Penn State hockey was designed to be a profitable venture. With Pegula Ice Arena paid for from the outset, the rest was fairly simple on paper.
Fans would flock to a building large enough to create an atmosphere but small enough to create demand. If all went well, the program would be self-sustaining, existing in its own world without much in the way of financial obstacles or difficult realities to hold it down.
It was a program built to be relevant, not one built to enjoy the novelty of existing.
This past week marks the conclusion of the fifth season inside Pegula Ice Arena and yesterday Penn State athletics released its financial report for the recently completed 2016-17 fiscal year. While this means Penn State's fifth year at Pegula has yet to officially hit the books, it's still data enough to look back and get a sense of how the program is doing from a business standpoint.
The short version, it's doing very well.
So far through four reported years at Pegula, Penn State hockey has generated a total profit of $3.03 million averaging in the ballpark of $750,000 in profit each year. To put that into perspective, it makes men's hockey one of just three athletic programs on campus that create a positive cash flow annually. The other two; the somewhat obvious answer of football and a men's basketball program that brings in nearly $6 million in TV rights each season.
That's perhaps one of the more impressive aspects of men's hockey success. It has happened without the benefit of television rights. Men's basketball, would routinely lose something in the ballpark of $700,000 due to operating costs if not for that massive TV check from the Big Ten and ESPN. [In fairness, the program with the media rights included provides Penn State with a positive flow of $5.3 million.]
Even wrestling, a sport as passionately followed as any at Penn State, is not a money making franchise. In 2017 wrestling brought in $1.5 million in revenue while racking up a $2.3 million operating bill.
So where does hockey get its money?
A few places.
For one, Penn State hockey is the only sport on campus aside from football to generate over a million in ticket revenue each year. During 2016-17 the Nittany Lions pulled in $1.7 million in ticket sales while men's basketball managed $933,082 and wrestling with $685,443. That figure stands to increase in the 2018 report after season ticket prices increased for this most recent season.
Parking, concessions, and novelty items? Hockey managed $198,738 last season from those categories, dwarfing hoops and wrestling that combined for $68,049 in those same areas.
There's recruiting, Penn State spent roughly $61,000 on recruiting trips while basketball piled up a $336,396 bill that still is among the lowest in the Big Ten.
Lastly, contributions, something Penn State describes as:
- Amounts received from individuals, corporations, associations, foundations, clubs or other organizations designated for the operations of the athletics program.
- Funds contributed by outside contributors for the payment of debt service, lease payments or rental fee expenses for athletic facilities in the reporting year.
- Amounts received above face value for tickets.
In that area, Penn State hockey brings in just over $700,000 which falls second best behind Penn State football's $9 million and change.
As a result Penn State hockey has, at least from a business standpoint, become everything it planned on.
However undeniably true, the addition of both men's and women's hockey has not been. The men's counterparts net nearly a million more in expenses than revenue each year, bringing the aggregate total of hockey on campus to more or less a state of breaking even.
But in the service of the student athlete, collegiate athletic programs are not necessarily designed to create profit beyond sustainability, especially with men's basketball and football often footing the bill. Equally so, Penn State's blueprint when it comes to expanding the sport, is largely predicated on the ability to land the kind of funding that can build an arena for said program for essentially no cost to the athletic department.
Something easier said than done.