Dec. 18, 2012

DR. SANTA J. ONO
UNIVERSITY OF CINCINNATI PRESIDENT

Opening Comments …
“It’s a pleasure to welcome all of you including those of you watching on the internet as we share our plans for the renovations of Nippert stadium. I want to firstly acknowledge Whit Babcock and his leadership. His first year on the job has shown, time and time again, that we have one of the best athletic directors in the nation. We speak frequently about a commitment to compete at the highest level and this project that we are going to discuss today is a testimony to that. The Bearcat Nation is excited about our future and our vision for athletics and I am grateful for our University of Cincinnati board of trustees for sharing this vision and commitment. We want to make sure that our vision is fiscally sound before construction begins, hopefully sooner rather than later. Additionally, no student fees or general operating dollars will be used in this renovation of Nippert Stadium.
“To me, UC really is the hottest college in America and one of the reasons for that is our historic Nippert Stadium. UC truly is a unique place with passion and energy and our football stadium right here in the heart of our uptown campus has been recognized even outside of Cincinnati as one of the great stadiums of America. This project will be a positive one for the university as well as the department of athletics. It will benefit more than just our football program. Nippert is part of our brand, it sits in the heart of our campus and it is a part of the UC student, alumni, and fan experience and part of our history. It is so much part of Bearcat Nation in so many ways.
“This project adds to the amazing momentum and energy on our campus. As president of UC, I have the responsibility for all facets of the university. I see that athletics can serve as a tremendous portal for national visibility for UC as a whole and for the city of Cincinnati. It drives enrollment building, pride among our alumni and fans and introduced UC to those who may never have the chance to visit our campus otherwise. It is with great pleasure and Bearcat pride that I turn this press conference over to Whit Babcock to further elaborate on this exciting project and process. Whit will address any questions at the end. I just want to say that now is the time and this is the place.”

