photo by: Chad Lawhorn/Journal-World

Construction crews work on the steel frame for a large video board at David Booth Kansas Memorial Stadium on Nov. 7, 2024. The new video board will be significantly larger than the previous video board.

Kansas Athletics plans to take on $115 million in new debt to cover construction work that currently is underway on the university’s football stadium, a KU official has confirmed.

That’s a big number, but perhaps not the most surprising number coming out of the football stadium project these days. A KU leader also said donations or pledges to the football stadium project have now risen to $248 million, which is up substantially from the last update that KU had provided.

“That has actually gone remarkably well,” KU Chancellor Douglas Girod told me in a brief interview.

KU also has about $85 million in grant money through the state to round out the funding for the approximately $450 million project.

But perhaps the most significant number of all is related to what KU leaders are counting on happening next at the stadium. KU Chief Financial Officer Jeff DeWitt said that once construction is complete and the stadium reopens in August, the university is projecting the amount of revenue the stadium will produce will grow by about seven times from current figures. That includes hosting 200-plus events per year either in the stadium itself or in a new conference/convention center that is being constructed in the north end of the stadium.

DeWitt said modern suites, vast improvements in concession, merchandise and other amenities will drive lots of new revenue to Kansas Athletics.

“People haven’t really experienced a modern stadium in Lawrence,” DeWitt said. “This will be as nice as any one they will go to. It will generate more food and beverage revenue. Concerts and events will be there. It is not just a stadium. It has the conference center. There will be 200-plus events per year. There will be trade shows and all those kind of activities.”

There will need to be because what is certain is that $115 million in new debt represents a large increase in Kansas Athletics’ debt load. Kansas Athletics’ fiscal year 2023 audit showed the nonprofit corporation, which is wholly owned by the university, had about $31 million in long-term debt. Thus, the football stadium project will more than triple the department’s debt load.

In terms of how much Kansas Athletics will have to add to its budget to make annual debt payments, that amount isn’t yet known. DeWitt said KU plans to sell the bonds in March. Whatever interest rates are at that time will determine what the annual debt payments will be. So too will the length of the debt, with 20 to 30 years being common for this type of project. DeWitt said that an educated guess at this point would put the annual debt payments at a little less than $10 million per year.

The plan for paying for that additional expense is completely tied to the stadium producing significant amounts of new revenue.

“The incremental revenue of the stadium will pay that debt service one-and-a-half times,” DeWitt told me in a brief interview. “That is why you are able to do it.”

photo by: University of Kansas/HNTB

This rendering shows the most recent design for a renovated David Booth Kansas Memorial Stadium. The rendering also shows some possibilities for ancillary development on the east side of the stadium, although KU is still awaiting proposals from developers on that portion of the project.

DeWitt didn’t have specific numbers to share with me this week, but a quick look at finances at some other athletic departments in the region lend evidence to the potential of increasing revenues at KU. Required NCAA financial reports show that KU is about $1 million behind in concessions and other game day revenue of several schools in the region. KU’s NCAA report showed concession and gameday revenue — for all sports, not just football — of about $1.7 million in fiscal year 2023. At Kansas State and Iowa State, that figure was closer to $2.8 million, was $2.2 million at Colorado, $2.3 million at Texas Tech and more than $3 million at the University of Arkansas.

But the big difference comes in the category of ticket revenue. KU had just $6.7 million in football ticket revenue in the 2023 fiscal year. That was by far the lowest total of the five regional schools I did a quick check on. (Admittedly, my selection of the five schools was not overly scientific, but rather was guided by region and whether they easily made their 2023 NCAA financial reports available online.)

The next lowest school was Texas Tech at $11.6 million in football ticket sales. Colorado checked in at $13 million, Kansas State at $14.7 million, Iowa State at $16.1 million and Arkansas at $38.9 million.

While those numbers certainly suggest KU should expect an increase in ticket revenue (and fans might expect an increase in prices charged,) they also highlight that a $10 million to $15 million increase in revenue is not guaranteed.

Another factor to keep in mind is that while Kansas will have the newest stadium on that list, it also will have the smallest in terms of capacity. KU hasn’t announced a new capacity number for the revamped stadium, but has acknowledged it will be smaller than its previous capacity of about 50,000 people. It seems likely to be in the mid 40,000 range. That would put it about 5,000 seats fewer than K-State’s stadium, which is the next smallest on the list.

DeWitt expressed strong optimism about the revamped stadium generating big increases in revenue, in part, because the difference between the old and new stadium will be so dramatic, he said.

“The old one was the lowest revenue producing one that you could possibly build,” DeWitt said of the previous configuration of David Booth Kansas Memorial Stadium. “You can’t get any lower than that 100-year old stadium was.”

As a reminder, the renovations underway on the stadium are not doing any work on the east side of the stadium. None of the money raised nor debt issued will be put toward a future eastside project.

But, as we’ve reported, KU leaders are looking at starting an eastside project shortly after the current renovations are completed in August. That project would include a new east grandstand, but also could include a hotel connected to the stadium and the conference/convention center. It also could include retail, student housing and other amenities that would be built in conjunction with a private partner.

DeWitt said he expects the university to have an update on the status of any east project within two months. KU is in discussions with a consortium of private developers and architects, which it has not yet publicly identified.

“We are finishing up due diligence on that,” DeWitt said. “We are talking seriously. Assuming we can get everything lined up on going forward, you will see all that soon. We are not quite there yet, but close.”