeah, it’s fun. And the more fun U.S.C. athletics offers its fans, and Columbia, the better it is for everyone’s business.

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