OF
Editor:
Mark S. Nagel
University of South Carolina
Associate Editor:
John M. Grady
University of South Carolina
Venue
Event
Management
JOURNAL
Editorial Board and Staff:
&
Consulting Editor:
Peter J. Graham
University of South Carolina
Editorial Review Board Members:
Rob Ammon—University of South Dakota
John Benett—Venue Management
Association, Asia Pacific Limited
Chris Bigelow—The Bigelow
Companies, Inc.
Matt Brown—University of South Carolina
Brad Gessner—San Diego
Convention Center
Peter Gruber —Wiener Stadthalle, Austria
Todd Hall—Georgia Southern University
Kim Mahoney—Industry Consultant
Michael Mahoney—California
State University at Fresno
Larry Perkins—RBC Center
Carolina Hurricanes
Jim Riordan—Florida Atlantic University
Frank Roach—University of South Carolina
Philip Rothschild—Missouri
State University
Frank Russo—Global Spectrum
Rodney J. Smith—University of Denver
Kenneth C. Teed—The George
Washington University
Scott Wysong—University of Dallas
Who is in charge? An analysis of NCAA Division I
Arena Management Models
Mauro Palmero—East Tennessee State University
Ming Li—Ohio University
Heather Lawrence—Ohio University
Valerie Martin Conley—Ohio University
Abstract
Financial accountability pressures in higher education force athletic departments to closely examine their expenditures to ensure that cost-efficient managerial approaches are used in all facets of operations, including facility
management. Five distinct management models are currently used by intercollegiate athletic departments to manage
arenas hosting National Collegiate Athletic Association (NCAA) Division I men’s basketball competitions (Palmero,
Li & Lawrence, 2010). Little research is available to help athletic administrators understand each of the models and
determine which model would provide them with the most benefits when contemplating whether or not they should
change the management model utilized in operating their arenas. The purpose of this study was to fill this gap in
the public assembly facility management literature and to assist athletic directors in choosing the most cost-effective
arena operations model possible.
The results indicated that the following factors should be taken into consideration when making the decision to
adopt a certain arena management model: overall satisfaction, venue management and control, revenue and costs,
venue characteristics, university policy, transfer of risks, and enrollment.
Who is in charge? An analysis of NCAA Division I
Arena Management Models
Introduction
Higher education budgets have decreased noticeably in the last decade (Ehrenberg, 2006; Lee & Clery,
2004; Zumeta, 2009). The trickle-down effects of these
budget cuts are impacting many areas of institutional
operations, including athletics. Intercollegiate athletics operations are especially vulnerable since they are
sometimes not seen as a core function of the institution. This scrutiny often demands athletic departments
to closely examine expenditures to ensure cost-efficient
managerial approaches are used in all facets of operations. Athletic facility management is no exception.
The most common strategies athletic departments utilize to try to ensure financial accountability associated
with facility management are: 1) turn the facilities into
auxiliary enterprises, 2) outsource the entire facilities’
operations, and 3) outsource selected facility services
(i.e. concessions, security, and venue booking) (Burden
& Li, 2005).
The athletic director is commonly the final decision
maker responsible for choosing the appropriate management model for all aspects of athletics’ operations.
As leaders of the department most directly benefitting
from the usage of arenas, athletic directors are influential in the decision regarding the facility management model that best fits their needs (Seidler, Gerdy
Journal of Venue and Entertainment Management, Vol. 3, Issue 2
& Cardinal, 1998). Their knowledge of the different
management models and their perception of the models’ advantages and disadvantages are crucial factors in
the decision to utilize (or not utilize) a certain management model (Li & Burden, 2002).
A study conducted by Palmero et al. (2010) found
that five distinct management models (i.e., operated by
athletic department, operated by other university departments, operated as an auxiliary enterprise, operated
by private management, operated by government) are
currently used in NCAA Division I arena operations.
Operated by the athletic department and operated by
other university departments are arena management
models in which the respective department responsible for the venue has complete control and decision
making power over the venue. Operated as an auxiliary
enterprise is a model in which the venue is an independent, financially self-sufficient unit of the institution.
Operated by private management is the model in which
a private management company specializing in one or
more area of facility operations allows the institution/
athletic department to retain all rights while the management company provides a vast array of specialized
services in exchange for a fee or shared revenue. Operated by government is a model in which local (city and
county) or state government operates the venue and
negotiates use by a college athletic department as a tenant (Palmero et al, 2010).
18
Even with existing management models identified,
the literature lacks specific guidance for venue managers and academics alike regarding how to select a
management model that is a good fit for their venue.
This study sought to fill this void in the literature by
using a two-part approach to the investigation. First, an
empirical approach was used to address three specific
research questions that determined the factors related
to choice of arena management model by facility managers. Then, the authors conceptualized a decisionmaking framework grounded in the empirical results.
