$100,000 For the Right to Book a Hotel Room

Texas A&M is holding a lottery for football season ticket holders later today. Those selected will win the right to purchase (cost: one-time $100K tax-deductible donation) a guaranteed room option (GRO), at a yet-to-be built hotel, across the street from Kyle Field. The GRO entitles the rights holder to book a specific room on any day for the next 10 years (they also get an engraved name plaque on the door); a luxury in a college town that lacks hotel rooms. The hotel, which will be ready for the start of the 2018 season, will have 250 total rooms (including 2 penthouses and 11 luxury suites) and a conference center; to which the school is looking to sell the naming rights to for north of $20 million.

Howie Long-Short: Texas A&M (and several others in the SEC) are abiding to the motto “if they come, we will build it”. They’re holding a lottery because more than 750 people expressed interest in the program. From a fiscal perspective, this doesn’t make sense for GRO rights holders. $100K does not include the nightly cost of the hotel room. Even if you were paying $500/night for a room regularly priced at $125/night, you would have to attend 267 games to break even. SEC teams are only going to play 70 home games (max) in a decade.

Fan Marino: The $28.5 million the A&M athletic department will bring in from GRO sales will come in particularly handy should the school decide to fire Head Coach Kevin Sumlin (which seems inevitable). Sumlin has a $10.4 million buyout on his contract; though that number shrinks by more than $400K/month. I wouldn’t fire Sumlin.  Jimbo already said he’s not coming. Leach & Kelly aren’t taking SEC jobs (too much media attention) and James Franklin has no reason to leave Penn State. Chad Morris and Matt Campbell are good coaches, but I don’t see them as improvements over Sumlin.

Coming Soon to Campus: The $100,000 Hotel Room

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Author: John Wall Street

At the intersection of sports & finance.

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