LSU Football Money – Why Les’ Seat is Hot

Gerry DiNardo didn’t know pressure. Surely he knew you couldn’t lose seven games and then eight games and expect to remain LSU’s head football coach, but he didn’t know real pressure.

In DiNardo’s penultimate year – 1998 – LSU’s Athletic Department budget was about $28 million. The Tiger Athletic Foundation pulled in about $9 million in donations and the SEC handed out just over $5 million to LSU. A sideline-seat season ticket in Tiger Stadium cost $204. DiNardo’s 4-7 record that year didn’t get him fired, but also didn’t get him a raise. He’d still make $585,000 the next year.

Les Miles – he knows pressure.

In the decade between DiNardo’s fatal 2-8 season in 1999 and Miles’ disappointing 9-4 one last year, LSU Athletics – and football as its driver – has become a different beast.

The university-set Athletic Department budget has grown to $81 million, and Equity in Athletics data shows total revenue cracked the $100 million mark in 2008-09. The TAF brings in just under $40 million a year. The SEC handed LSU $13 million last year. Miles is the $3.75 million lynchpin of a much, much larger enterprise than DiNardo could have imagined. Note that the chart above is not intended to be an accurate accounting of all revenue; just the growth of the associated revenue channels.

Obviously major college sports has become a huge business over the past decade (Alabama’s athletic budget was also just $35 millon in 1998; they brought in $103 million in 2009). And LSU – thankfully – has fully participated. The Tigers’ athletic program would compare favorably with any in the nation. That LSU wants to be on the Alabama level rather than the South Carolina level – the Cocks had a budget similar to LSU’s in 1998 but “only” generated $76 million in 2008-09 revenue – is a good thing.

But for all the talk of fat SEC TV contracts and BCS bowl payouts, it’s the cash of Tiger fans fueling this machine. Football ticket sales – not counting Tradition Fund contributions – totalled $25.6 million in 2009. LSU budget documents suggest football Tradition Fund contributions brought in another $18.8 million. Cash donations to TAF totalled almost $32 million. Without digging deep, there’s $76 million LSU pulled directly from its fan base last year.

Yes, LSU has expanded Tiger Stadium since 1998. But the tripling in ticket revenue didn’t come from tripling the number of seats. It just costs a lot more to be a Tiger fan now.

The fan who was once sold that sideline season ticket for $204 is now asked to pay at least $900 for the right to buy the ticket for $350. That’s one of the big reasons the athletic department gets by without state funds. The TAF has invested $160 million in new facilities since 2000, and those hefty donations and ticket sales are what the TAF is counting on to pay off its debt. Interest payments alone total more than $4.6 million per year and the foundation has $127 million in outstanding bond debt.

There is a lot of money being given to LSU from fans, and the program needs the money and the facilities to compete with the Alabamas of the world. Nobody wants to pay more for the privilege of sitting in Tiger Stadium, but season tickets are sold out again this season, so the economics still make sense.

There’s also a cycle at work – as LSU has more success, it attracts more dollars. As it has more dollars, it has better facilities and personnel. As it has better facilities and personnel, it attracts better talent. And as it attracts better talent, it has more success. LSU is among the nation’s elite football programs in terms of recent success, dollars, facilities and talent. Personnel – that’s an open question. But we pay them like they are elite.

Money is the key to all of that, which brings us back to Mr. Miles and the pressure atop him.

As has always been the case with coaches, Miles can’t expect to field losing teams and keep his job. But the guy is considered a hot-seat coach despite winning a national championship, delivering two other 11-win seasons and never winning fewer than eight games at LSU. The reason for that may not be obvious, but I think it’s simple. Confidence.

I think I’m like a lot of LSU fans who have never really been all that confident in Miles’ capabilities. He’s won, but his program often seems to be teetering on the brink of disaster. And, in fact, he blew LSU’s shot at the BCS title game in 2007, but managed to Forrest Gump his way into it anyhow. Then, of course, there was the Ole Miss game last year. Maybe more than any single event in Miles’ LSU tenure, that episode was a confidence destroyer. That’s what we’re seeing now – Les hasn’t “lost” on the field, but he’s lost a lot of fan confidence over the past two seasons. The eight-win season, the horrible offense, the quarterback troubles, the Ole Miss meltdown and the Capital One Bowl failure are all adding up now.

Confidence and money have a very close relationship. The “con” in Con Man, after all, stands for “confidence”. When people have confidence in something, they are more willing to buy or invest in that thing. People handed billions over to Bernie Madoff based on nothing but confidence. And LSU fans buy their pricey tickets and donate their hard-earned dollars because of the confidence they have in the program. [ed note: That is not to say that LSU is running a "con game" like Madoff - I'm just illustrating the connection between confidence and money.]

Today, things still seem to be OK. Season tickets are sold out and TAF money is still rolling in. But the stakes these days are huge – when you demand high prices that comes with high expectations. And LSU has become quite dependent on all that money, what with the big operating budget, expectation of being self-supporting, $160 million in facilities to pay off and more in the works.

If Miles continues to erode confidence, that will start to show up in LSU’s and TAF’s bank accounts. And because of the increasingly high stakes, it won’t take losing on the field to put Miles out of a job. It’ll just take the loss of confidence. If the powers in the athletic department and TAF think Miles is a significant drain on contributions, he’ll be gone and a marketable new coach will be brought in to rebuild the confidence – and regain the dollars.