WHIT BABCOCK
UNIVERSITY OF CINCINNATI DIRECTOR OF ATHLETICS

Opening Comments …
“I’d like to welcome you as well as a group today. It’s an exciting day and thank you Dr. Ono for the kind remarks. I did want to elaborate further on our proposed plans for Nippert Stadium. We’re doing this press conference for a number of reasons, but one is that there’s been bits and pieces of this that have come out and we just want to bring it all together and educate our media and our fan base on what our vision is moving forward. During my remarks I’ll cover a few things. I’ll certainly talk about the project in general, we’ll also have these renderings to share on our GoBearcats.com website shortly after this, and I believe we have a DVD or CD to give to the media as well, but I’ll talk in basic terms about the project. I’m an athletic director, so I like to talk a lot about winning and I’ll talk about why this project is a win for the department of athletics, I’ll talk about why it’s a win for the university and then I’ll touch briefly on the topic of Paul Brown stadium and answer any questions that you may have.”
“Firstly, some basic information regarding our proposed Nippert Stadium expansion. Actually, there’s some people that I need to thank and I don’t want to do it in name, but Mike Thomas would be one of them.  There were a lot of feasibility studies done and different looks at the stadium, a lot of things that I was fortunate to inherit when I came in. And it was everything from digging down, to going out and everything in between, but I really chose to lock in after a number of studies specifically on the west side of the stadium and on premium seating. The project that you see before me today, the approximate cost of the project would be between $60 and 70 million. It would elevate our capacity and, contrary to some recent reports, the total capacity number that it will increase our stadium to has not been finalized. We have a little flexibility as we get going. The west pavilion or whatever the name of this will be as we move forward just to give you an idea as far as scope will be approximately one story higher than the current press box and will be approximately two to three times as long and will wrap in with nice symmetry on the west side to match up with the east side. It will have four main levels to it starting at the top and working down. The top level will be a camera deck up on the fourth floor. The third floor will be for our press facilities like radio booths, coaches’ booths, and things that those entail and also some suites on the third level. The second level will be all suites. And then the first level will be an extensive club level and will have outdoor seating to get a feel for the game with comfortable seating, and then an indoor seating to come back into and then some loge box seating, which is a relatively new concept in premium seating. So you have four levels with it being approximately one story taller and about two to three times the length of the current press box. All of our conceptual renderings and seating concepts were also based on the market feasibility study that I was fortunate to inherit when I got here. All of our expansion at this time will be in the form of premium seating, but this project will also include improving the fan experience on the concourse level, we all know it can be really tight on the west side and this will entail opening up some concourses improving our point of sale, traffic flows, restrooms, concessions and just making Nippert a little more fan friendly than when it was built in 1924 I believe. Here’s an interesting fact for you. Since 1992 when our press box was completed, approximately 71 of the 76 BCS schools have made major renovations to their football stadiums. And when I say 76 BCS schools that also include all of the incoming BIG EAST schools. A significant number of our peers have made major renovations since we last did the press box. In addition, there are many non-BCS, or FCS formerly 1-AA schools that have embarked on premium seating models, so the premium seating model works and there’s not many schools that are out there that are simply adding bleacher seats in their expansion. To my knowledge all of the expansion that is occurring today is at least a piece if not all of it in premium seating. We do not yet know a definitive time table for the construction. That will depend primarily on our fundraising efforts, but once started it would take approximately 12 to 18 months on the construction and at least the way that we’ve been presented to do it is to build the new part alongside the current press box and then at the conclusion of that football season to drop the existing press box and have it built back up the following year so that we would not have to leave Nippert Stadium or do without a press box being there. We are not yet in a position to sell suites and club seats or loge boxes, but we will have a portal to sign up and receive information about that on our website GoBearcats.com. I will say this, people that are interested in receiving information on seating when this is built, priority will be given to those who give to the project philanthropically in the first place. Our first fundraising ask will be in the form of leadership gifts at the six, seven and eight-figure level. People will be able to pledge those over a number of years, but we will also develop an avenue for gifts of any amount. There is strength in numbers and we’re going to need the entire bearcat family to invest in this. We need everyone.
“The next update will provide our progress and I’m sure people will be curious, but I’d really just like to set this out there that maybe three or four months from now we’ll provide you an update, possibly around the time of our spring  football game. It’s not that I’m opposed to periodic updates, but I’d like to turn all of our focus to a heck of a men’s basketball team, a women’s basketball team, our other winter sports and the other duties of the athletic department. So we’ll have another update as we get closer to the spring football game on this. I should certainly mention that we are grateful for the support buy in and partnership of Dr. Ono and the Board of Trustees. I’m thrilled with that. They have a commitment to excellence across the spectrum at UC both athletically and academically. So that’s some basic information for you on the project, but to get to the winning analogy here are some reasons why we feel it will be a win for our athletic department. And I want to be really clear on this because it’s an important point. The main reason why we are doing this project is to change the financial model in the athletic department. The current financial model we have in the athletic department is both challenging and probably unsustainable. That is the key reason, to change our financial model. Yes, we want to increase the fan experience, but we really want to change the financial models. We want to compete on the highest level, that’s been said before, but if we want to change as a department and improve we cannot simply do what we have always done.
“Balancing our budget in this department has been a challenge in recent years; we’re working hard at that. Our budget is one of the lowest in all of the BCS conference schools currently. It’s actually a testament to our staff and our coaches for overachieving, but we’re one of the lower ones right now.
