Reference no: EM13808285
Southwestern University (SWU), a large state college in Stephenville, Texas, enrolls close to 20,000 students. The school is dominant force in the small city, with more students during the fall and spring than permanent residents.
Always a football powerhouse, SWU is usually in the top 20 in college football rankings. Since the legendary Phis Flamm was hired as its head coach in 2006 (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!
The immediate issue facing SWU, however, was not NCA A 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.
[The table is in a file attached]
One of Flamm's demands upon a new stadium. With attendance increasing, SQU 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 the 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 revenue projection, assuming an average ticket price of $50 in 2013 and a 5% increase each year in future prices.
Questions
1. Develop a forecasting model and project attendance through 2014.
2. What revenues are to be expected in 2013 and 2014?
3. Discuss the school's options.
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