CHICAGO — The revolving doors that serve as the entry point of the Hilton Chicago served as a phenomenal metaphor for what college athletics has become in recent years.
Penn State athletic director Dr. Patrick Kraft is tasked with managing those changes as well as navigating how to generate revenue to a point where the athletic department can function comfortably and make sure coaches have resources necessary to compete at a national championship level each year.
“We are blessed to be a self-sustaining department,” Kraft said. “We are blessed to be at the high end, but the minute you take your eye off the ball and you take a step back, that’s when you can lose footing. And the costs and the expenses are not going down. We all traveled here. Airfare is not cheap. I have to do that for 31 teams, so I have 31 mouths to feed. And oh, by the way, the majority of them can win national championships. So we have to continue to accelerate our our revenue growth. Our profit and loss is real, like we have to focus on our P&L, and that is always constant, and it’s more than ever before.”
Kraft and the Penn State athletic department have continued to find new areas to generate revenue, some that were unheard of until recent years such as naming rights to Beaver Stadium. That includes selling every available piece of real estate in West Shore Home Field at Beaver Stadium including end zones advertisements and most recently naming GIANT as the official grocery partner of Penn State athletics.
“We’ve signed a guarantee up north of a billion dollars in guaranteed commercial deals,” Kraft said. “The key is the guarantee number, it’s the floor. Now, we have the opportunity and we should continue to generate more revenue on top of that, but that gives us a baseline more than most any of our peers. We’ve also raised $353 million in four years, three of the highest fundraising years in the history of the department, and the fourth was when you know Terry (Pegula) stepped in to build this iconic hockey program. So that year was, but so we’ve accelerated our philanthropic piece.”
Is that enough to be comfortable?
“No, it’s not,” Kraft said. “So we have to continue to find other ways to generate revenue at a high clip.”
Add Nittany Sports Now as a preferred source in Google! Click here to add us.For their peers, that’s included jersey patches like Ohio State’s new deal with JPMorganChase which is worth upwards of $17 million per year.
“Our take on this is we’re going to make sure we’re maximizing the revenue potential,” Kraft said. “You can’t rush into those types because there’s there’s really no market, right? And so, we’re we are exploring it all, and we’re doing our due diligence on what the real value is. Obviously, our jerseys, I believe, are the most iconic in all of sport. But this is the new reality. We have to find other avenues to generate more revenue, and this is a very, very valuable asset, and we have to move cautiously in that space.”
The iconic brand Penn State demonstrates with the jersey and the tradition and history of the program are areas which for the University to tread lightly around as they honor those areas.
“We’re seeing it in real time, the modernization of college sports, but at the same time honor our past and our tradition, which we are as steeped in tradition as anybody in the country,” Kraft said. “You got to be sensitive to those elements and make the right decision. That’s why we’re taking our time on that. But I will say, the jersey patch has been on the pros, and you go anywhere in the world, then they’re on there. So I think we seem to be a little always one or two steps behind our pro peers, just in the commercialization side, but it’s a necessary, I think, reality to the world we live in.”
The reality of college football and college athletics as a whole are continuing to be a revolving door and will remain so for the foreseeable future. For Kraft and company, it’s going to be a bumpy road to navigate one, but one they’re well equipped to handle if they do things right.