“Our budget is one of the lowest of any BCS institutions for three reasons. One – we have a below-market television contract. That’s something that’s certainly been well documented and talked about in the BIG EAST. That will work itself out in due time. But that television contract is not something that Dr. Ono and I have direct control over. So that’s one reason.
“Another reason that our budget has had some challenges, and I want to make sure I elaborate on this too, is because of some of the debt service remaining on our Varsity Village project. The reason I want to say I want to elaborate on that is I’ve gotten to know Bob Goin very well, Bill Mulvihill, who was here at that time. That Varsity Village project was incredibly visionary; so I’m not here to critique it in any way. I enjoy their vision tremendously, but some of the debt left on that Varsity Village is still remaining and that’s something that we pay for. Again I commend them on their vision. I just talked to Bob Goin the other day and he said, ‘Hey, Whit, if I had been there a little longer, I would have gotten to Nippert and Fifth Third (Arena), too.’ But that debt is a bit of a challenge for us that we need to overcome. And I do believe there are some creative ways we can restructure that with the help of the university and get working on that.
“The third reason that our budget is lower compared to our BCS peers, quite frankly, is we don’t generate enough revenue off of our football stadium. That part, I do have some control over and that’s you see before you today. We have the lowest number, or very close to it, of premium seating out of all the BCS schools, and again this is our opportunity to change that financial model. This Nippert Stadium expansion project also provides some very attractive fundraising and recognition opportunities; whether it’s naming the new facility, different floors within the facility, or some of the spaces within there. But I do need to be very clear on this too – the stadium will always be Nippert Stadium. Anything that’s been written contrary to that is absolutely false. Now we may have some (sponsorship) opportunities on the field and, again, with the facility and other things, but it is Nippert Stadium first and foremost and it will stay that way.
“This new project will also provide some very nice corporate partner and sponsorship inventories. On one of the renderings you’ll see new ribbon boards; new things that we can engage corporate sponsorships and that will also help us change our revenue model.
“As I touched on earlier, another exciting piece of it is the fan experience; opening up the concourses, again the concessions, the restrooms, the point of sales, merchandising and some other opportunities there.
“The resulting new and improved financial model and revenue streams that I’ve just mentioned would enable some other things to benefit our department in other areas other than football. It would enable us to potentially reinstate some scholarship opportunities that were taken away from some of our Olympic sports in previous years. The thought on this project is, ‘The rising tide raises all boats.’”
“I’d also like to, in no particular order, clean up the Armory (Fieldhouse); we’d like to work on that. I’d like to make improvements to Fifth Third Arena. I’d like to make improvements to: Our technology and graphics; the way our teams travel; our team training table and dining facilities; and increase staffing and more. So, again, this it to change our financial model and elevate all of our programs, across the board.
“A new financial model would also help us hire and retain quality coaches across the board in all of our sports. I should stop to note that none of this project was put in as any demand – in any way, shape or form – with our previous football coach, or our current one. Did I mention it to both of them? Absolutely I did. But it was never a demand and this is not coming forth because of any negotiations with any coach. We’ve had this on our mind for quite some time.
“Also I want to say about the project; there is relatively, and if you can call $60 to 70 million relatively low, financial risk investment with positive return on investment with this project. What I mean by that is this: On the modeling that we’re running on our pricing right now, which I’m not ready to get into suite pricing and club seat pricing. Let’s see if I can put this in a way that makes sense. We plan on selling the whole thing out, but if we operate on basically a 75-percent occupancy rate, over a period of years, just the revenue from the suites and the club suites could help us pay for the facility. Now if we’re going to do a facility like this and invest that kind of money, though, and we’re going to change the financial model of the department; we’ve got to do a heck of a lot better than breaking even. That’s why we’re going to start with an aggressive fundraising campaign, and the more that we can raise on the front end, is the more profit or revenue above and beyond the cost of our house payment, so to speak, on this facility. That’s why we’re going to get started on that. I do not yet today have a magic number that we’ve got to hit for the wrecking ball to get going over there, but we will continue our financial modeling. But we will not necessarily, I hope we do, have to knock out all $65 million in fundraising, but the more we can do on fundraising gives us more return on our investment on the seat revenue. Again, if we’re going to embark on something like this and I’m going to take it to Dr. Ono, it’s darn sure going to be fiscally sound before we start.
“Nippert is also our brand. Since 1904, I saw a drawing or something the other day, I know this stadium was built in the (19)20s, in 1904 when they were playing at McMicken Hall and all the areas around it; that’s when they first identified the site of Nippert Stadium. Nippert is part of our fabric; it’s part of our brand. It separates us; it makes unique. It’s our edge; there is nowhere like it in the country. There’s no better home-field advantage than Nippert Stadium.  It’s also an integral part of our overall college experience for our student body.
“Last year after we played games at Paul Brown Stadium, we conducted fan and student surveys about both facilities and they came back overwhelming in support of Nippert Stadium. They did point out some things about the concourses and the lack of premium seating, which we’re obviously addressing here. But our fans had spoken loud and clear. Our student-athletes and our coaches also preferred to play at Nippert. Now that was not surveyed; that was simply me walking around and talking to all the players last year and getting their feedback, and they love playing here on their campus, in front of their fans.
“Another key part of the project that’s a win for the athletic department is it will facilitate a lot more corporate engagement with us, right? We have suites and club suites; all of a sudden we have entertainment options. We have nine Fortune 500 companies. We have a very diverse corporate community and a key piece of this will be drawing in those partners, not only to our athletic department, but to campus. Lastly, as far as a win on the athletic-department side, this project exemplifies and reinforces our commitment to compete at the highest level.
