Dollars and sense for Wichita State

March, 20, 2014
Mar 20
12:55
PM ET
Ask Russell Wilkins, who runs ticket operations at Wichita State, why he didn't raise ticket prices after the Shockers made the Final Four last season and you'll get an answer you won't believe.

"Because we didn't need to," Wilkins will tell you.

[+] EnlargeCharles Koch Arena
Peter G. Aiken/USA TODAY SportsWinning, including a Final Four run, has had a positive effect on Wichita State's revenue.
As college sports has become a bigger and bigger business, fans are used to programs cashing in just like the professional ones. Have a big year, send a bigger invoice. Except the Shockers haven't sought to make money off every possible avenue.

"Once we balanced our budget, we didn't need to gouge our fans," Wilkins said. "We're a need-based organization using the nonprofit model."

Compared to their Missouri Valley Conference counterparts, Wichita State has the most expensive ticket and donation requirement, which did in fact rise in recent years, but the athletic department has been more conservative than most that have found themselves in this position.

The last time the Shockers raised ticket prices was three seasons ago, when the cost of the most expensive ticket went from $280 apiece to $330. Shocking considering the fact that tickets are typically the way to grow revenue for a program that is already sold out for the season.

"We live in Kansas," said the school's athletic director, Eric Sexton. "Our biggest donors are great business people, and they understand excellence with the highest level of fiscal integrity."

Sexton said roughly 70 percent of the athletic department revenues come from marketplace decisions like advertising, sponsorships and required ticket donations. He said his restraint on testing the maximum dollars he can generate is helped by what he has learned from the people at Koch Industries, the second-largest privately held company in the United States and a company that is based in Wichita.

"They talk about creating value for the customer, and we always try to pay attention that," Sexton said. "Value is based on the product you have relative to the economy."

The economy is really the X-factor in determining how much Wichita State can cash in on the future. Although the team draws interest from all over Kansas, Wichita has been especially hard hit by the decline of the aircraft industry. Boeing, Beechcraft and Cessna, all of which had employees in the city, haven't recovered since the economic downturn began in 2008. A recent report suggests Wichita's economy won't recover to 2008 levels until at least 2018.

That doesn't mean the Final Four run and this year's undefeated season hasn't increased the program's coffers. Although home games were sold out, more people actually showed up this season. You can tell just by looking at the concession revenue, up $40,000 to $130,000 this season. Sponsorship is also on pace to hit a record $2 million, up from $1.4 million just a year ago. So too are donations to the athletic department, which hit a record $4.7 million in 2013.

And winning has increased the frequency of some pleasant surprises. Like the fan who had never been on the program's radar and asked what it would cost to get four of the best season tickets in the house. He had them, $60,000 later.

[+] EnlargeMarshall
Scott Sewell/USA TODAY SportsIf Wichita State has another deep NCAA tournament run, will it be able to afford coach Gregg Marshall?
"We had never spoken to the guy before," said John Brewer, the school's associate athletic director for marketing and strategic communications.

The cheapest season ticket, including the donation for the Shockers basketball games this season, was $437.50, but being considered a significant booster does cost thousands. The 173 donors who got tickets through the team's NCAA tournament allotment in 2014 donated at least $6,000.

Then there's the record licensing royalties that will come this year.

A couple of years ago, Wichita State changed the look of its WuShock mascot for various reasons. Companies embroidering the image complained that it was too complex and took too long, thus reducing margins. The school complained that it looked sloppy. So they made it simpler, which ushered WuShock into the digital age and made him less intimidating to manufacturers.

For the 2011-12 season, Wichita State made $123,100 off sales of its licensed products. That rose to $400,000 last season and is projected to rise even higher this year.

Then there's what the Shockers no longer have to pay for.

The school's new deal with Nike doesn't provide Wichita State with any cash, but it does give the Shockers an annual allotment of 125 pairs of shoes a year, 25 home and away jerseys, 25 warmups and 25 traveling bags.

The school also isn't paying for the publicity generated by media coverage of the team. Wichita State's sports management program told the athletic department that the Final Four run last year generated $555.2 million in free media.

"That's pretty good," said Barth Hague, the school's chief marketing officer. "Our entire university budget is $291 million."

Sexton says he likes to run his program so that he can provide his coaches and athletes with everything they need. If Wichita State makes another big run, one has to wonder whether Sexton will be able to raise enough to keep basketball coach Gregg Marshall.

After last season's run, Marshall's $1 million salary was raised to $1.6 million, with that number slated to go up to $1.75 million this April. Sexton also added some perks, including the use of a private plane for Marshall and his family for vacations.

Said Sexton: "My dad told me when I first took this job that if nobody wants your coach, you either have the wrong program or the wrong coach."

Darren Rovell | email

ESPN.com Sports Business reporter

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