DEL.ICIO.US2007 Chick-fil-A Bowl brought in $12 million
Financial breakdown of college football matchup shows where the money went
The Atlanta Journal-Constitution
Wednesday, January 07, 2009
The college football season is set to end Thursday night, and Chick-fil-A Bowl President Gary Stokan is in Miami ready to attend the title game.
Sure, he gets a chance to watch one last gridiron contest, and being in Florida in January isn’t bad, either. But Stokan said his mission is to see how officials there put on the game and if there’s anything the Chick-fil-A organizers might emulate.
JASON GETZ / Staff
Nearly $6 million from the 2007 Chick-fil-A Bowl went to Auburn and Clemson, thw two teams that squared off that year.
Then he, other bowl officials and their counterparts around the country will start counting up their proceeds and planning for next season.
Chick-fil-A Bowl organizers have not disclosed the financial results of the game held in Atlanta last week. However, their most recent report to the Internal Revenue Service gives an idea of the economics behind the 2007 game, including:
• It cost $10.24 million to put on the Chick-fil-A Bowl and the other events associated with it.
• Nearly $6 million went to Auburn and Clemson — the two universities that squared off that year in the annual matchup between teams from the Southeastern and Atlantic Coast conferences.
Replicating last year’s results may be tough in this economy for many cities. Experts say some bowl games were more lightly attended than past years in other cities and advertisers spent less.
“We’re seeing probably for the first time in a long time the pullback in sponsorship,” said Paul Swangard, managing director of the Warsaw Sports Marketing Center at the University of Oregon.
Swangard recently watched Oregon beat Oklahoma in the Pacific Life Holiday Bowl, held in San Diego. He said there were seats available, and he heard plenty of stories about others not traveling for the game.
But the Chick-fil-A Bowl has an average attendance of 71,986 for the past 10 years, the highest of any non-Bowl Championship Series game. Even in a horrible economy, while other bowls struggled, the Chick-fil-A bowl sold out again in 2008, for the 12th straight year.
“The trend that we’ve seen with a lot of the bowls is understanding that they really need to do more than just host a good football game to make these things work,” Swangard said. “They want to have a relationship with the community or the fan base, and a single game doesn’t make sense.”
To pull off a successful event like this takes a lot of planning and a lot of cash to pay for events and the executives that run them. In 2007, more than $1 million went to salaries, rent and other fees, and nearly the same amount financed banquets, luncheons and other events, according to the most recent IRS form 990 filed by Peach Bowl Inc., the corporate name of the nonprofit that runs the bowl.
“We have probably 35 events that go around the bowl game,” Stokan said. “I’ve tried to create an umbrella, and off of that umbrella, you extend different events. You do that so you can create revenue … They all have their own sponsorships.”
Overall, the bowl brought in $12.31 million in 2007, chiefly from ticket sales, TV rights and corporate sponsorships.
Ticket sales accounted for $4.26 million. The average price was $62.50, Stokan said. The bowl sells about 35,000 tickets locally, and about 92 percent of ticketholders renew their seats each year, he said. But they may pass that ticket on to a friend or business partner or sell it through an online outfit like Stubhub.
“That (92 percent renewal) is unheard of in this economy,” Stokan said.
Chick-fil-A became the title sponsor of the bowl at the end of the 1997 football season. The “Peach” was dropped from the name in 2006, but the nonprofit has retained the name.
The group has a management agreement with the Metro Atlanta Chamber of Commerce. Stokan said this essentially means a couple of things: The employees for Peach Bowl Inc., including Stokan, are from the chamber. Peach Bowl Inc. reimburses the chamber for salaries, rent and for graphic designs.
Stokan, for example, is the bowl’s president. He’s also the president of the Atlanta Tipoff Club and the Atlanta Sports Council, which is a division of the Metro Atlanta Chamber. His salary of $372,194 is split between the Chick-fil-A Bowl, which pays 60 percent, and the sports council, which takes care of the remaining 40 percent.