“Moving on, now why the Nippert Stadium project will be a win for the university, and Dr. Ono touched on these. There will be no university general operating funds used for this. This facility will solely be built from revenues that we generate in the athletic department. It will also provide another signature architectural structure in the heart of our campus, which has been ranked by numerous publications for its beauty. This Nippert expansion will provide another opportunity for shared space; collaboration, event hosting, faculty, staff, students, alumni, perhaps even some dining facilities on non-game days in a dynamic environment. It is literally tied in to a connection with campus. If you notice on some of the drawings, there will be skywalks that come right out of TUC (Tangeman University Center); at least this is our concept today, where you come in across from McMicken Commons, right through TUC, through some dynamic skywalks, right into the back of the press box. That will also alleviate congestion down on the concourse. But you know if we build it at UC, it is not going to be a rectangular, boring building. It is going to be really sharp.
“The project will also allow us as an athletic department to enhance the visibility and serve as the front porch for the university. That’s a role we take very seriously. I’m well aware that UC is much bigger than the athletic department. We just like being a key part in higher education and serving as that front porch. Anything that we can do to add to the positive momentum and buzz on this campus right now, we’re thrilled to do.
“As a side note, just for this past season, the Pitt game, the Louisville game and the Virginia Tech game, over 5 million households viewed our athletic contests. Now I don’t know how many people were sitting in each of those households, but you can do the math. And that’s just for three games and the visibility that we’re talking about. The PR value that we can add to campus, we want to keep achieving at a very high level. The corporate engagement I mentioned on the suite aspect is also good for campus; I touched on that. This project will also give us the potential, which I’m thrilled with this; we keep selling out our student section. Hopefully it’ll give us the ability to expand that as well. That’s a positive for campus. And then the timing of this project I feel like is a positive for campus. We’re coming down to near the closure of the Proudly Cincinnati $1 billion campaign. Hopefully we can fit this project in a window of a couple years and get it done before the university embarks on its next capital campaign. This project will also, as far as a win to the university, will provide some nice entertainment options, hopefully some of our academic areas, as well as the (UC) Foundation. We’ll entertain in suites and club suites and all that. I think the fundraising piece for the academic areas can be achieved there, as well. So that covers a few reasons as to why I think this is a win for the university.
“Moving on, I want to touch briefly on the Paul Brown Stadium aspect, because that’s a question that I get asked a lot. I’m certainly not anti Paul Brown, but I’m pro Nippert. But here’s what I do like. I do like the opportunity to play an occasional game down at Paul Brown Stadium. The Oklahoma game, the Ohio State game years ago, the occasional game down there with this accordion-stadium concept; I really like that. We can play at Nippert, but then on the occasional game where we really need to go big, we can accordion-out our stadium and play down there if we need to. But I also want to emphasize this when we play at Paul Brown, and it’s a beautiful facility, we’ve got to do what’s in the best interest of UC. That’s what I’m paid to do, the president is. That’s what this project is about. So a renovated Nippert Stadium, plus an occasional game at Paul Brown Stadium is a wonderful option and that’s where we’re positioned today. However, before you ask the question, moving all of our games down to PBS, does nothing to improve our financial model. In fact, in some ways, it’s a challenge. A half-full stadium is never a positive; sold-out stadiums are. If we were to move all of our games down to Paul Brown Stadium, we wouldn’t control all of the ticket revenue down there. We wouldn’t control all of the concessions. We wouldn’t control all of the parking. We wouldn’t control the suites. We wouldn’t control the entire sponsorship inventory down there available to us. We also would not have any praising opportunity down there, recognition opportunities, et cetera. And just to give you an example, and I really commend the previous administration here for trying it, I would’ve done the same thing; last year, not this season, but the season before, UC moved the West Virginia game and the Louisville game down there, and I believe our attendance was 48,000 in one and 42,000 in the other. We actually lost money on those two games, six-figure dollars, on those two games down there; compared to if we had sold out Nippert. And that’s no offense directed at the Bengals; they’ve got a business to run too. It’s just all of the things that I mentioned. It’s a lot broader than the number of people you put in the seats; how you generate revenue and how you get the return on your investment. So, again, the occasional game down there, yes, but I think I’ve driven that point home that I’m pretty pro Nippert, and that’s what we’re about.
“In addition, if we were to move our games to Paul Brown keep in mind that would involve moving approximately 200,00 visitors a year that come to Nippert, off of our campus. Downtown on The Banks are great, but out of those 200,000 visitors a year that come to our home football games there are a lot of kids in those stands that see UC for the first time that come to school here on and on and on. I’m much more interested in keeping those 200,000 visitors on our campus and, quite frankly with the economic development, the Uptown District. I’m also not interested in moving our tradition, our homecoming and our student experience downtown at this time. And then furthermore, it would lose our brand. I’ve touched on it. Nippert is our fabric. It’s what brings us together as Bearcats.
“So for those reasons, we believe in the model of a renovated Nippert in a financial responsible manner. We believe in adding premium seating and improving the fan experience on game day at the concourse level. We believe in changing our financial model for better, for the improvement of all sports and programs. And we feel that is in the best interest in UC and is a solid plan.
“In closing in my opening press conference I guess about 14 months ago, I touched on three things that would be my three core values or guiding principles. One was a commitment to comprehensive excellence. This project accomplishes that. Two, we talked about a focus or an enhancement on the student-athlete experience. And this project will do that and more than just football. Three, we talked about it being our responsibility to engage the community. This project will do that and will engage the community on our campus.
“So we are excited to unveil this rendering, give you all a glimpse into our future and our vision and to embark on our fundraising campaign. As President Ono mentioned and I mentioned during Coach Tuberville’s press conference, it applies in this case too: now is the time and this is the place.”

