Reference no: EM131353623

Southwestern University:

Southwestern University (SWU), a large state college in Stephenville, Texas, enrolls close to 20,000 students. The school is a dominant force in the small city, with more students during fall and spring than permanent residents. Always a football powerhouse, SWU is usually in the top 20 in college football rankings. Since the legendary Phil Flamm was hired as its head coach in 2009 (in hopes of reaching the elusive number 1 ranking), attendance at the five Saturday home games each year increased. Prior to Flamm's arrival, attendance generally averaged 25,000 to 29,000 per game. Season ticket sales bumped up by 10,000 just with the announcement of the new coach's arrival. Stephenville and SWU were ready to move to the big time!

Southwestern University Football Game Attendance, 2010-2015
	2010		2011		2012
GAME	ATTENDEES	OPPONENT	ATTENDEES	OPPONENT	ATTENDEES	OPPONENT
1	34,200	Rice	36,100	Miami	35,900	USC
2	39,800	Texas	40,200	Nebraska	46,500	Texas Tech
3	38,200	Duke	39,100	Ohia State	43,100	Alaska
4	26,900	Arkansas	25,300	Nevada	27,900	Arizona
5	35,100	TCU	36,200	Boise State	39,200	Baylor
	2013		2014		2015
	ATTENDEES	OPPONENT	ATTENDEES	OPPONENT	ATTENDEES	OPPONENT
1	41,900	Arkansas	42,500	Indiana	46,900	LSU
2	46,100	Missouri	48,200	North Texas	50,100	Texas
3	43,900	Florida	44,200	Texas A&M	45,900	South Florida
4	30,100	Central Florida	33,900	Southern	36,300	Montana
5	40,500	LSU	47,800	Oklahoma	49,900	Arizona State

The immediate issue facing SWU, however, was not NCAA ranking. It was capacity. The existing SWU stadium, built in 1953, has seating for 54,000 fans. The following table indicates attendance at each game for the past 6 years. One of Flamm's demands upon joining SWU had been a stadium expansion, or possibly even a new stadium. With attendance increasing, SWU administrators began to face the issue head-on. Flamm had wanted dormitories solely for his athletes in the stadium as an additional feature of any expansion. SWU's president, Dr. Joel Wisner, decided it was time for his vice president of development to forecast when the existing stadium would "max out." The expansion was, in his mind, a given. But Wisner needed to know how long he could wait. He also sought a revenue projection, assuming an average ticket price of $50 in 2016 and a 5% increase each year in future prices.

Discussion Questions

1. Develop a forecasting model, justifying its selection over other techniques, and project attendance through 2017.

2. What revenues are to be expected in 2016 and 2017?

3. Discuss the school's options.