Basketball Legacy Fund

Case Study

 

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The Duke University men’s and women’s basketball teams play their home games in Cameron Indoor Stadium, the crown jewel of college basketball.  The stadium was originally built in 1935 and was remodeled in the late 1980s.

Sports Illustrated ranked the stadium 4th on the list of the country’s greatest sporting venues of the twentieth century, ahead of Pebble Beach, Wrigley Field, and Fenway Park.  The stadium offers little room for concessions and no room for corporate sponsorships.  Stadium capacity is 9,312 with 3,500 of those seat being bleacher seats reserved for students.  To say that the stadium is antiquated is an understatement.  The Board of Regents thinks a new facility needs to be on par with the other schools in the area; however, they are aware of the public sentiment for Cameron Indoor Stadium.  Keep in mind that the University of North Caroline, Wake Forest, and North Carolina State all play in new, modern facilities.

 

Things to Consider

Take into account that the University of North Carolina sits 8 miles away from the Duke campus, and North Carolina State is about 22 miles away.  Wake Forest is located about 80 miles away.  The Raleigh-Durham area is full of graduates and fans from these and other Atlantic Coast Conference schools who would love to buy tickets and watch their school play against Duke but have been unable to do so because of Cameron’s low seating capacity.  Thus, in addition to the opportunity to sell more tickets to its own fans, Duke has the opportunity to sell lots of tickets to visiting teams’ fans.

 

Questions That Need to be Addressed

In determining the fate of the Cameron Indoor Stadium, the following questions must be addressed:

  • Who pays?
  • Who should pay?
  • Who benefits?
  • How do you finance this project?

 

As an agency hired by the Duke athletic department, the athletic director of the university has asked you and your team to evaluate building a new basketball arena or a complete remodeling of the current facility.  The athletic director wants you to take into account the number of seats the arena will hold and the added revenue from corporate sponsorship as well as a possible naming rights deal.  In theory, a new arena would have many new areas for corporate advertising and hospitality.  However, this is debatable because donors might want the new arena to have more a “campus field house” feel (such as that found in the University of Maryland or Indiana Pacers facilities).

 

You will have a chance to present your proposal to the Board of Regents.  The Board is split on this proposal, and it is a very touchy subject.  Some feel that the success of the Duke teams in the last 20 years makes this the perfect time to build an arena, while others disagree. Choose whether you would like to renovate or rebuild the arena, and answer the following questions:

 

  1. Which part will the Iron Dukes (the athletic department’s fundraising/donor group) play in the financial process?

 

  1. What is the Basketball Legacy Fund?

 

  1. Does the Raleigh-Durham area have the corporate infrastructure to support suite/club seat sales?

 

  1. Would a surcharge on student fees work at Duke?

 

  1. How many suites and club seats would you include in a new arena?

 

  1. How would you position a capital campaign for a new stadium?

 

  1. How many seats would this arena hold?

 

  1. Who will own and manage the arena, the athletic department, or the school?

 

  1. If remodeling, where does Duke play in the meantime?

 

  1. Would the women’s team continue to play in Cameron? Consider this decision from a financial standpoint?

 

  1. Will a new facility be a recruiting advantage or disadvantage?

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