As an outcome, the study adds to the academic body
of knowledge in the area as well as provides practical guidance to professionals in higher education and
sport facility management about how a facility manager can select an arena management model in intercollegiate athletics. Specifically, the three empirical research
questions were:
1. What are the reasons perceived by NCAA
Division I athletic directors for adopting different arena management models?
2. What are the common constructs that can
be extracted from the reasons perceived by
the surveyed NCAA Division I athletic directors and their levels of satisfaction towards
the adopted arena management model?
3. Are there any components that differentiate the perceptions between the athletic
directors from institutions that adopted
the traditional arena management models
and the athletic directors from institutions
that adopted the emerging management
models, at the NCAA Division I level?
Results are valuable to those in leadership positions
associated with NCAA Division I university administration, university venue management and intercollegiate athletics. Athletic directors armed with this information will be able to make informed decisions that
allow them to (a) adapt to reduced financial resources,
(b) contain costs, (c) acquire expertise, (d) free resources to be utilized in core functions, (e) show accountability to various stakeholders (internal and external),
and (f) achieve self-sufficiency. Other benefits to institutional leaders include the ability to demonstrate accountability to stakeholders and to provide justification
for decisions regarding the selected facility management model.
Journal of Venue and Entertainment Management, Vol. 3, Issue 2
Review of Literature
There are only a few studies that examine issues related to intercollegiate athletics venue management in
the sport management literature. To form a theoretical
foundation for the current study, literature in the areas
of escalating costs in intercollegiate athletics, fiscal accountability in higher education, cost containment in
intercollegiate athletics, and the management of intercollegiate athletic arenas was examined.
Escalating Costs in Intercollegiate Athletics
In NCAA Division I athletics, very few athletic departments are profitable and financially independent
from institutional resources (Brown, Rascher, Nagel,
& McEvoy, 2010; Fulks, 2011; Sperber, 1990; 2000). A
large number of athletic departments depend heavily on
institutional subsidies to cover departmental expenses
and pay for the operational costs of athletic facilities
(Brown et al.; Penry, 2008; Sperber, 1990; 2000). The
most recent NCAA Division I Revenues and Expenses
Report (Fulks, 2011) provided evidence of a growing
financial crisis in Division I intercollegiate athletics.
The report (Fulks, 2011) indicated that 22 out of 330
athletics programs reported positive net revenues for
the 2010 fiscal year, which represents an increase from
14 reported in 2009, and a decrease from 25 reported in
2008 and 2007. In 2010, athletic departments playing in
the Football Bowl Subdivision (i.e., institutions sponsoring football in a division considered highly competitive, commonly requiring substantial financial investments, and featuring the Bowl Championship Series to
determine the champion) received an average of 20%
of their revenues from their institution (Fulks, 2011).
During the same period, revenues received from the
institution accounted for 71% of the revenues received
by athletic departments competing in the Football
Championship Subdivision (i.e., institutions sponsoring football in a division featuring less financial investment and a playoff to determine the champion). The
rest of the Division I athletic departments (i.e., those
institutions that do not sponsor football) received 76%
of their revenues from their institutions (Fulks, 2011).
In 2007, this lack of self-sufficiency translated into $8.2
million dollars (on average) in annual financial burden to NCAA Division I institutions (Zimbalist, 2007).
Four years later, the NCAA Division I Revenues and
Expenses Report data does not show any significant
reduction in the institutions’ financial contribution to
their athletic departments (Fulks, 2011).
19
Fiscal Accountability in Intercollegiate Athletics
Intercollegiate Athletics Arenas
As a microcosm of its institution, an athletic department is exposed to the same accountability and financial pressures as the institution (Burden & Li, 2005; Li
& Burden, 2002; Penry, 2008). As a result, many athletic departments have their own budget and pay their
share of administrative and direct operating expenses
(including debt service and provisions for renewal or
replacement of venues). They are also expected to be
self-sufficient by becoming auxiliary enterprises and
outsourcing functions that are not core activities (Burden & Li, 2005; Li & Burden, 2002; Penry, 2008). These
organizational pressures co-exist with the expectation
of producing winning athletic teams. Many athletic
departments in the Football Bowl Subdivision spend
a considerable amount of funds each year hoping to
produce winning teams. According to Fulks (2011), the
median budget of athletic departments in the Football
Bowl Subdivision exceeds $45 million. Such large operating expenses often prevent athletic departments from
meeting the institution’s financial expectations (Brown
et al., 2010; Sperber, 1990; 2000; Zimbalist, 2007).
Athletic venues are one way in which the institution is publically identified because they are often
large, prominent, and imposing physical structures.
Plus, the community often attends events and identifies collegiate basketball arenas as their “home court”.
