Cal Premium Football Seat Sales Are Sluggish

San Francisco Business Times, Eric Young

http://www.bizjournals.com/sanfrancisco/print-edition/2012/08/03/cal-stadium-seat-sales-stall-out.html

Cal athletic officials aim to jump-start sales of premium football seats, a critical revenue stream for the school’s $321 million stadium renovation.

After an initial burst of sales more than a year ago, purchases of the priciest seats in Memorial Stadium have stalled in recent months. All three types of premium seats — which sell for as low as $40,000 and as much as $225,000 — have seen small increases or none at all in the January-to-March quarter, according to the university’s most recently published tally.

“The numbers are not where we would like them to be,” said Solly Fulp, the athletic department’s COO. “But we have time to get this sales transition up and running.”

University officials did not explain why sales have slowed. But Cal’s sales effort coincides with a difficult economic climate in the wake of the nation’s housing crisis, which played havoc with the portfolios of even the wealthiest Bay Area residents.

Cal has sold 69 percent of its 3,200 premium seats, which equates to $140 million in cash and pledges. The athletic department’s goal is to sell 88 percent of premium seats, equating to about $240 million in cash and pledges, by June 2013. Selling all available premium seats would raise about $270 million. Cal has premium seat sales in the pipeline, awaiting down payments or signatures on contracts before they can be added to the tally.

To boost sales, Cal will hire three sales people to approach local companies about Cal’s football seats. This represents a new tactic for the university, which so far has only approached people with ties to Cal, such as alumni and longtime donors. “It’s changing how we approach selling this premium product,” said Ashwin Puri, Cal’s head of ticket sales and marketing.

Timing will help sales. The first game in the newly refurbished stadium is Sept. 1. Once potential buyers see the new stadium, Cal officials said, they expect more buying.

Other colleges that have had football seating plans see “dramatic upticks in sales when people can see what kind of view they get from their seats. Our stadium is not even open yet,” said university spokesman Dan Mogulof.

Premium seat sales are a critical source of money for Memorial Stadium’s renovation, one of the most expensive stadium fixes among major colleges. Sales of premium seats — along with philanthropy and increased fees from a new $3 billion Pacific-12 Conference TV deal — will pay for stadium upgrades: improved seating and walkways, and strengthening against earthquakes.

The sales push comes as the athletic department works to reduce its university subsidy to $5 million by fiscal year 2014 from $9.5 million now, said Athletic Director Sandy Barbour. Cal athletics has a budget of about $65 million.