On if UC has any gifts in hand and if he sees construction beginning before next season …
“We have some commitments and we’ve had a small meeting with a key group of constituents. We mentioned to them about the project, and that we would be coming to ask them. So I’d rather not get into dollars today, but I do not see this happening in time for the 2013 season. Again, I really don’t want to put a time frame on it. We all want it to be built as soon as possible, but it’s not going to happen without the help of our Bearcat family. I think we have some people that will step up at high levels, but also need the help of everybody across the board. Again, I hope people will stay locked into GoBEARCATS.com and find out how to do that.”

On if construction will help with conference realignment …
“I’ll just say this: it’ll put us in a leadership position within our conference. Anytime we can put UC in a favorable light and achieve to be the best, we want to do that.”

On if he has target of number for possible attendance following the renovations …
“[Forty thousand] is a nice round number that we certainly like, but a lot of it will depend on what will fit in the footprint and then when we do get into our sales and all that. It’s just a little early for me to say that and I know you have to ask the question. I like a nice round number as high as we can get it. It’s just too early to tell. But we want to build it in a classy way and to a footprint that fits. There is no way to my knowledge that we can get to 50- or 60,000. I don’t know that we have the infrastructure to handle that. We have talked on down the road that if we were to add any bleacher seating there is some opportunity to do that down in the southeast corner, if I’m getting my directions right. But right now, we don’t have any plans to add bleacher seating.”

