Football@Calvin: Executive Financial Summary
Estimated Startup Costs:
The startup costs include athletic training equipment, technology equipment, individual player equipment, safety equipment, turf and maintenance equipment, and initial staffing costs. The costs are summarized in the table below.
|
Initial staffing costs |
$245,000 |
|
Individual player equipment |
177,850 |
|
Football specific equipment |
55,595 |
|
Turf maintenance equipment |
50,000 |
|
Athletic training room equipment |
30,000 |
|
Technology |
29,000 |
|
Safety equipment |
19,000 |
|
Total |
$606,445 |
Estimated Facility Costs:
The financial analysis assumed that there would be three new stadiums built on campus.
The total of all three facilities was estimated to be $9.1 million dollars.
Estimated Incremental Annual Revenues and Expenses
The committee compiled a projected incremental average per student annual budget based on current revenue and expenses. The analysis assumes that the college will eventually have 96 student athletes participating in football (96 is the MIAA average). The numbers provided are on an average per student athlete basis.
|
Incremental revenue |
$22,108 |
|
Staffing expenses |
5,313 |
|
Facility maintenance expenses |
844 |
|
Dining expenses |
482 |
|
Insurance expenses |
411 |
|
Individual player & safety expenses |
371 |
|
Miscellaneous expenses |
329 |
|
Competition related expenses |
288 |
|
Training room expenses |
188 |
|
TOTAL INCREMENTAL PROFIT PER STUDENT |
$13,882 |
Return on Investment (ROI) Analysis:
An Return on Investment (ROI) analysis was developed based on a 16 year projection of incremental revenues, incremental expenses, estimated startup costs and estimated facility cots. The analysis assumes that in year one there will be 40 incremental students, year two there will be 60 incremental students, year three there will be 80 incremental students and years four and beyond the incremental students will plateau at 96. The original model derived a ROI of 15.1%. However, to appropriately account for risk, sensitivity factors were built into the model and are summarized below.
|
If revenues are overstated by 10% |
ROI falls to 12.1% |
|
If revenues are overstated by 20% |
ROI falls to 8.9% |
|
|
|
|
If expenses are understated by 10% |
ROI falls to 14.0% |
|
If expenses are understated by 20% |
ROI falls to 12.9% |
