THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Sunday, March 3, 1996 TAG: 9603030095
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY LON WAGNER, STAFF WRITER
LENGTH: Long : 180 lines
If you had never contributed to the University of North Carolina before and wanted tickets to this weekend's Atlantic Coast Conference tournament, you would have to write The Educational Foundation Inc. a check for $66,000.
That would earn you the right to buy two of UNC's worst seats. If you wanted to be in UNC's better seats, make that check for $140,000.
That, by the way, doesn't include the tickets themselves - just the privilege to buy them. Those cost another $180 apiece, which breaks down to $22.50 for each of the eight games to be played.
Of course, there are cheaper ways to qualify for ACC tickets; the buy-in is lower at the other eight schools. But it's not cheap anywhere.
Or you could attempt to scalp tickets from the handful of students who got ticket books at cost. But that, too, will be a seller's market. The schools reserve nearly all their tickets for big donors. Only 40 University of Virginia students bought tickets.
The men's ACC basketball tournament has become the fund-raising carrot for the nine schools in the conference. When you look at the crowd on TV at the tournament, picture the fans as contributors to a massive fund-raising banquet.
By selling the rights to buy tickets, schools rake in millions of dollars each year to pay for hundreds of athletic scholarships - for men's and women's basketball, but also for men's and women's lacrosse, field hockey, baseball, or any of 18 or so other Division I sports.
Over the course of their lifetimes, the 23,000 fans who will sit in Greensboro Coliseum this weekend will have contributed more than $266 million to their universities' scholarship funds, estimates Charlie Patterson, associate athletic director for major gifts at Wake Forest University.
North Carolina, North Carolina State, Florida State and Wake Forest responded to Patterson's informal survey about their donors' cumulative contributions. Just those four schools reported to Patterson that they had received contributions totaling $133,191,000. Patterson figures it's safe to double that amount in estimating the total lifetime donations.
``I flat out tell people that the tournament is nothing but a money game, that's how it's set up,'' says Moyer Smith, president of UNC's Educational Foundation, commonly known as The Rams Club.
More so than any other conference, the ACC's basketball tournament lures money the way its schools attract high school All-Americans.
The money goes to pay for scholarships for those All-Americans. Carolina has 300 athletic scholarships completely endowed; University of Virginia donors paid for 243 scholarships last year. At several schools - Wake Forest, Virginia and Carolina, among them - the top donors have each given a total of more than $1 million to the scholarship fund.
Two uncontrollable factors give a couple of the conference's universities a competitive advantage when it comes to raising money from the tournament. Carolina's history as a year-in-year-out contender for a national title can't be discounted, but its massive alumni base and its donors' proximity to the tournament may be equally important for fund raising.
Duke, whose on-court success is paralleled only by Carolina among conference schools, lacks the sheer alumni numbers of the larger, state schools. Duke's base is not only smaller, but its student body is one of the most geographically diverse in the country. The 189 scholarships the university funds is among the lowest in the ACC.
The large alumni base of schools such as Carolina and N.C. State increases the likelihood that enough graduates succeed in the working world to be able to afford the buy-in price. Secondly, proximity to the North Carolina tournament makes it an easy drive, something that can't be said of fans from Florida State who have to make the trek from Tallahassee.
That sets up a scenario in which some die-hard Carolina fans pay $1,000 to join the Florida State booster club to qualify for tickets at a lower price than they would at Carolina, fund-raisers say.
The $66,000 buy-in at Carolina doesn't guarantee the donor tickets forever; in future years the lifetime contributions of other donors could surpass that amount and bump the $66,000 contributor off the list.
``If you just wanted ACC tournament tickets, you'd be giving to one of the other schools rather than giving to us,'' Smith says. ``We have people that told me years ago, `I love you, but I get my ACC tickets somewhere else because I can't afford them from you all.' ''
Florida State, as the newest member of the ACC and one with a more football-oriented alumni base, sells the rights to two tournament seats for $1,000, four seats for $5,000 and six seats for $10,000.
Florida State's relatively low buy-in makes it likely ``that we have a Cavalier or two or a Tar Heel or two'' who give money to the Seminoles to qualify for tickets, says Charlie Barnes, executive director of the Seminole Boosters Inc.
But despite being in the conference for only four years, Florida State is already selling out of tournament tickets.
``I think a lot of entrepreneurs have figured out that if they have business associates in Virginia, North Carolina or Maryland, tournament tickets are a good thing to have,'' Barnes said.
Generally, the schools will take money from a donor, regardless of his university colors. But that can be embarrassing.
