Pay-per-view football telecasts pay off for UH
• Complimentary tickets on rise
By Ferd Lewis and Stephen Tsai
Advertiser Staff Writers
The University of Hawai'i's two-year experiment with pay-per-view telecasts of its home football games has nearly allowed the school to make up for the drop in rights fees from its television contract without suffering a drop in attendance.
UH's share of home and commercial pay-per-view (PPV) sales for the 2002 and 2003 seasons totaled $1,089,764, according to figures supplied by the school. Its partners received $467,899.
UH's share almost compensated for the $1.2 million drop it suffered in television rights fees between its old and current K5 contracts. UH received $1.3 million for the fiscal year ending in the summer of 2002, the final year of its previous five-year contract with K5, and now receives $700,000 annually.
"For something we weren't sure how it would turn out when we started, it has done very well in a short time," said Paul Costello, who was UH vice president for external relations when he, K5 and Oceanic Cable drew up the "experiment" in 2002.
Costello left UH in January for a position at Stanford University.
John Fink, president and general manager of K5, said planned rate hikes, which "will go up a little bit this year," should enhance the venture. He said the amount of the anticipated charges would be announced in May or June after UH has put its season tickets on sale and the Western Athletic Conference concludes its new cable agreements.
Last year, PPV customers on O'ahu paid $100 for a five-game season package ($75 if 2002 subscribers renewed during a sale period) and individual game subscribers paid between $25 and $35 per event depending on the opponent. Neighbor Island subscribers received a reduced rate.
Under terms of the agreement, UH receives 70 percent of the first $1 million of net revenue and 33 percent of net revenue thereafter. Oceanic, the PPV provider, and K5, which produces the games, divide the remaining money based on a revenue schedule. Fink said K5 has yet to earn a share based on current revenue.
UH averaged 10,629 subscribers per game last season, including 118 commercial outlets such as bars and restaurants. That was up from 9,104 in 2002 despite the increase in fees.
Whether UH, which has gone 19-9 in the interim, would have significantly raised its in-stadium attendance without the PPV alternative, isn't known. But Costello believes "it has brought in a segment of the population that wasn't able or wasn't going to attend games anyway."
UH head football coach June Jones said "we're still experimenting. We're the trend-setters. Nobody else has this type of setup in the country. We're feeling our way through it."
Jones said he does not know the viewer-to-subscription ratio but "no question, there are probably 15 people watching it in a garage and tail-gating."
He said officials are seeking a PPV fee that would increase Aloha Stadium attendance "to give us a home-field advantage and yet provide a service for people who can't come to our games. They're most likely to raise the (PPV) price to find out what that number is."
UH averaged 34,803 in turnstile attendance for the 2000 and 2001 seasons, the two years immediately preceding the adoption of PPV. It has averaged 35,804 over the two-year life of PPV.
Between its average turnstile attendance and its PPV sales, UH has averaged approximately 45,000 in combined ticket or subscriber sales each of the last two years.
Fink said he believed UH lost out on as much as $150,000 in additional income when ESPN chose to show the Alabama and Boise State games last year. ESPN's contract with the WAC supersedes the PPV deal.
Citing a confidentiality clause in the WAC contract with ESPN, UH refused to disclose its ESPN-related revenues. But athletic director Herman Frazier has said the conference splits revenues equally among its 10 members and UH's annual share has been "more than" $20,000, but "less than" $50,000.
After paying UH $6.2 million over five years in its previous contract, Fink said K5 reduced its offer 46 percent in 2002 "because of the value of the programs and the number of games lost (to other outlets)."
ESPN, Fox or SportsWest have combined to pick up four UH football games each of the last two seasons.
Reach Ferd Lewis at flewis@honoluluadvertiser.com or 525-8044.
Reach Stephen Tsai at stsai@honoluluadvertiser.com or 525-8051.
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Perhaps as many as one in seven fans who attended University of Hawai'i home football games last season did so with complimentary tickets.
Of the 285,459 tickets issued for seven home football games, 37,599 — or 13 percent — were complimentary, according to figures made available to The Advertiser by the school this week.
The lion's share of complimentary tickets is given to corporate sponsors who give UH thousands of dollars in exchange for promotional rights, signage and other advertising during games.
With a turnstile average attendance of 35,904, the total number of "comps" was more than the turnout for one average home game.
That's a significant rise over 2002, when approximately one in 10 fans were holders of complimentary tickets.
The average of 5,371 "comps" per game in 2003 was a 36-percent increase from the per-game average of 3,952 for the 2002 season and contributed to the slight rise in attendance UH enjoyed.
Turnstile attendance was up an average of 200 per game in 2003.
UH officials gave away 5,981 more tickets for seven games in 2003 than for eight games in 2002.
New Mexico athletic director Rudy Davalos, who has been in athletics for more than three decades, said complimentary tickets are an "effective" tool in fund-raising. "If, say, a bank gives you $50,000, you might give them 100 season tickets," he explained.
Davalos said, "Most places do it to some degree depending upon their situation."
He said it would be hard to determine a nationwide average. "Obviously, Texas is going to be a different situation than an Idaho," Davalos said.
At UH, for example, KHNL/K5 receives 136 season tickets in the "best available seating" locations as part of its $700,000 annual television contract with the school. As a corporate sponsor, The Advertiser receives 36 season tickets in addition to signage and promotional rights for its annual commitment of approximately $200,000 to the school in cash, promotions and trade.
Other recipients of "comps" include businesses that donated items to the school, UH staff, members of the Board of Regents, the UH-Manoa Chancellor's Office, the UH President's Office, UH coaches and visiting teams. UH also gave away tickets as auction donations to non-profit organizations.
A school spokeswoman said state lawmakers no longer receive free tickets.
The seats involved were in various locations in Aloha Stadium, including some prime sideline areas.
Rodney Okai, a longtime UH season ticket holder, said, "if the stadium isn't full and it is a way to fill up seats and help UH get donations, I'm OK with that."
Because Division I-AA Appalachian State was a late replacement for Kansas State, UH athletic director Herman Frazier allowed free admission to UH students for the 2003 season opener. There were 7,920 complimentary tickets issued for that game, although it was not announced how many went to UH students. The free tickets pushed attendance to 42,104.
UH games against Texas-El Paso (6,253) and Army (6,035) also had large giveaways.