On Nippert’s potential to be lowered and concerns about the first five rows of seating …
“We can’t go down. There’s a lot of stuff in that stadium that’s been there for a long time from utilities and everything else. We’ve actual had some people get up under there and it’s pretty scary. You don’t want to go down there. But we looked at everything. We looked at that. We looked at opening up portals back into the lower level and developing club space. We looked at all sides of the stadium. We looked at turning the field. The work that these guys did before I got here – it was nice to see every option and then just try to lock in on the one that we felt like was best for us as a department and financial as well.”

On if this reconstruction is a step in the right direction to improve attendance:
“I think we are making progress. I believe our stadium this year capacity; I believe we got to about 83 percent of our bleacher seating. And you know what, I’m glad you asked that question because vision is talking about where we want to be on down the road. We don’t have to have them all sold out just yet, but my vision is all of them to be sold out. And again with this added inventory, we feel like we can really make a big hit there. If we put a good product on field and keep doing what we’re doing, we can there to where every game is sold out. So even though we’ve been playing football for 125 years, I believe, and somebody will correct me on this one, we’ve only been to 14 or 15 bowl games. Even though we’ve been playing football for a long time, football on this campus is relatively new success in the last decade. But again, we’re going to set our sights on where we are going and our future. I believe we came very close to selling out three of our six and had some great crowds on others. So we are going in the right direction.”

On if conference realignment presents challenges with fundraising …
“I don’t know the answer to that. I know what I can control and what we can control. And again we’re just going to work on that… really, I do think your pricing model might change a little bit depending on your schedule, I will say that. But again, guys, there are premium seating options at nearly every BCS schools. Not to mention non-BCS schools. Shoot, where I grew up, James Madison University, a I-AA or FCS program, just put up a $40 million addition with suites and club seats. So the model works and all we’re going to do is try to elevate our program across the board every day and that’s all we can control right now.”

On paying for construction with the cost of premium seating …
“That is on our basic models, Cliff. And yes I did say that. I’m not telling you what the pricing is yet. But we’ve based that on feasibility studies and market studies. And yes, projected out on a period of years, that’s right. If we were to tell 75 percent of it, our goal would be 100, over the projection of a period of years, yes, we could pay for the cost the facility and break even. But I cannot run the risk of running that razor thin and if we’re going to elevate all things across the board, I’d at least like to clear a few million dollars a year from it.”

On if he’d like to raise funds for the renovations …
“I’d rather not get into that yet. As our commitments come in, I think we’ll continue to run modeling. And again, we want to be aggressive but there is a fine line between cutting edge and bleeding edge. We’re going to be aggressive but we’re going to be financial responsible too. We don’t want to be boxed in on a magic number that we have to hit. But every dollar we raise will get us closer to being able to start.”

On the number of possible suites …
“I’ll just say this: why don’t we go with approximately 30. That’s in our initial modeling. But there’s a lot more you can do club seat wise, loge box wise. And again, once we get into the sale part of it, one good thing about doing it before construction is you can adjust, right? If you have more market driven for club seats, you can make that bigger. So I’m not trying to dodge your question, but it could flow. It’s what the space that we have and how can we take advantage of it? I’m sorry; it’s just a little bit early on that.”

On what he’s doing for fans outside not in premium seating …
“I don’t think the prices will be so exuberant that only the wealthy will be able to do it. If we can provide revenue from that aspect when we’re done, but also make it a more comfortable environment in the concourse and the traffic flow, and the concession etc. for as you put it the “common fan”. The “common fan” is what got us where we are today. We’re not going to forget them. But that student section this year and how far along that’s come from the days you were in school and a lot of other people in the room, that excites me and shows me potential. And those are our fans of the future, and if we can get that routine of those guys and ladies coming to games, graduating, coming back, then we’re building a program.”