College Football

This case is made to be interviewer-led. Therefore the interviewer should guide the interviewee through the interview. The questions should be read out and shared with the candidate.

The following framework/structure provides an overview of the case:

I. Revenue

1. What is the revenue per year?

A good answer would include:

• Revenue from student fees:

• Revenue from game guarantees:

• Revenue from ticket sales:

• Revenue from concession:

• Total revenue:

II. Costs

2. What are the resulting costs?

A good answer would include:

• Salaries:

• Equipment:

• Travel:

• Stadium rent:

• Scholarships:

• Recruiting

• Total costs:

Preliminary conclusion

The programme is able to break even under the given assumptions.

III. Investment

3. Should the college build a stadium in order to gain membership in a powerful athletic conference (league)?

Revenue:

• Attendance:

• Paid attendance:

• New ticket revenue

• Saving on stadium rental costs

• Incremental revenue:

Costs:

• Incremental operating costs:

• Incremental total costs:

Preliminary conclusion

• There would be an incremental revenue of $0.4m.

• Therefore the new stadium needed to enter the better league seems feasible.

IV. Conclusion

4. What is your recommendation to your client about introducing its own football team?

• Our client should introduce its own football team.
• The college should only build a stadium.
• The programme can break even/increase revenue and will also increase the visibility of the university and enhance the college experience of its students.
• Possible risks:
  • Attendance may be lower than estimated. This could be overcome by selling the tickets already before starting the team.
  • Cost of stadium could be higher than estimated. Other possibilities could be explored (continue to rent/partner with city to build multi-purpose stadium).

Next tasks:

• Verify assumptions
• Start recruiting
• Start increasing student fees
• Start talks with city to rent stadium.

What other ways are possible to increase the football program profits?

Possible solutions:

• Use stadium for advertising.
• Work with uniform/apparel companies to get free uniforms.
• Sell television/broadcasting rights.
• Indirect increase of student enrolment
• Negotiate for higher guarantees.
• Introduce coaching compensation based on performance.
• If a stadium is built, it could be rented out for other events.
• Reduce the number of staff/employees.

More questions to be added by you, interviewer!

At the end of the case, you will have the opportunity to suggest challenging questions about this case (to be asked for instance if the next interviewees solve the case very fast).