Arenas are utilized not only as spaces to host intercollegiate athletic competitions, but also to attract quality
prospective student-athletes, expose sponsors’ brand/
products, inspire donors to contribute and, consequently, provide athletics with vital financial resources
(Jewell, 1992; 1998; Russo et al., 2009). Arenas are also
typically unaffected by weather conditions. This allows
arenas not only to host core events (e.g., basketball,
volleyball, and hockey), but also a wide range of other
events (e.g., indoor track, wrestling, volleyball, gymnastics, concerts, trade shows, and graduations) (Jewell, 1992; 1998; Russo et al., 2009). In addition to ticket
sales, other events offer tremendous opportunities to
generate revenues from space rentals, advertisements,
concessions, premium seating, novelties, and food/beverage sales (Jewell, 1992; 1998; Russo et al. 2009).
In an effort to appease stakeholders, athletic directors are often expected to stretch existing dollars, contain and cut costs, produce additional revenues, and
generate competitive programs (Penry, 2008). To comply with institutional demands, athletic directors must
go beyond department-wide cost containment measures and manage all athletic department units and all
sources of revenue the athletic department has access
to more efficiently.
Along with revenue generation and intangible benefits for the athletic department, arenas also have expenses related to their operations. As such, both sides
of the budget must be managed properly for the venue
to achieve profitability and self-sufficiency (Ammon,
Southall, & Nagel, 2010; Brown et al., 2010; Jewell, 1992;
1998; Russo et al., 2009; Steinbach, 2004). Expenditures
incurred from the use of arenas include: salaries, employee benefits, debt service, sponsor activation, and
facilities operation and maintenance (Ammon et al.,
2010; Brown et al., 2010; Jewell, 1992; 1998; Russo et
al., 2009; Steinbach, 2004). When an arena achieves a
positive financial income statement, it has the potential to support other programs and services within the
athletic department, fund scholarships, and reduce the
athletic department’s dependence on institutional subsidies (Ammon et al., 2010; Brown et al., 2010; Russo et
al., 2009; Shindell, 1993).
At many institutions, a large part of the athletic department’s revenue comes from ticket sales (Denhart,
Villwock, & Vedder, 2009; Fulks, 2011). Together with
cash/alumni contributions, those two sources of revenue account for more than 50% of the total revenue
generated from the athletic departments’ operations
(Denhart et al., 2009; Fulks, 2011). Often, a desire to
increase generated revenues is the main reason why
schools build large stadiums (Denhart et al., 2009;
Fulks, 2011). Based on such circumstances, it is logical
to simultaneously focus on maximizing revenues and
reducing operational costs of intercollegiate athletic facilities. These large amounts of revenue and expenses
related to the management of intercollegiate athletic
venues make the leadership role of athletic directors essential to the financial success of both the facilities and
the athletic departments.
Journal of Venue and Entertainment Management, Vol. 3, Issue 2
Arena Management Models
As mentioned previously, a limited amount of research has been done on arena management models.
The most well-known study by Bankhead (1975) which
focused on large multi-purpose intercollegiate athletic
arenas and their administrative policies and procedures
is now 36 years old. The study described administrative policies and procedures for 52 large multi-purpose
university arenas. Bankhead (1975) found that a ma20
jority of the arenas were operated either by the athletic department or the university business office. Since
that time, many aspects of facility management have
changed and different management options have been
implemented (i.e., auxiliary enterprises and private
management).
Since the Bankhead (1975) investigation, new arena
management models, such as arenas becoming university auxiliary enterprises or being managed by private companies, have emerged. A study conducted by
Palmero et al. (2010) sought to identify the current
management models used in NCAA Division I intercollegiate athletics arena management and, as a result,
five distinct management models were identified. They
are: management by the athletic department, management by other university department, management
as an auxiliary enterprise, management by an outside
enterprise (private management), and management by
government (Palmero et al.). Other scholars have also
provided categories by which to identify management
models such as being operated by their owners, by the
primary tenant, by not-for-profit entities, or by private
management companies (Ammon et al., 2010; Fried,
2010; Jewell, 1992; 1998; Mulrooney & Styles, 2004;
Russo et al., 2009; Steinbach, 2004).
The emergence of private venue management companies (i.e. Comcast Spectator, Global Spectrum, SMG,
etc.) has changed the facility management industry in
professional sport (Lawrence & Moberg, 2009). Specifically, private management companies allow the
ownership (team, venue, or municipality) to retain all
rights while the management company provides specific services (e.g., administration and finance, booking
and scheduling, security, concessions, budget analysis, marketing and sales, operations and engineering,
sponsorships, ticketing, or ancillary services) or the
management of the entire venue (Fried, 2010; Global
Spectrum, 2009; Graham & Ward, 2004; Lawrence &
Moberg, 2009). Although private management is extremely common in professional sport, it has not gained
the same market share in intercollegiate athletics (Ammon et al., 2010; Jewell, 1992; 1998; Palmero et al.,
2010; Steinbach, 2004). A possible reason for such lack
of presence of private management in intercollegiate
athletics is that private management companies appear
to prefer to operate arenas with larger seating capacities (Ammon et al., 2010; Jewell, 1992; 1998; Palmero
et al., 2010; Steinbach, 2004). According to Palmero et
al., a majority of the NCAA Division I arenas have seating capacities of 9,000 or less. By managing venues with
Journal of Venue and Entertainment Management, Vol. 3, Issue 2
a high revenue generation potential, private management companies may obtain a reasonable profit margin
(Ammon et al., 2010; Jewell, 1992; 1998; Palmero et al.,
2010; Steinbach, 2004). Other possible reasons may be
the athletic departments’ preference to retain full control over their arena’s operations or that the current
model has not been evaluated or challenged to date.
