HOW TO MONETIZE EVERY INCH OF YOUR STADIUM AND PISS OFF SOME OF YOUR FANS IN THE PROCESS

For a few weeks now I have been trying to make sense out of the seating controversy at Texas A&M’s fancy new stadium. Let’s just say, it’s not easy.

This much we know: In 2013, A&M decided to recast historic Kyle Field so it was bigger and more lavish than any of the other stadiums in the SEC. Perhaps cheekily, it called these upgrades a “renovation,” though how it is possible to spend $485 million renovating anything is a mystery to me. This is not unlike Wall Street tycoons who build $30-million dollar oceanfront palaces and then insist on calling them cottages.

In any event, A&M redid the stadium from footers to press box, adding thousands of seats in the process. Kyle field now seats 102,512 fans, which is about 1,000 more than SEC rivals, Alabama and Tennessee. More to the point, Kyle Field is now larger (again by about 1,000 seats) than its hated rival, The University of Texas, bragging rights in the colony of Texas apparently standing for everything.

As best as I can determine, A&M turned over seating and ticketing years ago to the 12th Man Foundation, a tax-exempt organization whose purpose includes paying for athletic scholarships and ensuring that A&M athletic facilities are continually improving. As A&M’s Athletic Director Eric Hyman has said, “If you ever think you’re there and become complacent, your competition goes flying by you.” This is very much state-of-the-art thinking among athletic directors at major football powers, who seem lost if they aren’t spending hundreds of millions of dollars on new football stadiums or other amenities. Witness the University of Oregon, which recently laid out $70 million dollars on a football performance center (with really, really fancy locker rooms and a weight lifting area with Brazilian Ipe hardwood floors) and $42 million on what is basically an elaborate charter school for football players and other Duck athletes.

But I digress. With a new stadium and $485 million in debt, A&M and the 12th Man Foundation needed some serious cash. One solution was to “reseat” the fans in the stadium. Reseating a stadium is a term of art. Think of a host mixing up the guests at a dinner party, only in this case the guests are paying large sums of money to be at the table. In effect, the foundation was re-valuing its seats so it could sell them at a higher price and recoup more money.

Where it got tricky was that some of the fans had previously paid the foundation tens of thousands of dollars in endowments to secure their seats. How one can "endow" a football seat is another conversation; see the chapter on taxes in BILLION-DOLLAR BALL. Really, these payments resemble a personal seat license, guaranteeing fans a seat for a defined period of time, though athletic directors don't like to use that term because it has certain tax implications. Fans were also required to make an annual “donation” to secure their seat, above and beyond the endowment, and also had to cover the cost of the ticket itself.

A number of fans sued to stay put. One A&M alumna said she had purchased a seat near the 15 yard line in the second deck for about $30,000. Under the new seating plan, she contended she would have to pay an additional $40,000 over 15 years to hold onto the seat, according to her lawsuit and various newspaper accounts. The suit was dismissed over issues of standing.    

The 12th Man Foundation Web site says all of the seats for the 2015 season have been secured, so maybe all of this is a moot point. In the SEC generally, and Texas specifically, it seems as though there is never a shortage of fans willing to spend thousands of dollars, and sometimes tens of thousands of dollars, to attend football games. Knowing that, why wouldn’t the folks controlling the seats jack up the prices, especially when they have a shiny new stadium with a $485-million dollar mortgage to cover?

 The football-centered business model of college sports demands that elite programs monetize their stadiums. The endowments and mandatory seat payments account for roughly one-third of the growing piles of cash schools take in. Take that away and the entire system crashes.