``You do care when your boys are playing hard and doing well and you got the wrong color shirts sitting in your seats,'' Barnes says.
Even so, Seminole Boosters Inc. isn't hurting. The Florida State club, which plays the school's Indian war chant to callers on hold, raised $7.6 million last year in unrestricted contributions. The bait for much of that money, though, is football season ticket rights and stadium parking priorities.
In fact, most of the ACC schools have little difficulty raising money for sports scholarships.
U.Va. raised a record $4.5 million last year, said Allison Cryor, interim executive director of the Virginia Student Aid Foundation, which requires a $4,300 annual contribution for tournament tickets.
``We're one of the few schools in the ACC that the only money that goes for scholarships, we raise,'' Cryor said. ``They actually pass us the bill, and we pay it. The Athletic Department receives no state funds.''
Two thousand dollars to the Terrapin Club at the University of Maryland would get two tournament tickets; $5,000 would get four; $10,000 would qualify for six tickets, but if the person had never contributed before they might be in the upper deck.
Lifetime contributions reaching $50,000 would, at this point, assure a Maryland donor of lower-level tournament tickets, says Gib Romaine, acting director of the Terrapin Club.
At N.C. State, a $50,000 contributor - the price of endowing a scholarship - becomes a ``life member'' and gets four tournament tickets. That price will jump to $100,000 when the Student Aid Foundation finishes raising $45.3 million for a new basketball arena; it's already helped raise $32 million.
N.C. State allows donors to pay off the $50,000 life membership over a five-year period, never donate again and still be guaranteed season and ACC tickets for life. But not necessarily the best seats.
Many ACC schools have point systems that rank their donors based on the number of consecutive years a person has contributed as well as the total amount they've given.
``The life membership doesn't require you to give anymore, but probably 90 percent of our members continue to give because a guy could come along and give $10,000 a year and get enough points to have priority over them,'' says Joe Hull, associate director of N.C. State's Student Aid Foundation.
Or, an N.C. State fan could just kick in $5,000 each year and qualify for two tickets. N.C. State's foundation raised $4.5 million last year for scholarships.
For the most part, these contributions are tax deductible. The Internal Revenue Service classifies foundations that raise money for sports scholarships as charities, along with churches, hospitals, many non-profit arts organizations and scientific groups that test products for public safety.
The foundation determines the ``fair market value'' of the right to buy an ACC tournament ticket book. The tax deductible part is the contribution minus the fair market value of the buy-in. At N.C. State, if somebody contributes and in return gets the right to buy seats, the donation is 80 percent deductible.
The University of Virginia's foundation has determined that the fair market value of the right to buy a single book of tournament tickets is $50 - or $200 for four such books of tickets. But to qualify for four tournament books at U.Va., a person needs to join the ``V'' Club for $4,300 to $8,599 a year.
What is it about a college basketball tournament that prompts people to pay as much for mediocre seats as a modestly priced house? It's a combination of conference history, the quality of basketball and a rivalry among the fans of the schools.
The ACC tournament lives on the tradition it has been building since 1954, the year it was first played.
Prior to 1974, only one team from each conference made the NCAA tournament. The ACC was one of the few leagues using a tournament to determine its champion. Then the NCAA began expanding its field - lessening the impact, but not the appeal, of the ACC tournament.
By establishing tradition early and maintaining it, ACC schools can now charge a premium for tickets compared to other conference tournaments, says Richard Sheehan, professor of finance at Notre Dame, who has written a book, ``Keeping Score: The Economics of Bigtime Sports.''
``It's not unique to the ACC, but the ACC probably does it better than anyone else out there,'' says Sheehan. ``The ACC tourney predates when everybody and his brother got into the Big Dance.
``You want it to be the event, making sure it sells out. These days, the Big East is every bit as reputable as the ACC in basketball, but for a conference that doesn't have the history, it's hard to create it.''
Wake Forest's goal this year is to raise $2.5 million, just half the cost of its scholarships but still respectable.
``If we were in the Big 10, I don't think we'd do as well,'' says Patterson, Wake's fund-raiser. ``I genuinely feel that donors give to Wake Forest to provide educational support for our young student athletes.
``But, obviously, the tournament is a huge carrot for us.''
Patterson counts his blessings - and Wake's donations - that he's raising money for an ACC school. ILLUSTRATION: JOHN CORBITT/The Virginian-Pilot color photo illustration
Jerry Stackhouse, above, was a star for North Carolina in last
year's ACC tournament. North Carolina draws the highest donations
for tournament seats: $140,000.
by CNB