Hokies Poised to Match Finances With Rest of the ACC
by Will Stewart, TechSideline.com, 5/12/04

A mere two years ago, Virginia Tech's athletic revenue and expenditures lagged far behind that of their future ACC brethren, but Lane Stadium expansion, increased donations and ACC revenue sharing have the Hokies poised to enter the ACC on a level financial playing field with their fellow conference members. This bodes well for Tech's future ability to compete with the rest of the ACC not just in the big money sports, but in Olympic sports as well.

Last July, after the Hokies signed on the dotted line to enter the ACC in July of 2004, we ran an article called 2001-02 Finances: Hokies Near the Bottom in Big East, ACC. In that article, we showed using financial data from the Chronicle of Higher Education that the Hokies were far behind not only ACC schools in athletic revenue and expenditures, but their football-playing opponents in the Big East, as well.

In 2001-02, VT ranked seventh out of ten football-playing Big East teams (including UConn and Notre Dame) in athletic revenue and ahead of only Wake Forest in the future 12-team ACC.

Here's a quick snapshot of the ACC data from that article, since the Big East data is no longer relevant.

Athletic Department Revenue
and Expenses, 2001-02
(in millions of dollars)
(ranked by revenue)





























Boston College












Virginia Tech




Wake Forest




NC State




Source: The Chronicle of Higher Education

Note that NC State's reported revenue of $19.1 million doesn't include their athletic fund contributions (whereas every other school's revenue does). The Wolfpack Club, NCSU's equivalent of the Hokie Club, is a private foundation affiliated only "in name" with the university. They do not report to anyone on campus, they have their own banking, board of directors, etc. So that's why NCSU is only showing $19 million in revenue -- that figure doesn't include income from their fund-raising arm. Once that income, which probably is in the neighborhood of $10 million, is added into State's revenue figure, the Hokies fall behind NCSU into 11th place out of the 12 ACC teams.

The figures in the table above paint a grim picture of Tech's athletic finances when compared to their future ACC opponents, but the good news is that Tech's athletic revenue is climbing fast and will soon be competitive with most of the ACC.

2001-02 Finances: VT Scraping the Bottom of the ACC

On October 12th, 2003, an article ran in the Roanoke Times that detailed the efforts by Virginia Tech Chief Operating Officer Minnis Ridenour to help the Hokies land an ACC bid last summer. The article contained some interesting financial data on the Tech athletic department. (Sorry, the article is no longer archived.)

The data given related to athletic department revenue and expenditures. The data showed that VT's athletic revenues have increased sharply in recent years, thanks primarily to Lane Stadium expansion.

Here's part of the info from the article.

Virginia Tech Athletic Revenue and Expenses
(in millions of dollars)








Football Rev.







Other Rev.







Total Rev.














Net Revenue







* Projected
Source: The Roanoke Times, Oct. 12, 2003

Note the big jump in athletic revenue between the 2001-02 and 2002-03 academic years. This increase in revenue is almost solely attributed to the South end zone expansion of Lane Stadium, which added income from luxury boxes, premium seats, and about 13,000 new tickets sales per game to Tech's bottom line.

Hokie Club revenue increased in that time span as well, but most of that one-year $6.6 million increase in revenue came because of South end zone expansion.

Had VT posted 2002-03's revenue figure of $33.5 million one year earlier, it would have placed the Hokie athletic department solidly in the middle of the pack of ACC revenues, in sixth place.

You can see how valuable stadium expansion income is. It boosted VT's net revenues (profit) from an average of less than $2.5 million a year from 1998-2002 to an average of $6.5 million a year in 2002-03 and 2003-04. The Hokies were running in the black for most of the mid-late 90's, but in just the last two years, the surplus has exploded.

And more good news is on the way: West side expansion and ACC revenue sharing.

West Side Lane Stadium Expansion

VT's West side Lane Stadium expansion project is slated to be complete in time for the 2005 season, which means it will start adding revenue to VT's bottom line in the 2005-06 academic year. And like South end zone expansion, it will pack a serious punch.

(First of all, I apologize for not having TSL's Lane Stadium expansion page up to date. That's a summer project, and I will get it done before next football season.)

The Hokies are going to add the following to the West side of Lane Stadium:

  • 1,600 outdoor club seats with a $1,500 surcharge.
  • 782 indoor club seats with a $2,000 surcharge.
  • 12 suites "between the towers" that rent for $65,000 per season.
  • 6 North wing suites for $55,000.
  • 4 Tower suites for $100,000.
  • 1 suite "between the towers" for $100,000.

Grab your calculator. If VT sold those out, it would mean an extra $5.574 million in revenue per year. For purposes of financing the debt, VT is projecting a 75% sell-through rate, which would generate $4.2 million extra per year.

Hold that thought.

ACC Revenue Sharing

In an article that ran on July 23, 2003, the Roanoke Times reported that for the first two years of ACC membership, the Hokies (and Miami Hurricanes) will receive partial revenue sharing amounts of $6.25 million, which will increase to full revenue sharing in 2006-07 and beyond.

(Excuse me while I resist the urge to blast the Big East, which drilled Tech much harder than that, refusing to share basketball revenue -- AT ALL -- for five years upon the Hokies joining the league in 2000. The ACC has already shown itself to be a much kinder and more generous partner than the Big East ever dreamed of being.)