Effective management of arenas can help intercollegiate athletics become less of a financial burden to their
institutions. Consequently, the management model
used to operate its arena is an important item in an
athletic department’s self-sufficiency equation. Regardless of the management type, the financial success of an
arena depends on the ability of the management team
to control each of the arena’s functions (e.g., operations,
marketing, tickets, etc.) and to balance conflicting variables (e.g., time, space, monetary resources, staffing,
stakeholders demands and expectations of the general
public) (Ammon et al., 2010; Brown et al., 2010; Russo
et al., 2009).
The decision regarding which venue management
model best fits facilities’ and athletic departments’
characteristics (and needs) depend on a variety of factors. Previously identified factors include the facility’s
revenue potential, in-house expertise, institutional demand, common practices (the way it has always been
done), timing and circumstances, and contractor availability (Jewell, 1992; 1998; Mulrooney & Styles, 2004;
Russo et al., 2009). The combination of these factors
can lead decision makers to choose varying management models to operate their facilities (Jewell, 1992;
1998; Mulrooney & Styles, 2004; Russo et al., 2009; Seidler et al., 1998).
The literature review helped to frame and support
the current study. More specifically, the literature justifies this research by exposing institutional and athletic
department’s contemporary needs to explore alternative models of arena operation. Examining management models, and potentially making a change, can
allow an athletic department to (a) adapt to reduced
financial resources, (b) contain costs, (c) acquire expertise, (d) free resources to be utilized in other functions, (e) show accountability to various stakeholders
(internal and external), and (f) achieve self-sufficiency.
The results of the current study provide the empirical
evidence needed to generate a decision-making framework containing the factors that should be considered
by athletic administrators and university presidents before choosing to adopt, maintain, or replace a certain
management model.
21
Methods
Subjects
Three hundred-thirty athletic directors working
for NCAA Division I institutions that support men’s
basketball were the subjects of this study. The current
study did not include NCAA Division II and III arenas
due to the fact that the basketball programs of Division
II and III institutions usually do not draw significant
attendance figures. Additionally, their operating budgets at these institutions are typically much smaller. The
pressure to use the arena to generate additional revenue
at the Division II or III level is much lower than that
of Division I institutions (Fulks, 2011; NCAA, 2010).
Because of these differences, it is difficult to compare
them to their Division I counterparts. As leaders of the
department benefitting from the usage of arenas, athletic directors have a strong influence on the decision
regarding the facility management model that best fits
their needs (Seidler et al., 1998). Their perception towards various management models is a crucial factor
in the decision to utilize (or not) a certain management
model (Li & Burden, 2002).
Instrumentation
A survey instrument was used in this cross-sectional, non-experimental investigation. Based on the literature review and feedback from experts in the field of
sport and facilities management, a survey instrument
was designed to address the research questions. The instrument was verified and improved through a panel of
experts’ review and a pilot study.
The panel of six experts in the field of sport and facility management was conveniently selected and was
composed of one senior athletic administrator, two
intercollegiate athletic facilities managers and three
scholars in the field of sport management/arena management. The panel reviewed and rated the instrument’s
face and content validity. Via email, they provided their
feedback, by rating and commenting on the appropriateness of each question and the overall questionnaire.
The reliability of the instrument was also tested. Because the study collected responses to different items
on the same instrument at the same time, Cronbach’s
Alpha coefficient was utilized. The reliability test yielded a Cronbach’s Alpha coefficient of .710, ensuring that
the instrument was reliable for the measurement in this
study.
The survey was divided into four parts. Part one
Journal of Venue and Entertainment Management, Vol. 3, Issue 2
asked the respondents to select the definition that best
defines the type of arena management model they currently utilize. Part two asked respondents to rate their
perceptions of a list of reasons for using their current
arena management model. Part three asked respondents to rate their satisfaction with specific aspects of
the adopted model and their overall satisfaction with
their model. The ratings utilized a five-point Likert
scale (ranging from 1- strongly disagree to 5- strongly
agree; 1- highly dissatisfied to 5- highly satisfied). Finally, part four asked the respondents to provide demographic information about themselves and their
institutions.
