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CEO Roundtable: Sports & Business

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Springfield Business Journal Features Editor Christine Temple discusses college sports with athletic directors Corey Bray of Drury University, Dennis McDonald of Evangel University and Kyle Moats of Missouri State University.

Christine Temple: The COVID-19 pandemic caused a dramatic shift in university athletics, events and attendance. How have you have managed to keep operations going?
Corey Bray: Well, that is a number that I don’t want to tally up. It’s too depressing. Between lost ticket sales and reduced sponsorship dollars from partnerships, suite sales, concession sales – all those kinds of things – it has been basically nonexistent this year because our conference that we are in did not allow spectators for indoor sports, and basketball is a big driver of that revenue for us at Drury.
Dennis McDonald: It’s certainly been a different year. We did allow spectators for our events. We actually in the beginning said no spectators, but as we got closer to some of our events, the change in the (Centers for Disease Control and Prevention) recommendations were happening at the same time, so we did allow spectators at a very limited number and we did not allow visiting team spectators. That was a conference decision.
Kyle Moats: We were certainly similar. We were able to have fans at 30% of what normal capacity is. We were able to have all of our suites. Our concessions drastically reduced. We did gain some monies, but we certainly weren’t where we were in the past. We felt very fortunate that we were the only ones in the conference that were allowed to have fans. That was an advantage not only competitively, but also from a revenue perspective, that Springfield and southwest Missouri were very different from the other states that we competed.
Temple: Of course, it’s not a number you want to think about, but what was the impact overall on your programs’ total budgets? I imagine that was felt universitywide.
Bray: We had universitywide budget reductions, I am sure just like many other schools around the country, so that was about a 10% reduction right off the top. The lion’s share, so 0% in ticket sales, that is a six-figure number of what we normally sell. We had a couple of suites in O’Reilly [Family Event Center] that were very generous and turned their suite fee into a donation. We got a third of that total that we would normally get. We need to have continued conversations with our corporate partners on that front of what we have been able to activate this year and what we can do with those agreements, but that is going to be less than 50% for sure of what we normally get. Those are pretty big numbers.
McDonald: For us, I think that you just base it upon what our attendance is that we allowed. We were probably about 50% on attendance allowed for football games, probably about 30% what we were allowed at basketball games. Prior to hearing the first word about COVID, we had already planned to start charging for our broadcast, for football and for basketball, and we did that and that actually helped balance out some of the losses as far as spectators were concerned. Unlike Drury and MSU, our normal spectator crowds are not at that same level, so we wouldn’t lose a tremendous amount there. We also, from a conference requirement, had a decrease in number of actual competitions, and so we didn’t have travel for, let’s say, two football games. It’s a $6,000-$7,000 expense that we would have not had to spend this year.
Moats: We are still trying to figure it out. We know that we are down in ticket sales and seat assessments 70%. We also lost last year when we didn’t have the men’s basketball NCAA tournament, which is going on right now. Our revenue buckets … really been affected. Sponsorshipwise, we are able to hold, thus far. Most everything is being pushed to the spring. We are going to be able to make up those games that we technically lost in the fall, and for our sponsors we are going to be able to make good here in the spring. We have 17 sports going on in the spring. That is not normal, and that is hard for us to be able to put those events on. But from a revenue perspective, we will probably be whole.

