Posted on: Tuesday, February 22, 2005

UH seeing payoff from football pay-per-view

By Ferd Lewis and Stephen Tsai
Advertiser Staff Writers

Pay-per-view sales of University of Hawai'i football games are climbing. Average football attendance is dropping.

And though UH officials enjoy the $812,310 the school received in record rights fees last season from pay-per-view — nearly double the $463,038 it earned in 2002 — others worry about that it might just be getting easier for fans to sit at home and watch the game rather than fill Aloha Stadium.

"We would like to see what the trade-off is in lost attendance because, even though we have pay-per-view in football, we just don't want to have a Chad Owens playing in front of 10,000 people, or something like that," UH Regent Alvin Tanaka said. "We'd like to see revenues go up, but we'd also like to see what kind of a trade-off we're looking at because you can't beat the warm bodies in the stands."

Rob Nelson is one of those warm bodies who likes to gather his family and a group of Enchanted Lake neighbors on Saturday nights for potluck events built around UH games on TV. He said pay-per-view works best for his group.

"There are 15-20 of us that get together and it is a convenience thing because we don't have to go through the whole parking thing (at the stadium)," he said. Without pay-per-view, "we wouldn't go to all of (the games). We might pick and choose."

Average Aloha Stadium turnstile attendance hit a six-year low of 32,268 in 2004 while pay-per-view rights fees hit a high, according to UH figures.

Athletic director Herman Frazier said he believed the school came out ahead financially this season.

"No question about it," Frazier said. "If you add that ($812,310) to the $700,000 we got from KFVE, that's $1.5 million and the year before (pay-per-view started), we got $1.3 million. So, that's a wash. A little better, really."

Manoa Chancellor Peter Englert said the experiment is a bit of a surprise.

"This (pay-per-view), which everyone thought might be bad for us, has gone rather well," he said.

The introduction and annual rise in premium seating charges, the lack of quality opponents in some seasons, and parking, traffic and stadium security issues have been cited as possible reasons for the decline in attendance. The UH football team has played in the Hawai'i Bowl the past three seasons.

Frazier told the Board of Regents last week that, "We're currently averaging 10,000 (pay-per-view sales) per game and if you add that number to the people you've probably lost, it is probably a wash given that, let's say, 33 percent of those folks are watching on pay-per-view and are not coming to the stadium for one reason or another (anyway)."

John Fink, vice president and general manager of KFVE and KHNL, agrees with Frazier, saying pay-per-view has "enhanced their revenue stream."

"Did somebody stay home? Absolutely. But did $800,000 worth stay home? No way. Say 20 bucks is the average ticket to a UH game. Divide that into ($812,000) and that's 40,600 tickets. We did seven games, so you'd have to draw 6,000 more a game to make more than pay-per-view. Would they have drawn 41,000 or 42,000 (without pay-per-view)? No way. Never happen."

Fink also noted that ESPN took many of the big-name schools like Michigan State and Boise State out of the pay-per-view lineup and viewers were still paying for some losing teams such as Tulsa, SMU and Army (in past seasons).

UH is expected to seek a raise in pay-per-view fees for 2005 but Frazier said those details won't be decided until after the school has secured its television partner. KFVE's contract with UH expires June 30 and the station is in an exclusive negotiating window with UH that expires Monday.

Frazier said, "no question whatever we do with pay-per-view (for 2005), it will also try to drive more people back toward the stadium."

For 2004, O'ahu pay-per-view subscribers paid $125 to $150 for the seven-game package. Individual games were $35 to $45. Neighbor Island subscribers paid lower fees.

UH received $1.3 million from KFVE for its television rights in 2001, the year before pay-per-view began. In large part because of the number of games it was losing to ESPN and other networks, KFVE negotiated the $700,000 fee for 2002-2004 but also put together a pay-per-view package with Oceanic Time Warner Cable.

UH's share of the rights fees has nearly doubled from $463,038 in 2002. UH receives 70 percent of the first $1 million of pay-per-view net revenue.

Reach Ferd Lewis at flewis@honoluluadvertiser.com or 525-8044, and Stephen Tsai at stsai@honoluluadvertiser.com or 525-8051.