Data Collection
A letter explaining the purpose of the study and inviting respondents to participate in an online survey
was mailed to 330 athletic directors working at NCAA
Division I institutions that support men’s basketball
(NCAA, 2010). Endorsements from the International
Association of Assembly Managers (IAAM) (currently the International Association of Venue Managers, IAVM), the Ohio University Center for Sport
Administration, and the Ohio University Center for
Higher Education were also enclosed. A week later, an
email was sent to the respondents with a link that directed them to the survey. Two weeks after the survey
was made available, a second email was sent to nonrespondents to encourage them to participate. Due to
the inadequate number of initial survey responses, the
Center for Sport Administration at Ohio University
then directly sent the same email to 46 alumni who are
athletic directors.
The final total number of survey responses was 114
(34.5%), with 105 complete and usable surveys. The
total number of completed responses accounted for
31.8% of the total population of NCAA Division I athletic directors (N=330). To ensure that the responses
of the final 46 athletic directors (who responded to the
invitation from the Center for Sport Administration at
Ohio University) did not unduly influence the results, a
t-test was conducted to compare their responses to the
other 59 respondents’. The results of the t-test presented
no significant difference for all survey items, suggesting
that the data from both groups were consistent.
Data Analysis Procedures
Descriptive statistics were used to quantify the distribution of the different management models among
the population (Table 1). The same statistical method
22
was utilized to analyze perceived reasons for adopting
and the level of satisfaction with a certain management
model. Factor analysis was then conducted to identify
common components or constructs that can be extracted from the items that represent the reasons and
perceived level of satisfaction. Lastly, a discriminant
analysis was conducted to differentiate the perceptions
of those athletic programs using traditional arena management models from that of those using emerging
management models in terms of a number of institutional variables.
I arena management models, conducted in the mid1970’s (Bankhead, 1975) with a focus mainly on large
multi-purpose intercollegiate athletic arenas and their
administrative policies and procedures, found that the
arenas investigated were operated either by the athletic
department or other university departments. The second reason is that, since the 1970’s, some aspects of facility management have changed and new management
options have emerged (i.e., auxiliary enterprises and
private management) (Russo et al.; Steinbach). Another reason for the consolidation of the models was that
The five management models previously mentioned
(i.e., operated by athletic department, operated by
other university departments, operated as an auxiliary
enterprise, operated by private management, and operated by government) were then consolidated into traditional management (athletic department and other
university department) and emergent management
(auxiliary enterprises, private management, and government) categories. Such consolidation was done due
to a number of reasons. The first reason is the fact that
athletic departments and other university departments
are the models traditionally used in intercollegiate athletics (Russo, Esckilsen & Stewart, 2009; Steinbach,
2004). The most well-known study on NCAA Division
the distribution of the respondents among the different
types of arena management models was not homogeneous in this study; the number of schools adopted the
“Operated by a Private Management Company” model
and “Operated by a Government Entity” model were
relatively small.
Journal of Venue and Entertainment Management, Vol. 3, Issue 2
23
Results
Reasons for Adopting a Certain
Arena Management Model
The first research question asked for the reasons
perceived by the NCAA Division I athletic directors
for adopting different arena management models. The
results of the descriptive analysis indicated that the 19
out of 21 reason items had a mean higher than three.
The respondents showed disagreement to only two of
Journal of Venue and Entertainment Management, Vol. 3, Issue 2
the reason items (other schools’ success motivated our
choice of arena management model, M= 2.62; and the
institution does not have an on-campus venue available, M=2.08) (Table 2).
Common Constructs Extracted
To answer the second research question, factor analysis was used to explore the common components or
constructs that can be extracted from the items that
24
represent the reasons, advantages and disadvantages,
and level of satisfaction perceived by the surveyed
athletic directors. The analysis yielded six meaningful
constructs: revenue and costs, venue management and
control, venue characteristics, university policy, overall
Journal of Venue and Entertainment Management, Vol. 3, Issue 2
satisfaction, and transference of risks (Table 3). Table
4 illustrates each of these six constructs’ distribution
among the population, and how these constructs were
labeled to accurately reflect the variables that loaded
under each one of them.
25
Components Differentiating Traditional and
Emergent Arena Management Models
The third research question asked whether there
were any components that differentiate the perceptions
between the athletic directors from institutions that
adopted the traditional arena management models and
the athletic directors from institutions that adopted the
emerging management models. Discriminant analysis
Journal of Venue and Entertainment Management, Vol. 3, Issue 2
was conducted including the six constructs identified
through the factor analysis and demographic information (i.e., years of experience as administrator, seating
capacity, average attendance, community size, and enrollment) which can potentially influence the decision
to adopt a certain arena management model.
