Q&A With ... Illinois AD Josh Whitman

Adding Hockey is Closer, But Still 'Long Way to Go'

by Adam Wodon/Managing Editor (@CHN_AdamWodon)

Many people in college hockey, not to mention fans, are always wondering when some theoretically obvious large schools will add varsity hockey. Particularly with the Big Ten, there is plenty of room for growth. But despite relatively large interest in seeing it happen, hockey is a notoriously difficult sport to add, thanks largely to the expense of building an arena. Penn State was able to do it, and endow its scholarships in men's and women's hockey, thanks to a $100 million-plus donation from Terry Pegula, now owner of the Buffalo Sabres and Bills.

Illinois has made no secret about looking into adding hockey, including taking part in a feasibility study with the NHL. But looking into it doesn't mean it's going to happen. There is still a ways to go.

Fundraising towards a new arena needs to reach $50 to $60 million, according to Illinois athletic director Josh Whitman, and the school has already started to find donors. If they continue to go well, he said he hopes to green-light a new program by the end of this calendar year. However, there is a still a long way to go, Whitman said.

CHN: How far away are you talking still with fundraising?

Whitman: We're many, many, many millions away. We have a long way to go on the fundraising side. We're still optimistic we can get there. We've started to get some traction and had a number of nice gifts come through the door, but obviously to get a project like this one off the ground, it's going to require a pretty significant influx of capital. Even though we've had some success early, we have a lot more road to travel before we get where we need to be.

CHN: You've said you were "increasingly confident," but does that necessarily mean you are confident, or does it just mean your confidence is going up a little bit.

Whitman: I'm not putting odds on it. The things that need to happen are starting to happen; things are falling into place in terms of necessary partnerships and parties that have to be around the table to participate willingly and with an open mind. It's a very complex project, particularly the way we've chosen to approach it, with a downtown facility and multiple users. It's going to have a lot of tentacles to it, and we have to do our due diligence on the front end to tie up as many of those loose ends as we can, and get to a place where we feel confident we can operate this in a financial responsible way.

CHN: The money is the most difficult part of this, but do you have the land secured for the arena?

Whitman: We do. We're working with a private developer, who would be the owner of the land and the building. And the developer has options or legal rights to the parcel that we need, so that's good, that part is pretty well taken care of. So there's other logistical things to take care of.

CHN: Is this all going to come from fundraising, or is there any chance the university funds part of it — or more precisely, from other sources in the athletic department's budget?

Whitman: Well, you never say never. You never know how this could all piece together. We're not funded in any part by our university, so whatever resources the athletic department puts towards this is funds we're generating on our own, whether that's from fundraised dollars, or gate receipts, or Big Ten Conference contributions; at the end of the day, whatever money that's put into this, it's going to be money the athletic department generates in one way or another. And there are a lot of different resource levers we can pull, we can look at creating money through sponsorships, certainly through ticket sales, there would be retail opportunity — there's a lot of different ways we can use this project and building to generate money. The question is going to be, can we create a formula that has enough revenue sources with enough degree of certainty that we feel confident moving forward?

CHN: Is there a deadline on this, or whenever it happens it happens?

Whitman: There's not. Certainly, we've already been at this now for a good year and a half, if not more. So we're not going to spin our wheels on it indefinitely, at some point we have to make a decision, but this point we have as good a feeling as we ever have about who the necessary parties are for us to talk to. And now it becomes a function of time and getting on people's calendars and getting commitments, or not getting commitments, and so now it's just getting through that list, and that will take some time. But I don't anticipate we'll be sitting here a year from now without an answer to that question.

CHN: Obviously there's a lot of interest from a student/fan perspective, so theoretically it would be a money-making endeavor. Can you project that into your budget so that you don't necessarily have to fundraise the entire $50-to-$60 million, knowing you'll get revenue down the road?

Whitman: Absolutely, this is all about forecasting and projecting, and we do anticipate generating revenue through hockey. And so it's not so much the annual cost of hockey, though that is significant, (but) we feel we can cover that — it's really about the building.

CHN: But even just in terms of the building itself, could some of that revenue be applied towards the cost of the building?

Whitman: We can, but what I'm saying is — just to make the math simple — let's say operating the hockey program costs $2 million per year, and we're going to generate $2 million per year in revenue off ticket sales. So that's just the operating costs, travel, personnel, and so on — but you still have the cost of the building, and operating the building, separate and apart from the team. So you have to be careful not to double count.

CHN: Penn State was obviously very lucky with their donation from Terry Pegula, and with that, they were able to endow scholarships as well. Is that something you have to do to get started?

Whitman: You don't have to, but we certainly would like to, no question. The greater an endowment we can create, the less we have to generate on an annual basis to operate the program. But it's not a requirement. Rough estimate, we make about 4 percent (annually) off an endowment. So if we were able to create about a $10 million endowment, that would create $400,000, which is helpful, but it's not going to get us all the way there. That's some of the catch of endowments — the rates of return are relatively small.

CHN: Is women's hockey part of this or no?

Whitman: It could be. We're evaluating a lot of different options in terms of the Title IX component, and that's one of the options on the table. There's pro and cons. The pro is that we wouldn't have to do anything new from a facilities standpoint because we already have a new building. The con is that in the spectrum of women's sports, hockey is one of the more costly options.

CHN: So there's other ways to comply with Title IX without adding women's hockey?

Whitman: Right. And certainly women's hockey is one of those options.