Once the Hokies start receiving full revenue-sharing in 2006-07, look for that figure to be about $9.5 million per year. The ACC paid $9.7 million per team in 2001-02, and with the league's newer, heftier football TV contract, they should be able to hold the line on conference payouts, despite increasing from nine to twelve teams.

The Roanoke Times reported on 7/23/03 that VT received $4.6 million from the Big East in 2001-02. So do the math. For their first two years of ACC membership, VT's conference revenue will increase by about $1.65 million, and beyond that, the increase will be close to $5 million per year.

Now, add that $5 million to the extra $4.2 million from West side expansion.

Now, add those figures to the projected 2003-04 revenue of $33.8 million. See the picture?

That's right. Hokie athletics are on a rocket sled to $40 million of revenue within just a few years.

Summing It Up

That's a lot of numbers from West side expansion and ACC revenue sharing. Here's how they look in tabular format.

Let's assume that all other revenue sources from 2003-04 stay constant. They won't, but it simplifies things. If you added the extra West side revenue and ACC revenue sharing to the current financial picture, here are the revenue projections for VT athletics for the next few years.

VT Athletic Revenue Projections
(in millions of dollars)






Baseline Revenue





Conf. Rev. Increase





West Side Revenue




Projected Revenue





West Side Revenue: Projected Revenue from West side expansion; could
go as high as $5.5 million.
Conf. Rev. Increase: Represents the increase in conference revenue sharing
over the $4.6 million paid by the Big East in 2001-02. Full ACC revenue sharing
projects to be at least $9.5 million per year in 2006-07 and beyond.
Source for 2003-04 baseline revenue projection of $33.8 million: Roanoke Times

To put it in perspective: In 1996, according to the Chronicle of Higher Education, VT's athletic revenue was just $16.2 million. Ten years later, the figure will be about 2.65 times that amount, or $43 million.

I sure wish my household income had gone up like that in the last ten years, don't you?

What It Means for VT's Competitiveness in the ACC

The projected revenue figure of $43 million for VT in 2006-07 is higher than the revenue any ACC school had in 2001-02. I'm confident that despite whatever measures other ACC schools are taking to increase their revenue, VT's skyrocketing revenue will allow the Hokies to stand toe-to-toe financially with most or all of the other athletic departments in the ACC.

If UNC for example were able to increase their revenue from $39.6 million in 2001-02 to $50 million in 2006-07, which would be a commendable increase of $10 million over five years, they would still only be about 15% ahead of VT's projected revenue in that year.

You can see that VT will quickly be on equal financial ground with their new sparring partners. It was thought that the Hokies would lag behind other ACC schools for at least a while, but that doesn't appear to be so.

The huge surpluses currently being run by the VT athletic department, combined with ACC entry, puts pressure on VT athletic director Jim Weaver to improve funding of the non-revenue or "Olympic" sports in which the ACC is so competitive and advanced.

In his VT tenure, Weaver has done an outstanding job of improving VT's facilities for non-revenue sports, including a new outdoor track complex, new softball field, and new soccer field. But VT falls far short of other ACC schools in funding scholarships, coaches salaries, recruiting budgets, travel budgets and the other myriad funding issues that make the difference in non-revenue sports. In order to compete with the rest of the ACC, the Hokies are going to have to ramp up scholarship funding, hire more competitive coaches at more competitive salaries, and give them recruiting and travel budgets that allow them to develop their programs.

A half-hour spent searching the web, including the Chronicle of Higher Education and the NCAA's web site, didn't produce figures for how many scholarships schools in the ACC fund in the non-revenue sports, but my memory and my instincts tell me that universities like Virginia and UNC fund all sports to their maximum allowed NCAA scholarship levels, or very close to it. For Virginia, if memory serves correctly, this includes close to 300 scholarships in the 24 sports that they sponsor.

Universities prefer that scholarships are funded through endowments, meaning that an individual or group donates an amount of money -- I believe it's now up to $100,000 at Virginia Tech -- that will fund a full athletic scholarship. The principal of the donation stays intact, and the interest pays the scholarship bills. Every scholarship that is endowed is a scholarship that doesn't have to be paid out of yearly revenues, so the ideal situation is completely endowed scholarships, freeing up yearly revenues for items like salaries, travel budgets, and recruiting budgets.

I can't produce endowment figures or scholarship numbers for all ACC member schools, but your instincts should tell you that the ACC schools, which have had consistent conference membership and revenue for decades, are dealing from a position of strength versus a school like Virginia Tech, which has bounced from conference to conference for the last 50 years.

The bottom line is this: while history puts the Hokies behind the eight ball with regards to their new conference members, the immediate financial outlook, from a yearly revenue and budget standpoint, is not grim. It's quite the opposite. While Jim Weaver has and should run the athletic department in the black, the huge surpluses of the last two years (totaling $13 million) and the foreseeable future point to one conclusion: it's time for Virginia Tech to start spending the money if they want to become competitive in the ACC.

The last decade has been spent positioning the Hokies financially, through football revenue, to be able to grow their overall programs. The heavy lifting is done. It's time to reap the fruits of the labor of the last ten years.

TechSideline Pass Home

Copyright © 2004 Maroon Pride, LLC