26
A stepwise protocol was used to remove any variable
that did not statistically contribute in describing the
groups. The results of discriminant analysis were initially analyzed by examining the Wilks’ lambda (.789)
for each function. One discriminant function was generated with x2 (2) = 24.203, p < 0.05. Two main variables
had significant association between the groups and the
descriptor variables. The results of the discriminant
Discussion and Implications
analysis showed that venue management and control
(.799) and that institution enrollment (-.607) were the
constructs with the most significance in distinguishing
the traditional models group from the emergent models group (Table 5).
ment models, the findings indicated that respondents
tend to desire full operational and financial control over
their venue, as they believed they had the expertise to
manage it. The results further suggested that most of
the respondents concur that their departments need to
reduce costs, maximize revenue, and transfer risks. It is
interesting that the respondents acknowledge the need
for improvement in these areas, but continue to manage their venues in traditional ways. This mindset could
prevent athletic administrators from exploring alternative arena management models that may make their
venues more cost efficient and profitable. The weak
financial results of most NCAA Division I athletic de-
Journal of Venue and Entertainment Management, Vol. 3, Issue 2
This empirical research explored athletic directors’
perceptions towards various arena management models and the factors that differentiate perceptions of athletic directors adopting the traditional-versus-emerging arena management models. When examining the
perceived reasons for adopting different arena manage-
27
partments (Fulks, 2011) indicate that perhaps the way
the departments are currently managed should change,
including the management of their arenas. Supporting
this idea is the fact that respondents reported having
venues on-campus (only 16 respondents indicated they
do not have a venue available on-campus) with the size
and ability to successfully host profitable events to increase their net revenues. Such conditions make these
arenas strong candidates for either being outsourced or
becoming auxiliary enterprises.
When exploring athletic directors’ perceptions towards various arena management models, six common
constructs (overall satisfaction, venue management
and control, revenue and costs, venue characteristics,
university policy, and transference of risks) emerged
from the list of reasons and satisfaction items originally included in the survey. The emergence of these six
constructs from the factor analysis was expected. The
literature on restructuring, outsourcing, and athletic
venues describes those same constructs as part of the
main factors for adopting a certain management model
(Ammon et al., 2010; Fried, 2010; Jewell, 1992; 1998;
Mulrooney & Styles, 2004; Russo et al., 2009; Steinbach,
2004).
These constructs are important for they provide the
essential factors that should be taken into consideration
when considering a change in arena management model.
The administrators’ overall satisfaction is an obvious justification for the maintenance of the model they currently use. The type of involvement the athletic department
either can or wants to have in their venues operations
(venue management and control construct) may prevent
the use of certain management models (e.g. auxiliary
enterprise, and private management) (Jewell, 1992;1998;
Mulrooney & Styles, 2004; Russo et al., 2009; Steinbach,
2004). The revenue and costs construct supports the idea
of choosing an arena management model that efficiently
aids athletic departments in reducing costs and increasing revenue to pursuing self-sufficiency (Denhart et al.,
2009; Fulks, 2011). Lack of size and revenue generation
potential (venue characteristics construct) may prevent
athletic directors from turning their arenas into auxiliary
enterprises or outsourcing them to a private management
company (Jewell, 1992; 1998; Russo et al., 2009; Steinbach, 2004). The existence of an university policy determining the way arenas are to be managed directly affects
the arena management options available to administrators when deciding to maintain or change the way arenas
are controlled and operated (Jewell, 1992; 1998; Russo et
al., 2009). The necessity and ability to transfer risks and
Journal of Venue and Entertainment Management, Vol. 3, Issue 2
reduce loss (risk reduction construct) is influential when
determining which arena management model best fits
the athletic departments’ circumstances and needs (Corbett, 2004; Ender & Mooney, 1994; Russo et al., 2009).
Finally, when identifying the perception components that differentiate administrators adopting traditional arena management models from those adopting
emergent models, the results showed that venue management and control and institution enrollment are
the two constructs with the most significance in differentiating the two groups. It was not surprising to find
that venue management and control surfaced as one of
the constructs that best differentiated traditional and
emergent models given what is known from the literature. The decision regarding which venue management
model best fits facilities’ and athletic departments’
characteristics (and needs) depends on factors including ownership’s desired level of control over the facility,
the facility’s revenue potential, in-house expertise, institutional demand, common practices (the way it has
always been done), timing and circumstances, and contractor availability (Ammon et al., 2010; Fried, 2010;
Jewell, 1992; 1998; Mulrooney & Styles, 2004; Palmero
et al., 2010; Russo et al., 2009; Steinbach, 2004).
It was also not surprising to find that enrollment
would help differentiate between traditional and emergent model groups. Schools with large enrollments
tend to have optimum conditions (large venues and
high potential for revenue generation) that facilitate
the adoption of emergent arena management models
(i.e., auxiliary enterprise and private management)
(Ammon et al., 2010; Fried, 2010; Jewell, 1992; 1998;
Mulrooney & Styles, 2004; Palmero et al., 2010; Russo et al., 2009; Steinbach, 2004). Based on these same
principles, it still remains to be investigated in future
research studies why venue size was not a significant
factor differentiating the two groups.
