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The Honolulu Advertiser
Posted on: Friday, January 8, 2010

Pay-per-view sales revenue down in 2009

By Ferd Lewis
Advertiser Staff Writer

Overall sales revenue from the pay-per-view showing of University of Hawai'i sports in 2009 is forecast to come in about 16 percent below 2008, the school said yesterday.

Because of the way the contract is structured, however, UH said it expects its share of the proceeds to drop only about 4 percent.

Based upon unaudited returns, UH said it projects the pay-per-view package to produce approximately$3.4 million in sales, down from just under $4.1 million in 2008.

Sales of the season ticket package of nearly 20 events dropped nearly 12 percent from 8,318 in 2008 to 7,347 in 2009, UH said.

The school's share of revenues was $2.6 million in 2008 and is projected to be about $2.5 million for 2009.

UH's hit is less than the overall drop "because when we renegotiated the contract two years ago we wanted to protect UH athletics in down years," said athletic director Jim Donovan.

Revenue is shared among UH and its partners, Oceanic Time Warner Cable and KFVE.

Donovan attributed the slide in sales to the economy and the football team's struggles.

UH football is the major component of PPV and the Warriors had a 2-6 start before rallying to a 6-7 finish.

Because of the declines in most revenue areas plus fixed costs in high-ticket elements of travel, guarantees, salaries and benefits,

UH is projecting in the neighborhood of a $2 million deficit for the fiscal year that closes June 30, pending the outcome of basketball, baseball and men's volleyball receipts.

Pay-per-view prices have increased annually since the plan's advent in 2002, but Donovan declined to say whether he believes a ceiling has been reached.

"We'll always take look, along with our partners, at the pricing each year," Donovan said. "But in general terms right now we have to be very careful on any prices increases."