Finding stars
Temple: Another change came to recruiting as parents and students aren’t traveling like they used to. What does the modern day of recruiting student-athletes look like?
Moats: We have a dead period all the way until May 31. It has been very difficult because you can’t get on campus and our guys can’t go off campus to recruit. It has been more of a virtual setting, more phone calls and virtual, which again, in the end, may not be a bad situation. There is some cost-cutting measures there. Parents can still contact us, can still send video. There are some pockets of the country that can do that; other pockets can’t. I think what the NCAA did, at least for us, is just said we can’t allow Springfield, Missouri, to do it and Buffalo, New York, not to be able to do it. So, they just put a dead period in.
Bray: There was a similar situation in Division II early on in the pandemic. But then we have a different governance structure, and we made the decision to open up recruiting last summer. We have been having perspective students on campus here at Drury, through our admissions office, since last summer. It is a different campus visit environment as you have mentioned. We have smaller campus tour sizes. We have been able to go off campus to evaluate and contact prospective student-athletes, when Division I has not been able to do that.
McDonald: For the (National Association of Intercollegiate Athletics) level, it is completely different. We have year-round recruiting. At the times during the year when we could not have people on campus, it was done mostly through Zoom and texting and calls. The tryout process might be a little bit different because there is a period of time where ordinarily we might have an individual come in and try out, and we could actually have members of the team that they may be seeking to be a part of. This year we were limited on that on different times of the year. Our budgets are very limited. If I have a soccer coach that is recruiting someone internationally, they are not exactly getting on a plane and flying and sitting on a chair in their living room. That type of recruiting is exactly the same as it has always been. We do recruit a lot locally.
Temple: What about recruiting at the coaching level?
Bray: Our legendary men’s basketball coach, Steve Hesser, just announced his retirement after 17 years of service to Drury and that was a big deal on our campus and big deal within the community for Drury, so, I am in the throes right now of trying to find the next leader of our head men’s basketball program and so we are doing some stuff via Zoom to start off with interviews. [Editor’s note: Chris Foster was named head basketball coach on March 24, 5 days after this interview.] Fortunately, things have gotten better in Springfield, where I can bring some candidates on campus for some in-person interviews. I have done some other head coach searches earlier in the year, which I wasn’t able to do that – I did everything via Zoom and I couldn’t see them face to face until they arrived on campus for their first day, which was very strange.
McDonald: We don’t have any spots right now that I’m aware of that are coming open, but I’ve been in administration for a lot of years and I’ve said that exact same thing and five minutes later I found out about an opening.
Moats: We certainly had a little bit more Zoom than we traditionally had, but when it came down to the finalists coming to campus, we invited them to come to campus … and they did. The Zoom part of it was more prevalent in the process than probably I’ve ever done before, which was a good thing. It will be something we keep doing moving forward.
Temple: College of the Ozarks announced recently that they are severing ties with the NAIA. What do your agreements look like, what are the things you consider in an association and are you looking at any deals to switch associations or conferences?
McDonald: For us, the NAIA has been the right level. I do a lot of research: You look at costs, you look at travel distances, you look at dues. It’s a constant process of looking at numbers and looking at ways to possibly improve, but there’s no definite steps toward anything presently.
Moats: We certainly aren’t looking to go anywhere else, but the landscape of Division I, there is going to be some movement and there already has been some movement with our (football championship subdivision) schools in terms of moving to different conferences and looking at that and seeing if it lines up with what the mission of their institution is. My stance on this has always been, we have to do the best we can do here and what makes us marketable.
Bray: We are very happy with the Great Lakes Valley Conference. It’s a great fit for us and we’re not looking to move.

Revenue drivers
Temple: What are the biggest revenue drivers within your programs, and what are some of the loss leaders? Is there anything you’re considering cutting?
Moats: We’re not considering cutting anything at this time. We’ve done that analysis a couple years’ back and really our focus continues and remains to be men’s basketball, football and women’s basketball. Those are our revenue drivers, along with donations and seat assessments that go along with those three particular sports. All the revenue buckets we have to enhance. Our biggest donor is the university – that’s who subsidizes us the most. We look at all those revenue buckets as areas we have to improve on, which is really ticket revenue – that’s the biggest thing. I say it all the time, if you want to help us, you need to be a season ticket holder. It doesn’t mean you have to give $1 million.
Bray: We are an enrollment-driven institution and help drive numbers through athletics – probably very similar to Dennis. We have 28 sports, 502 student-athletes and so that tuition revenue, that room and board revenue, is critical to the financial stability of Drury University. That’s our main revenue driver.
McDonald: A lot of folks when they think about college athletics, they think someone gets a scholarship and it’s exciting and great, and it really is. But if we have a high scholarship individual, they may be at 100% tuition, but our estimation for the entire athletics program may be somewhere around 65%-67% tuition discount. So, the driver, when you think about that, you think about what’s left to pay for the average student-athlete at Evangel. They are students at Evangel and that drives our total revenue and it assists the university in its total revenue. We’re about 500 student-athletes as well, with very few full scholarship athletes. It’s not about ticket sales at games for us, although we do bring in some. It’s about the student and the student enrollment and the tuition.