Arena Management Decision Framework
The primary purpose of this study was to add to the
body of knowledge in sport facility management as well
as provide guidance on choosing an arena management
model to executives in higher education. The empirical results, combined with logical inferences from other
experiences, provided direction and foundation for the
conceptualization and development of the Arena Management Decision Framework (Figure 1).
Overall, the results implied that athletic departments and higher education institutions that seek more
28
Figure 1—Arena Management Model Decision Framework
control over their venues may tend to adopt traditional
arena management models; meanwhile, athletic departments that do not (or cannot) seek as much control
over their arenas tend to lean toward the selection of an
emergent model. It is also logical that athletic departments within larger institutions may be more prone to
choose an emergent arena management model than
those within smaller institutions. Larger schools tend
to possess larger arenas, and larger venues tend to have
greater revenue generation potential, which makes
those venues capable to become auxiliary enterprises
or be a good fit for private management (Ammon et
al., 2010; Fried, 2010; Jewell, 1992; 1998; Mulrooney
& Styles, 2004; Palmero et al., 2010; Russo et al., 2009;
Steinbach, 2004).
The Arena Management Model Decision Framework can be used as a guide for selecting an arena
management model with the basic assumption for this
framework being that the athletic department is curJournal of Venue and Entertainment Management, Vol. 3, Issue 2
rently managing the area internally and is expected to
reduce costs and maximize revenues. The reason for
the adoption of these assumptions is that 63% of the
NCAA Division I athletic departments operate their
arenas internally (Palmero et al., 2010). Plus, it is clear
that there is widespread pressure to reduce costs in intercollegiate athletic operations.
To illustrate the use of the Arena Management Model Decision Framework, the following steps are examples of how an athletic leader might navigate the decision to maintain or change arena management models.
First, the athletic administrator should assess their
level of satisfaction with the use of the current model.
If they are satisfied, they should maintain its use. However, if they are unsatisfied, they should consider another model. The next step is to consider the amount
of control administrators want to have over the venue,
the availability of in-house expertise, and the university
policies on arena management. Depending on institu29
tional policies, administrators may or may not have the
ability to change the model. In situations where the administrators have power to decide how to operate the
venue, they should also consider the need (or desire) to
transfer risk. Lack of in-house expertise and opportunity to transfer risk may lead decision makers to contract a private management company to operate their
venues. Finally, administrators should consider the
size of the institution, the venue’s ability to host outside
events, and the venue’s revenue generation potential.
Larger venues within larger institutions and with good
revenue generation potential have great chances to succeed either as auxiliary enterprises, or to be operated by
private management companies.
Recommendations for Future Research
In contemporary venue management, private management is a model that is commonly utilized to operate professional-level sporting venues (Jewell, 1992;
1998; Steinbach, 2004). However, private management
does not currently have the same presence at the college level (Palmero et al., 2010). It would be interesting
to conduct a qualitative study involving all of the major
private management companies to better understand
the common criteria used to determine the feasibility
of taking over the operation of a certain college venue. To complement the study, athletic directors could
be surveyed to collect their perceptions regarding the
identified services and advantages of outsourcing arenas’ operations to a private management company.
Using the Arena Management Model Decision Framework, athletic directors could be asked to indicate their
level of willingness to outsource their venue operations.
This future study’s response rate could be enhanced by
sending the surveys to senior athletic administrators
responsible for facilities, in addition to the athletic directors.
use. Six common constructs (overall satisfaction, venue management and control, revenue and costs, venue
characteristics, university policy, and transference of
risks) were identified as the essential factors that should
be taken into account when considering a change in
arena management model. Venue management and
control and institution enrollment were the constructs
which better distinguish the traditional-models group
from the emergent-models group. Athletic departments seeking more control over their venues may tend
to adopt traditional arena management models, and
departments that do not (or cannot) seek as much control tend to select an emergent model. Because larger
schools tend to possess optimum conditions for their
arenas to either become auxiliary enterprises or be a
good fit for private management, athletic departments
within such schools may be more prone to choose an
emergent arena management model than those within
smaller institutions. These factors were the foundation
for the development of the Arena Management Model
Decision Framework that may provide guidance to
higher education leaders who may be exploring the
management model that best fits their needs.
Conclusions
The present study demonstrated that there are a variety of factors that should be part of any discussion in
higher education related to intercollegiate athletic arena
management. Although traditional arena management
models remain the dominant approach in intercollegiate athletic arena management, emergent models
(e.g., auxiliary enterprise and private management)
should be considered as a viable option for institutions
moving forward. A majority of the respondents seem to
desire full operational and financial control over their
venue, which may prevent them from exploring arena
management models other than the one they currently
Journal of Venue and Entertainment Management, Vol. 3, Issue 2
30
References
Ammon, R., Jr., Southall, R. M. & Nagel, M. S. (2010).
