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Good morning, and thanks for spending part of your day with Extra Points.
You don’t need me to remind you that everything in college sports, from athlete compensation to gasoline, construction equipment to medicine balls, has become more expensive. That means everybody is looking for new revenue sources.
But you can only sell so many jersey patches or new sideline activations. You can only host so many country music concerts. It’s hard to sell more tickets when you’re already bumping close to capacity limits, and very few programs are looking to increase the seating capacity of their major venues.
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One of the most popular places where more and more schools are looking for new money doesn’t even directly have to do with the games at all. It’s about real estate.
Now that schools are legally paying players, they’re searching every couch cushion — or underused parcel of land — for new income streams. Plopping 50,000 square feet of shops next to an arena might not lead to a transformational payday, but if it generates a couple million dollars in passive revenue, that’s a few million dollars that can buy a quarterback or buy out a coach.
But the vision is also grander. Schools are taking parking lots and eyesores and developing them into districts where people live, work or play — ideally all three — beyond six or seven home games a year. The details depend on everything from the town’s demographics to the area’s topography, but the possibilities and, yes, revenues are intriguing enough that 20-some schools are constructing or at least considering them, from Tennessee and Oklahoma to New Mexico and Cleveland State.
The first building at Iowa State’s $200 million CyTown will open in the next year, while Kansas expects its Gateway District to be ready in 2028. South Florida hasn’t even finished its 35,000-seat on-campus stadium yet but already plans to connect it to restaurants, housing and a hotel/conference center on the site of an old golf course.
It’s a model inspired by entertainment districts around professional stadiums in cities like Atlanta and Milwaukee. At the college level, schools risk spoiling game-day traditions as they inch closer to their professional peers. But the reward is maximizing revenue in an era where every penny matters while adding a vibrant space that transcends sports for students, athletes and locals
The shining example of this strategy, mentioned here in the story, is The Battery, opened by the Atlanta Braves. I’ve also heard college sports executives point approvingly to the development districts around Wrigley Field in Chicago and Busch Stadium in St. Louis. All three stadiums are surrounded by dining options, retail, year-round-entertainment, and more.
Oklahoma, for example, just officially broke ground on their planned development district. Kentucky is looking to do something similar. And other schools contemplating significant capital projects, like Utah and North Carolina, are also batting around proposals.
Whether this can work or not, in my humble opinion, depends a lot on the specific location and campus. Wake Forest, for example, is a rare college campus that has a surplus of warehouses and parking nearby, and underdeveloped real estate assets near the major stadiums. I don’t think such a proposal would be possible at a place like Northwestern or American, because their campuses are smooshed in urban, very expensive residential neighborhoods. There’s not much room to build, and any project would be opposed by neighbors with the time to show up at meetings.
When the projects work, they provide something that’s very, very difficult for athletic departments to create…a revenue source that isn’t completely dependent on the on-field product being successful. Folks will pack the Wrigleyville bars whether the Cubs are good or if they suck, because tourists think Wrigleyville is fun. If residents enjoy eating, shopping, and living nearby, the school can collect rent no matter what.
But there are risks. Real estate development is complicated, and schools often need to partner with experts (private capital, real estate development firms, etc) in order to get the most use out of the project. Economic trends that have nothing to do with college sports could crush a well-designed project before it gets off the ground, leaving the school (and business partners) holding the bag. I also wonder if enough schools build something like this; each one won’t be as “magical” or as useful. Not every single stadium needs an event center, a music venue, and a few places to pay $28 for a burger and fries, right?
And we also can’t forget the risk that bulldozing tradition could turn fans away.
It’s the risk/reward with gentrifying neighborhoods all over the country, just through the prism of sports. Fancypants development districts mean no more 3 AM Taco Bells, no more dilapidated student housing, no more dive bars, and, often, higher prices on everything. Do you lose “charm” by getting rid of the $500/mo student hovels and replacing them with luxury condos? Or when Murder Kroger is replaced by a Whole Foods? Or do those changes make hanging out near the stadium more fun?
Like every other strategy in college sports, I don’t think this is an approach that will work everywhere, and how it works won’t be the same from place to place. But if roster costs are going to continue to soar north of $40 million, that new money has to come from somewhere.
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Also read about all the new changes we recently launched here, including sports specific spend vs performance, updated financial comparisons, an ai chatbot, game contracts and more.
Here’s what else we worked on this week:
It’s very common for athletic leaders, agents, and others to promote (or disparage) the idea of a college athlete collective bargaining agreement. The idea has some real merits, in my humble opinion, but some important truths are often lost in the conversation. Here, I try to clear up some of those misconceptions.
I pushed significant updates to Who’s That Football Team (hundreds of new clues, AI improvements, etc) and NIl Agent Tycoon 95 (improved AI, deeper gameplay from rival agencies, improved game balance in the mid-game, more graphics). These two games are both free to play!!
I talked to a therapist at TCU about how their program is trying to help athletes struggling with gambling addiction in new ways. Perhaps other schools can borrow part of their approach?
And my colleague KC interviewed WCC Commissioner Stu Jackson about how the league expanded to reach a new level of stability, and where the conference wants to go next.
And oh yeah, we’ve added over 300 new PDFs to the Extra Points Library since last Friday, including hundreds of new game contracts across multiple sports.
For next week, we’ll have a deeper look at the potential expansion of the College Football playoff, an analysis of the operating budget of over 200 college football programs, and much more.
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Thanks for reading. Have a great weekend, and I’ll see you all on the internet.
