Two important points:

1.) Once revenue-sharing starts in 2005-06, the Big East will scrape VT's entry fee off the revenue sharing check, so the Hokies will get approximately $1.3 million per year from the conference (from the Roanoke Times article: "Even after $300,000 is taken away, Weaver expects Tech to reap about $1.3 million from Big East revenue sharing each year").

2.) The entry fees do not count as men's basketball expenditures, and the revenue sharing does not go directly to the bottom line in men's basketball. But Tech AD Jim Weaver told Mark Berman that "men's basketball will be on the positive side of the ledger, because they're responsible for a lot of the [Big East] revenue [sharing]."

Given point #2 above, we can guess that of the $1.3 million VT will get from the Big East, about $1 million of that will become men's basketball revenue. (Remember that, because we'll use that figure later.) That extra $1 million would instantly make the men's basketball program profitable, if all else remained equal.

Revenue sharing of $1 million per year is unprecedented for the men's basketball program at Virginia Tech. While I don't know what the old Metro Conference revenue sharing income was, it's very doubtful that it was close to $1 million a year, and the Atlantic 10 revenue sharing only brought in a paltry $100,000 per year, according to published reports from three years ago.

Two big changes are about to happen in the financial aspects of Virginia Tech men's basketball:

1.) Starting in 2003-04, the head coach's compensation package, which was about $200,000 per year, will increase to (my guess) about $500,000 per year, maybe as high as $700,000 per year, depending upon what happens with the current head coaching search. (Assistant coaches' salaries will not change much, I am told, and will stay fixed at around $200,000 per year.)

2.) Starting in 2005-06, Big East revenue sharing kicks in. We'll assume that adds an extra $1 million per year to revenue to men's basketball, as discussed above.

Two other things could happen to affect revenue and expenses:

1.) Starting in 2003-04, non-coaching-salary expenses, which have been somewhat volatile, will start to rise. Weaver has already promised more charter flights for travel, and Tech's recruiting budget, a paltry $30,770 in 2001-02, has plenty of room to go up. Expenses, currently about $1.25 million per year, could approach $1.5 million per year.

2.) Starting next year, attendance could begin to increase, if VT's new coach can build a winner capable of going to postseason play -- even if it's just the NIT. The Hokies averaged 4,211 fans per game this year, up from 3,500 last year. It was 4,500 the year before that, and 4,042 the year before that. If VT's next coach gets the team to .500 or better and starts making the NIT or even the NCAA's, attendance could rise to 6,000 or 7,000 per game. (The Hokies averaged 6,241 during the 1994-95 NIT season, and 8,357 during the 1995-96 NCAA season.)

Or, attendance could stay flat, if the new coach can't build a winner or put a more exciting product on the floor than what Tech fans have seen for years.

There are other, hard-to-pin-down factors. Will VT be on TV more? Will concessions increase? Will donations go up or down? These are all impossible questions to answer.

Given all that, let's run a few scenarios for the coming years, a best-case and a worst-case. First, let's set our assumptions.

Assumptions - Fixed Costs: For the remainder of our analysis, we'll assume that come costs and revenue sources will be constant and will remain the same as they are now.

• Non-coaching-salary expenses: $1.5 million per year (up from current $1.25 million level)
• Assistant coaches' salaries: $200k per year
• Big East revenue sharing: $1 million per year starting in 2005-06
• All other revenue and expenses: fixed at current levels of about $850,000 per year

It is assumed that no extra TV money, no extra donations, no extra travel costs, etc. will occur in the immediate future.

Attendance Revenue: You can project ticket sales revenue using the following baseline and assumptions:

• Ticket revenue was $552,260 for 3,500 fans per game in 2001-02 (source: Roanoke Times)
• Assume that every increase of 1,000 fans is an increase of 750 paying fans per game, with the rest being students.
• Assume VT plays 14 home games a year, 8 of which are Big East games at $15 apiece, and six of which are non-conference games at $10 apiece.

This means that every additional 1,000 fans per game will bring about $135,000 in increased revenue (750 x 8 x $15 + 750 x 6 x 10 = $135,000; every 500 extra fans will bring half that much, or $67,500).

Using these assumptions, for the following attendance figures, revenue tracks as shown (figures rounded off for ease of calculation):

Given that, here are the best and worst-case scenarios for VT men's basketball over the next four years.

Best Case: The new coach only gets paid $500k per year, attendance increases to 8,000 fans per game after four years (average goes to 5,000 next year, then 6,000, 7,000, and finally 8,000 in four years).

This means that expenses are fixed at $2.2 million per year ($500k for head coach, $200k for assistants, $1.5 million for all other expenses), and ticket revenue rises steadily from about $750k to over $1.1 million.

Worst Case: The new coach gets paid $700k per year, instead of just $500k, and attendance stays flat at around 4,000 fans per game.

This means that expenses are fixed at $2.4 million per year ($700k for head coach, $200k for assistants, $1.5 million for all other expenses), and ticket revenue is fixed at $685,000 per year.

Here's how that looks.

Notes:

1.) Total Expenses = Head coach salary + assistants salaries of $200k + other expenses of $1.5 million

2.) Best-Case scenario attendance is 5k per game for 2003-04, followed by 6k per game in 2004-05, 7k per game in 2005-06, and 8k per game in 2006-08

3.) Worst-Case scenario attendance is 4,000 per year.

Typical "Inside the Numbers" figures -- overwhelming. What does it mean?

Well, one of the points of this article was to wonder aloud how much VT can spend on a men's basketball coach, and these figures show that anything up to $700,000 per year is probably not going to prevent the men's basketball program from becoming profitable when Big East revenue sharing kicks in in 2005-06.

Even if attendance stays at a paltry 4,000 fans per game, and VT pays their coach $700k, then Big East revenue sharing will make the program profitable -- by a small margin -- starting in 2005-06. That is assuming that other program expenses, which are currently about $1.25 million, stay at $1.5 million or less.

The program has the potential to be making almost a million dollars a year just a few years from now, if the new coach can be hired for $500k per year and can light a fire under the fan base and drive attendance up to the 8,000 fans per game average that VT enjoyed in the 1995-96 season.

If the new coach is successful, then other revenue streams that are assumed to be fixed here could open up:

• Ticket prices might go up, increasing revenue beyond what a simple attendance increase will do
• The Hokies might be on TV more, driving up TV appearance dollars
• Concessions could increase from their 2001-02 level of $43,543 to as much as $100,000.

And most of all, donations made to the men's basketball program could rise from their 2001-2002 level of $545,151 to $1 million or more, as more and more fans get behind the team and donate money.

This is a good time to make a suggestion, to those of you who care about Virginia Tech men's basketball: the next time you stroke a check to the Hokie Club, specify that 10%, 20% or more of your money goes to the men's basketball program. Hokie Club revenue is currently about $12 million per year, so if every Hokie Club contributor sent just 10% of their donation towards men's basketball, that $545,151 figure would jump to $1.2 million and would put men's basketball into the black -- or close to it -- before Big East revenue sharing kicks in.

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