Sports developments
Temple: We’re seen an influx of youth sports developments around town. [Editor’s note: See “Game Changers” story on Page 9.] How does that impact your programs?
Bray: All three of us serve on the Springfield Sports Commission, so we are involved through that entity with these types of developments and certainly promoting them to get into Springfield to attract those types of events. When you can bring in large-scale soccer tournaments or large-scale lacrosse tournaments or basketball tournaments, those are major revenue drivers in the Springfield community with hotel nights and restaurants dollars.
McDonald: That’s exactly the same for us.
Moats: We’ve got the high school basketball championship going on right now, which is great for the community, great for our institutions to have all those families and cities come here to look at our institution, our city and our facilities. From a competitive standpoint, if we’re able to host a championship that Evangel is playing in, I think that’s a competitive advantage for Evangel.
Bray: We traditionally host the Pink and White Lady Classic, which is a great high school girls basketball tournament usually right around Christmas in the O’Reilly Family Events Center. That’s a great opportunity to get high school aged girls that play basketball to come to our campus and experience Drury. Even if they don’t come play for the Lady Panthers, they may want to enroll as a student and be a fan. Things like that definitely help from an institutionwide recruiting perspective.
McDonald: We do host a number of different types of events, but right now one of our main areas of pursuit is facilities improvement. We’re hard on the trail of raising funds to improve our Ashcroft Center and continue to improve our outdoor facilities. We probably would be hosting more things once we get to that point of improvements. One big event that comes into Springfield every year is the homeschool basketball tournament. That is several hundred basketball teams scattered throughout this entire area. Our coaches are paying attention to that and if there are some great athletes that are at NAIA level play, our coaches will know about it.
Moats: I know the sports commission is really working hard, and Lance Kettering, who is in charge of that, is doing a great job. But we also need to have a little bit of help from the community to have these facilities because a lot of that falls back on the institutions, on Evangel and Drury and Missouri State. Sometimes we just can’t do all the things the sports commission wants to do because we don’t have the facilities to do it. Our first and main responsibility is our student-athletes that compete and use those facilities. We all want to be good community partners, but it also helps to have additional facilities so we can bring those events and championships here to help economically.
McDonald: It is something that is absolutely a need in Springfield. There was a time when our facilities in Springfield were absolutely top of the line, and time takes its toll. There’s a lot of improvement that needs to happen and a lot of new facilities. Being in the central United States, you would be surprised at how many organizations want to be right here in Springfield, Missouri, playing their event. But they are looking for certain things to move their championship tournament. It’s critically important for the city of Springfield to pursue youth athletics and athletic facilities.
Bray: I would also add that one could make a strong argument that we’re falling behind other communities in this area. It’s more than just sports. It’s economic activity, bringing people in to experience all the wonderful things about Springfield when they travel in to watch their son or daughter play a sporting event. It’s generating revenue through hotel nights and gas stations and restaurants. Sports is a vehicle to help make a great impact on Springfield.

Changing the game
Temple: You all mentioned some changes you’ve made in the past year that you hope to continue going forward. How has the past year spurred innovation to revamp programs or address challenges?
Moats: We were so reliant on the actual game itself. Who thought we weren’t going to have a game? I think we really tried to take a look at the digital component from a sponsorship standpoint and how we interact with our fans. There will be some other things when we have time to sit down and have two seconds to think about it after the spring gets done. As I mentioned before, recruiting from the sense of our folks don’t have to be out as much. I think that’s a good thing.
Bray: We host an auction every October. It’s a great revenue driver for the athletics department but it’s also a great social event for all of our fans and supporters. We couldn’t do that this year and so we had to get creative. We did a virtual auction, and it was a tremendous success. Next year, when things are back to normal, what can we do to blend an in person and virtual event? We were able to reach supporters of Drury athletics across a number of states and a couple of different countries. It broadened beyond a local event.
McDonald: One thing we learned in our conference, especially, is how to communicate better with each other. We developed a conference task force that included athletic directors and trainers. We are going week by week to make decisions. The process of communication has been really strong, and I think we developed some closer friendships through that.

Excerpts by Christine Temple, ctemple@sbj.net, and Michelle Higgins, mhiggins@sbj.net.

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