Business Model Canvas Assignment 1

I chose to use my former employer, the University of Connecticut Football Program for my first Business Model Canvas Assignment. I was able to gain a clear understanding of the operational end of the football program over the course of the six years I worked at UConn.

To begin, I provided the following as the value proposition for what UConn Football is providing to their customer base: "Provide exciting football games against high quality opponents in a state of the art stadium built in 2003." Rentschler Field is a tremendous venue to watch a college football game. It is one of the newer college football stadiums in the country and includes great amenities such as a high definition video board, beer vendors, and concessions areas.

Football is considered to be a "Revenue Generating Sport", which means that it should be at a minimum revenue neutral, or turn a "profit". If a profit is turned it is then redistributed to other sports that may not generate enough revenue to cover their expenses. Customer relationships includes tickets to games being sold over the internet on UConnHuskies.com, over the phone, and in person at the on-campus ticket office and the stadium box office on the day of the game. Key activities are the games, as they are the primary source of ticket revenue, but making post season bowl games, the annual signing day event, and the spring game are great ways to generate revenue by enticing fans and alumni to make private donations.

Next, here is an analysis of the major revenue streams for the UConn Football program. These would most likely be fairly similar to most major college football programs across the country. The first is the American Athletic Conference Television Contract. The revenue share for teams in the AAC is about $3.5 million per year per school. The University of Connecticut Division of Athletics also has a contract with IMG College Sports that is worth about $10 million per year. For purposes of this assignment I assumed that Football accounted for 25%, Men's Basketball accounted for 25%, Women's Basketball Accounted for 25%, and all olympic sports bundled together to capture the remaining 25% of the $10 million per year. Therefore, I input $2.5 million in revenue from the IMG corporate partnership. The University of Connecticut Division of Athletics also has a corporate partnership with NIKE that is worth approximately $4.5 million per year. Once again, I used the same 25%/25%/25%/25% split amongst the four segments, which leaves the Football Program with approximately $1.125 million in revenue from the NIKE contract.

I also evaluated the revenue gained through private donations. In 2012, the University of Connecticut raised $21.8 million in private donations for athletics (Per UConn Fact Sheet). I once again used the 25%/25%/25%/25% split amongst the four segments that I used for the corporate partnership analysis, which led to me inputting $5.45 million in private donations being allocated to football.

For the purpose of this assignment I listed the television contract, the IMG Corporate partnership, and the NIKE corporate partnership as "Other" in the customer segment section. Since these are guaranteed revenue sources I input the customer segment size as "1" and the percent of market share as 100%.

I also evaluated ticket sales as part of the revenue stream. I looked at three potential segments of customers Alumni, CT Residents, and Students. Student season tickets sold out each of the years that I worked at UConn. The student body is 30,256 (Per UConn Fact Sheet) and the student section seating is approximately 5,000, which means about 16.8% of students buy the season ticket packages. The package includes 7 home games at $8 per ticket. Of the 217,000 (per 2012 UConn Fact Sheet) living alumni, I estimated that about 5% or 10,850 would purchase tickets. The average ticket price is $30 and their are 7 home games in a season. I also estimated that about one half of one percent of CT residents, or 17,950 would also purchase tickets. In total, that is approximately 33,800 tickets per game. The stadium seats about 38,500. For the purposes of this assignment I estimated that complimentary tickets for players, staff, the visiting team, give-a-ways, and the band accounted for the 5,000 other tickets.

Next, I evaluated the expenses for the football program. Our annual operating budget was approximately $4 million. This includes team travel, staff salaries, scholarships, equipment, and other operational costs. The annual recruiting budget was approximately $480,000. This includes coaches travel, official and unofficial visit costs, recruiting subscriptions, and recruiting software. I also estimated that the per game cost of the stadium lease agreement was approximately $2 million per game. This cost was part of a state contract that I did not have access to, but the general estimate of $2 million had been discussed in meetings that I had attended. Over the course of 7 home games that would equal $14 million.

The total revenues equalled $18,907,648 and the expenses equalled $18,480,000 for a "profit" of $427,648. Because of the methods of tracking football only expenses that are only part of the football budget and division wide expenses, I did have to include some estimates in this analysis. According to the tool based on the figures I input, UConn Football is an effective Revenue Generating Sport that could assist the Division of Athletics in funding other varsity sports on campus.

UConn Fact Sheet