Kansas Athletics Inc. didn’t come up with the idea for a new Gridiron Club on its own, or at least not the vehicle for financing it.
The concept evolved after KU officials learned about efforts at the University of California at Berkeley, which aims to generate about $270 million in revenue from sales of about 3,000 seats at the school’s Memorial Stadium. Seats through Cal’s “Endowment Seating Program” are available for up to 50 years at a time.
Cal needs the money to upgrade its stadium, built in 1923 and in need of upgrades to comply with the Americans with Disabilities Act and seismic standards. Also planned: lowering the field, adding training facilities for athletes and providing lounges for fans who invest in the project.
KU officials took note of the effort and its overall acceptance — Cal says it has sold at least 70 percent of the premium seats so far — in preparing their own plan in Lawrence.
“The project at Cal was really the impetus for it,” said Jim Marchiony, an associate athletics director. “But every school’s got to do it differently and run it the best way for them.
“(For us) it was a way to raise funds that could not only help football but also every other sport here at KU. That’s why it was so intriguing.”
At KU, Gridiron Club members would finance the addition of 3,000 seats and a lounge at the east side of Memorial Stadium, plus finance construction of an “Olympic Village” for nonrevenue sports south of Allen Fieldhouse. It would also provide $40 million for academic needs at KU.
Both KU and Cal are the two schools to launch programs that call for a relatively small number of fans to buy into long-term agreements that give them exclusive access to lounges, seats and locked-in prices for up to decades at a time. Such memberships include the prices of season tickets, and can be handed down to relatives or sold on the open market.
The price of memberships may be significantly higher than traditional season tickets, parking passes and concessions, but the bulk of a membership price — about 70 percent in Cal’s case — can be considered tax deductible, said Craig Richardson, executive vice president for Stadium Capital Financing Group LLC, the firm that put together the financing plan for both schools.
A membership can be considered as the best kind of investment, he said, in that KU — its football program, overall athletics and entire academic mission — is something supporters can believe in while expecting a worthwhile return on their money.
Regardless of whether the team qualifies for a bowl game or starts the next season with a new coach.
“You need to look at it like stocks,” Richardson said. “You need to understand the market, and understand that the best way to make money is to invest for the long term.
“Warren Buffett and guys like that don’t get rattled by short-term stuff like this. … It’s not great that this is happening, but, at the same time, the university — and Lew (Perkins, athletics director) and Sean Lester (associate athletics director) — they are smart guys. They know how to handle situations like this. They’ll be able to succeed, no matter what the short-term situations are. The university will do whatever it has to, to succeed for the future.
“I think they’re very confident that, in the next five, 10, 15 years, KU will be at a different level and will be competing with everybody in the Big 12.”