School stadium stimulus
Big high school football stadiums in Texas have come under scrutiny from local fiscal watchdogs, but pushback is just part of the story about sports facility finance—where expenditures and potential revenue sources have grown more complex and potentially lucrative.
Critics say palatial athletic facilities prioritize sports over the classroom and waste taxpayer money. But supporters say they are a source of pride and promotional value for a region, and an important resource that can be used for school and community activities. Stadiums also generate revenue from advertising, naming rights, booster fundraising and television deals.
The most publicized—the $60 million Eagle Stadium at Allen High School in Allen ISD near Dallas—earns about $1.5 million each year from its consistently undefeated team, which packs all 18,000 seats for most games.
And at many stadiums nationwide, most of the money generated from sports goes back into the school’s general fund or supports other extracurricular activities, says Tom Canby, associate executive director of government relations for the Texas Association of School Business Officials.
“Districts are looking for any funding source possible” Canby says. “There are very few districts where sports pay for themselves, but today they can create more revenue.”
Communities back big stadiums
Football—particularly in Texas—is likely to have the most detractors because it has a reputation there for exorbitant spending, says Roger Abrams, a law professor and expert on sports law and author of the book Playing Tough: The World of Sports and Politics.
“You and I would not be talking about this if the school district was spending millions for a new science building” he says. “It’s a story because it is about sports. The community supports it, and if they want to spend $60 million on a stadium, it is really up to them.”
That’s what happened seven years ago, when voters approved Eagle Stadium in Allen, which also includes a state-of-the art video scoreboard. The stadium, paid for with a $120 million bond that also helped build a $30 million performing arts center, a bus depot and food storage facility, is also used for PE classes, wrestling matches and golf team practice, says Tim Carroll, an Allen ISD spokesperson.
Nearly 100 students work at its 32 concession lines, and more than 80 percent of the high school student body attends games. The school’s football team has been the state champions 2011 to 2014 and has an 800-member marching band.
And, Carroll says, it anchors a community that has doubled in size in a decade, has family income twice the national average and loves football. The school sells out the roughly 8,300 season tickets every year at $40 each, he adds.
Revenue from the stadium—around $1.5 million—goes into the general fund to help pay expenses for football and other sports, Carroll says. Revenue includes $450,000 from four large concession stands (the previous stadium netted $70,000), $330,000 from season-ticket sales, and around $400,000 from ticket sales.
The district chose not to sell naming rights, but it gets $15,000 to $35,000 from sponsors for advertising space, season tickets, mentions in PA announcements and “roaming rights” to distribute promotional material.
About seven miles north of Allen, a more expensive stadium is under construction at McKinney ISD after voters in May approved a $220 million multipurpose construction bond. The 12,000-seat facility will replace a 7,000-seat stadium that was built in 1962 for one school and is now shared by three high schools.
Meanwhile, Katy ISD in the Houston suburbs, where school enrollment has doubled since 2010, is building a $62 million facility with 12,000 seats that will be used by seven high schools. The original stadium, built in 1982, seats 10,000.
What’s in a name?
After ticket sales, the most common sources of revenue are advertising and sponsorships, which can reach $150,000 a year, says Jeff Bertoni, president of sales for Market Street Sports Group, which sets up such business opportunities for districts.
And stadium naming rights can be even more lucrative. That trend has migrated from professional sports to college, and now hundreds of high schools are getting in on the action, says Josh Boyd, a professor at Purdue University who specializes in corporate sponsorships.
Such agreements have brought $50,000 to $250,000 to districts.
For instance, over the past 10 years, Gloucester High School in Massachusetts has made $500,000 from New Balance for combining the original stadium’s name with the shoe company’s: It’s called the New Balance Track and Field at Newell Stadium. New Balance’s deal with Gloucester High School provided $50,000 over 10 years to repair a deteriorating stadium.
A local car dealer has naming rights in at least one Texas stadium. New Caney ISD sold naming rights for $60,000 per year until 2019 to help offset the cost of its new $20 million stadium.
And in New Hampshire, Laconia High School supporters raised $1 million with donations toward its $16 million football stadium and renovations to the high school. About $250,000 of it came from Bank of New Hampshire for naming rights.
“Only a very few, highly successful football programs with large seating capacities and proactive corporate partnership arrangements could even come close to paying for themselves,” says David Pierce, a Indiana University professor of sports management who wrote a detailed study of high school sports funding. He says football is the sport most likely to earn what it spends.
Scoring with screen time
Other schools have smaller budgets for facilities and fewer revenue streams. Whittier Union High School District in California opened two new stadiums recently, each costing about $19 million. “It was not part of our equation to bring in income from this facility” says Superintendent Martin Plourde. “But our community has considered it an excellent investment.”
The board preferred to name both fields after administrators and rejected advertising because it might have meant allowing ads with messages contrary to what school officials or parents find acceptable, Plourde says.
Other districts promote advertising openly. Rock Hill School District in South Carolina offers $3,500 for a founding partnership and $1,500 for a premier partnership that include advertising throughout the stadium, a presentation during the coin toss at the start of a game, and promotional opportunities at other school activities.
At some of the newest stadiums, advertising is displayed on high-tech video scoreboards, which are quickly gaining popularity, says Mike Daniel, president and CEO of Sportable Scoreboards.
“It’s a trickle-down from professional and college teams” Daniel says. “The kids are getting the equipment that the professionals have now, and they and their parents expect the scoreboard to keep pace, too.”
To help high schools pay for scoreboards, which he says cost about $45,000, the company will install one and take a portion of the advertising revenue or will lease the equipment to the district.
Daktronics, another large scoreboard manufacturer, estimates that schools earn an average of $200,000 with new technology that allows for video advertising on the larger, constantly changing screen.
Meanwhile, television broadcast deals can be another source of revenue for schools, says David Rudolph, CEO of PlayOn Sports, which broadcasts more than 30,000 high school games each year. Broadcasts have grown 35 percent in the last two years.
PlayOn contracts for media rights with state athletic associations, who then pay schools with the most broadcasts up to $7,000 a year. They also contract directly wit