This agreement, Stokan said, explains why the financial filings show that the bowl gave a total $1.24 million to the Metro Atlanta Chamber. About $931,608 went to “reimbursement arrangements: primarily salaries,” and the remaining $312,400 went to “rental of facilities, shared services fees, including management fees.”
Chamber President Sam Williams and CFO Robert Hollis have their six-figure salaries — $720,075 and $212,348 respectively — listed on the forms. Neither are paid by the bowl or its chief sponsor, Stokan said. The two are board members, but those are unpaid positions, Stokan said.
“I don’t even know why his and Rob’s names are on the 990s,” Stokan said. “They don’t receive any money from the Chick-fil-A revenues or Peach Bowl Inc.”
The bowl’s Web site boasts giving $1.04 million in charitable and scholarship contributions in 2007 and $1.2 million connected with the 2008 matchup between LSU and Georgia Tech.
The bowl also gave $100,000 to the Virginia Tech Foundation after a lone gunman student shot and killed 32 people and wounded more than a dozen others in April of that year.
Then $199,500 went to the Winshape Foundation, started by Chick-fil-A founder Truett Cathy. The foundation assists families, foster children, businesses and young summer campers who set up on the campus of Berry College near Rome. The bowl gave $210,000 in 2008.
“We felt like it was only the right thing to do to give back to Truett’s foundation, with Chick-fil-A being the title partner of the game,” Stokan said.
The National Football Foundation’s Play it Smart program received $180,000, and the Georgia Lions Lighthouse Foundation got $50,000.
In 2007, a combined $5.93 million went to Auburn and Clemson. The payouts — $3.38 million to Clemson and $2.55 million to Auburn — are based on a contract worked out with the SEC and ACC conferences, Stokan said. The current four-year contract ends after the 2009 game. Stokan said he will begin negotiating new ones starting this summer.
“Now the risk is on us … we have to raise that kind of revenue to pay that kind of money,” he said.
To do that, Stokan places his bets on three things: title sponsors, TV agreements and ticket sales.
In 2007, more than $2.66 million came in from sponsors. Besides Chick-fil-A, other sponsors include Coca-Cola Co., Home Depot, Delta Air Lines and Georgia Power. Others include Xbox, BB&T, Russell Corp. and Pontiac.
“Each of the sponsors has a particular event that is tied to them,” Stokan said. “You have to create relevant events that can carry their own weight financially, but you have to create them that they have enough assets so someone will sponsor or that someone will buy a ticket.”
The TV rights agreement — which is with ESPN in the Chick-fil-A bowl’s case — brought in $2.49 million, and $1.32 million was brought in from social functions, including a golf tournament with alumni bowl participants, banquets and the game day FanFest.
CHICK-FIL-A BOWL FINANCIAL HIGHLIGHTS
Revenue
• Ticket sales: $4.26 million
• Sponsorships: $2.66 million
• Social functions: $1.32 million
• Membership dues: $793,534
• Merchandise sales: $137,241
Expenses
• Reimbursement arrangements: primarily salaries: $931,608 to the Metro Atlanta Chamber
• Conferences, conventions and meetings: $975,771
• Rent, accounting and finance services, information systems and human resources: $312,400 to the Metro Atlanta Chamber
• Travel: $66,833
Source: Peach Bowl Inc. 990
Salaries
• Gary Stokan, president of the Chick-fil-A Bowl: $372,194
• Robert Hollis,* chief financial officer of the chamber: $212,348
• Sam Williams,* president of the chamber: $720,075
* Williams’ and Hollis’s salaries are paid by the chamber and not through bowl revenues, Stokan said.
Source: Peach Bowl Inc. 990
Grants and charities
• Winshape Center Foundation, started by Chick-fil-A founder Truett Cathy: $199,500
• National Football Foundation — Play it Smart, an educational program for economically disadvantaged high school football players: $180,000
• Virginia Tech Foundation: $100,000
• Georgia Lions Lighthouse Foundation: $50,000
• Payouts to Auburn and Clemson: $5.93 million combined
Source: Peach Bowl Inc. 990
.JPG)
-1.JPG)
Services »
