Louisville basketball generates a bigger profit than all but 20 Division I football programs, generating a profit of over $16 million on basketball alone with athletics department profits of $94 million on revenue of $139 million. Louisville has been one of the nation's best-run athletics departments in recent years, but other Big East basketball powers have also turned big profits.
Syracuse generated a profit of over $10 million from basketball. Pittsburgh earns over $7 million, West Virginia earns about the same.
Villanova's basketball profits were a measly $1.5 million on just $7,652,470 of revenue (exclusive, presumably, of the required 'donation' for purchasing season tickets). Those figures were calculated during the height of Villanova's basketball success too, not during the most recent season's struggles. Why couldn't the Wildcats even sniff the rarified profits of Pittsburgh and West Virginia during that time?
The answer might be found in a Jim Calhoun farewell piece from Forbes.
Arguing that the Huskies wasted an opportunity to utilize Jim Calhoun's career as a profit-generating asset, the writer, Mike Ozanian, analyzes the disparity between Connecticut's successes in basketball and their ability to generate some of the same massive profits as peer schools.
For the five-year period ending in 2010, the US Department of Education figures show that the Huskies earned an aggregate profit of just $4.6 million on revenues of $39.1 million. In 2010, the UConn basketball program earned a profit of just $804,242.
According to Oznanian the problem for UConn is their arena situation:
UConn's main problem: using two arenas to play its home games. Gampel Pavillion, which seats just 10,1671 and the 16,294-seat XL Center in downtown Hartford. Not only are both arenas small, but not having a definitive home made it difficult for the school to sell sponsors big packages and maximize ticket pricing.
Louisville's KFC Yum! Center seats 22,090 spectators for basketball. The Carrier Dome in Syracuse officially seats 33,000 for hoops, but the Orange have packed almost 35,000 into the stands on at least one occasion. These arenas can not only accommodate a large number of spectators, but they can also offer more demanding (and wealthy) fans the creature comforts of luxury boxes.
Louisville and Syracuse also sell beer and wine at their basketball games. That fact alone is one that Rick Pitino has attributed to his program's profitability.
Villanova's Pavilion cannot do any of that. Even an expansion of seating at the Pavilion would not get the Wildcats into the range of UConn's Gampel, or XL Center -- neither of which have met the "gold standard" set by Louisville basketball.
The Wells Fargo Center, however, seats 20,318, and if "standing room" is utilized at an event, the legal capacity can expand to at least 21,315 spectators. The arena, built by the city for NBA and NHL use, offers all of the luxuries that could be expected in a top-end facility. It is slightly smaller than the Yum! Center, but closely approximates the amenities.
It doesn't affect Louisville's program that their arena isn't on campus -- they play about a 12 minute drive from their main quad. It probably only helps to bring local business people through the gates that they constructed the arena in downtown Louisville.
For Villanova, the revenue generated by playing at the Wells Fargo Center far outpaces what the school pulls in by playing basketball games at a smaller on-campus arena. More seats, luxury boxes, beer and concession sales, and other revenue generators help the 'Cats to put money in the bank when they play downtown.
So why don't they play every game there?
As Forbes noted, UConn struggled to sell sponsors big packages, to maximize ticket pricing and otherwise financially under-performed largely because they were unable to lock down one suitable home for basketball. Villanova has a similar split-home arrangement and similarly small basketball profits (compared to the upper echelons of the Big East conference).
With basketball success being more and more connected to spending and profitability over the long-term, it is important for the University to maximize it's revenue generating opportunities when it can.
The on-campus option will never meet the standards that other schools are setting. Even Pittsburgh, which has a smaller on-campus arena in the Petersen Events Center (12,500 seats) still has a healthy luxury suite offering (including the NCAA's only court-side suites) and high-level catering and concessions to help maximize their profitability. Pitt also sells beer at 'the Pete', in a limited format, and may expand that policy in the future.
Villanova will likely never get approval to build an on-campus facility as large at the Petersen Events Center, or to offer beer sales or the type of concessions that generate the mega-profits that other big basketball programs have been able to. Off-campus at the Wells Fargo Center, however, the Wildcats can offer everything that these other schools offer.
So why bother with the Pavilion at all? Perhaps when the Wildcats play exhibition games or low-level opponents that won't attract many spectators it could still be an asset, but otherwise there doesn't seem to be much of a future for the arena.
Fewer major on-campus events may also help the town/gown relationships with neighbors who feel inconvenienced with traffic on game days.
Playing NCAA tournament games in Philadelphia is an advantage, but how big is it? Villanova's greatest tournament success in 1985 didn't involve any home games. Having the money to invest in a championship-caliber athletics program, however, is a huge advantage.