Sport facility management: Organizing events and
mitigating risks (2nd ed.). Morgantown, WV: Fitness
Information Technology.
Bankhead, W. H. (1975). Administrative policies and
procedures for large multi-purpose arenas on university campuses. Doctoral dissertation, Louisiana State
University—Baton Rouge.
Brown, M. T., Rascher, D. A., Nagel, M. S. & McEvoy, C.
D. (2010). Financial management in the sport industry.
Scottsdale, AZ: Holcomb Hathaway Publishers Inc.
Burden, W., & Li, M. (2005). Circumstantial factors and
institutions’ outsourcing decisions on marketing operations. Sport Marketing Quarterly, 14, 125–131.
Corbett, M. F. (2004). The outsourcing revolution: Why
it makes sense and how to do it right. Chicago, IL.: Dearbon Trade Publishing.
Denhart, M., Villwock, R., & Vedder, R. (2009). The
academics athletics trade-off: Universities and Intercollegiate athletics. Washington, DC: Center for College
Affordability and Productivity.
Ender, K. L., & Mooney, K. A. (1994). From outsourcing to alliances: Strategic strategies for sharing leadership and exploiting resources at metropolitan universities. Metropolitan Universities, 5(3), 51–60.
Ehrenberg, R. G. (2006). The perfect storm and the
privatization of public higher education. Change,
39(1), 46–53.
Fried, G. (2010). Managing sport facilities, Champaign,
IL: Human Kinetics.
Fulks, D. (2011). 2004–2010 NCAA Division I revenues and expenses report. Indianapolis, IN: The National Collegiate Athletic Association.
Global Spectrum (2009). Full/contract management.
Retrieved on June 19, 2009 from http://www.globalspectrum.com/region/en/why-private-management.
aspx.
Graham, P. J. & Ward, R. (2004), Public assembly facility management: Principles and practices. Coppell, TX:
International Association of Assembly Managers.
Jewell, D. (1992). Public assembly facilities. Malabar, FL:
Krieger Publishing Company.
Journal of Venue and Entertainment Management, Vol. 3, Issue 2
Jewell, D. (1998). Privatization of public assembly facilities management. Malabar, FL: Krieger Publishing
Company.
Lawrence, H. J., & Moberg, C. R. (2009). Luxury suites
and team selling in professional sport. Team Performance Management. 15(3/4). 185–201.
Lee, J., & Clery, S. (2004). Key trends in higher education. American Academic, 1(1), 21–36.
Li, M., & Burden, W. (2002). Outsourcing sport marketing operations by NCAA Division I athletic programs:
An exploratory study. Sport Marketing Quarterly, 11(4),
226–232.
Mulrooney, A., & Styles, A. (2004). Managing the facility. In B.L. Parkhouse (Ed.), The management of sport:
Its foundation and application (pp. 45–52). New York:
McGraw-Hill.
National Collegiate Athletic Association. (2010).
2009 National college men’s basketball attendance
report. Retrieved on May 20, 2010, from http://
web1.ncaa.org/web_files/stats/m_basketball_RB/
Reports/2009mbbattend.pdf.
Palmero, M., Li, M. & Lawrence, H. (2010). Is private
management of NCAA Division I basketball arenas a
trend? Presentation at the 2010 NASSM Conference.
Penry, J. C. (2008). Forecasting the financial trends facing intercollegiate athletic programs of public institutions as identified by athletic directors of the ACC, Big
12 and SEC conferences. Doctoral dissertation, Texas
A&M University – College Station.
Russo, F. E., Esckilsen, L. A. & Stewart, R. J. (2009).
Public assembly facility management: Principles and
practices, (2nd ed.). Coppell, TX: International Association of Assembly Managers, Inc.
Seidler, T. L., Gerdy, J. R., & Cardinal, B. J. (1998). Athletic director authority in Division I intercollegiate
athletics: Perceptions of athletic directors and college
presidents. International Sports Journal, 2(2), 36–46.
Shindell, W. G. (1993). Facilities management issues. In
M.J. Barr (Ed.), The handbook of student affairs administration (pp. 12–22). San Francisco: Jossey-Bass Publishers.
Sperber, M. (1990). College sports Inc.: The athletic department vs. the university. New York: Henry Holt and
Company.
31
Sperber, M. (2000). Beer and circus: How big-time sports
is crippling undergraduate education. New York: Owl
Books.
Steinbach, P. (2004). Special operations: Arena management firms help schools boost revenue from behind
the scenes. Athletic Business, 28, 24–28.
Zimbalist, A. (2007). College athletic budgets are bulging but their profits are slim to none. Sports Business
Journal, 10(9), 26.
Zumeta, W. (2009). State support of higher education:
The roller coaster plunges downward yet again. The
NEA 2009 Almanac of Higher Education, 1, 29–43.
Journal of Venue and Entertainment Management, Vol. 3, Issue 2
32