A look at the work being done at Neyland Stadium. Tennessee is in the third phase of a more than $200 million renovation of the 87-year-old stadium.

From certain vantage points in Knoxville, Neyland Stadium looms large.

Since December, it’s been even more noticeable thanks to a stories-tall crane towering over the stadium’s west side.

It’s a sign of the times, another chapter in the history that has known few breaks in additions or expansions since the first spade broke ground on Shields-Watkins field in 1919.

That huge crane is also a sign of resistance to the nation’s current economic woes.

As the third of five phases in a more than $200 million renovation of the University of Tennessee’s 87-year-old stadium approaches its midway point, Neyland Stadium remains a major landmark in college football, for fans across the state and, perhaps most importantly, on the athletic department’s ledger.

Setting the Stage

Even though Neyland Stadium isn’t visible from UT athletic director Mike Hamilton’s window, its power is felt inside his Stokely Athletic Center office.

Since taking over for Doug Dickey in July 2003, Hamilton has overseen a major overhaul of Thompson-Boling Arena, the construction of Pratt Pavilion and upgrades to other athletic facilities on campus.

But a master plan for 102,038-seat Neyland Stadium was Hamilton’s centerpiece. It’s also something of an insurance policy.

For Tennessee’s athletic department to remain successful - and one of a handful nationally that operate in the black - football has to be successful on the balance sheet. Directly or indirectly, football is responsible for about 85 percent of UT’s overall athletic budget.

And if football is the engine that drives the train, as Hamilton often says, Neyland Stadium provides the fuel.

Last year, football ticket sales brought in more than $24 million, the single largest revenue source for the athletic department, and some $19 million more than men’s basketball ticket sales.

But a stadium that accounts for more than 25 percent of the department’s revenue and has endured more than 16 additions or expansions since opening in 1921 was beginning to show its age.

Fans saw tight concourses and long lines at concession stands and restrooms. Those with a more complete view of the stadium saw leaky pipes and power outages.

“We were never in danger of the stadium falling down or any crisis like that,” executive associate athletic director John Currie said. “But you get to crises like that because you don’t plan and don’t manage and maintain as you go along. We have a pattern where we’ve done that through the years, we’ve planned and maintained and looked ahead.”

Looking forward, a new stadium wasn’t an option. Neither was allowing the current one to deteriorate.

So in November 2004, Hamilton outlined his plan for Neyland Stadium to the Board of Trustees’ Finance and Administration Committee, which applauded his presentation.

“If you were in business,” Jim Haslam, a university trustee from 1980-2006 and the founder of Pilot Corp., said at the time, “and you had something that was 83 years old - which was making 85 percent of the revenue for your company - and you didn’t spend any money on it, they would get a new board of directors for that company.”

 

Hanging Tough

The Board of Trustees approved the initial master plan one day after Hamilton’s presentation in 2004. A few weeks later, the Vols faced Auburn in the SEC championship game and then drubbed Texas A&M in the Cotton Bowl.

Since then, it’s been a wild ride, on the field and off.

In 2005, UT finished 5-6 and missed a bowl game for the first time since 1988. In 2007, the Vols were back in the SEC championship game. In 2008, the Vols finished 5-7 and Hamilton fired longtime coach Phillip Fulmer.

Outside Neyland Stadium, things were even worse.

A spike in construction costs upped the initial price tag for Phase I by some $8 million. By the time Phase II was completed last August, estimates for the total cost of all five phases had nearly doubled from $109.7 million to more than $200 million.

Then the economy turned sour, with a crash in the housing market sparking a deep recession.

“I kind of wonder what it would have been like sometimes if we’d had different circumstances,” Hamilton said. “We’ve had two losing seasons, and some are saying it’s the worst economic crisis since the Great Depression.”

Hamilton admits UT is “walking gingerly” because of the economy.

“There are still people who have resources, but everybody’s being a little more cautious about where they’re spending their money right now, justifiably so,” he said.

Largely, though, fans have continued to write checks and buy tickets - all of which contribute to the renovation process.

Some are spending more than others.

 

Footing The Bill

In one form or another, every fan who attends a game helps with the renovation project in Neyland Stadium. With more than 710,000 fans passing through the turnstiles last year, Tennessee has a lot of benefactors.

“Every person is doing their part, and we appreciate every single one of them,” Currie said.

Increasingly, however, a smaller portion of fans are underwriting the vast majority of the Neyland renovation.

According to UT’s figures, more than $22 million of the funding for renovations has come from donors in the posh, 422-seat East Club section added in Phase I.

Ongoing construction in the first segment of Phase III includes a West Club section, which requires a one-time capital donation of either $70,000 or $100,000 for a pair of seats, depending on seat location and payable over five years.

To maintain those seats, fans must contribute $10,000 per year to the Volunteer Athletic Scholarship Fund, which covers tickets, parking and food.

The second sequence of Phase III also includes premium seats in the Tennessee Terrace, which requires a one-time $2,000 capital donation per seat, and then a $3,000-per-seat ticket/licensing fee every year thereafter.

“I think those people understand that they’re not just buying a seat, they’re providing real leadership for the university and for the program,” Currie said. “They’re making a gift. They’re making a gift to help Neyland Stadium.”

Premium seats in Neyland Stadium began in 1987 with the addition of suites on the west side, which are due an upgrade before the 2009 season. UT added suites on the east side in 2000.

The trend, known as market segmentation, offers fans who can afford it a much different gameday experience.

“Some people want to drive a Prius, and some people want to drive a Cadillac,” Hamilton said. “I liken it to Baskin-Robbins, (31) flavors of ice cream. Different people want different flavors of ice cream.”

Catering to those varying tastes is vital, and not just for those with the means to indulge them.

UT will not raise season ticket prices this year, although fans will pay more because the Vols play an additional home game this season.

But the changes to concourses, eventual aesthetic changes to the exterior of the stadium and other upgrades are enjoyed by plenty of fans who don’t purchase a premium seat.

“We want Tennessee basketball, we want Tennessee football to be accessible to fans and citizens in our state and our community,” Currie said. “When someone is willing to make a leadership gift for club seats, they’re helping maintain that accessibility … because they are assuming a larger percentage of the cost of those renovations, which have to happen.”

 

Steady Demand

At the completion of Phase III, UT will have 844 club seats and 1,782 seats in the Tennessee Terrace to go along with about 118 suites leased to individuals and businesses.

Filling those seats - and finding the donors to occupy them - is vital to UT’s renovation plan.

“That’s the only reason we’re able to do the renovation,” Hamilton said.

So far, UT has identified $139 million in funds - either through donations or financing options - to cover the cost of the first three phases.

UT is renovating Neyland Stadium without any state or university dollars. The University of Washington, for example, is seeking $150 million in state funds for a proposed $250 million upgrade of Husky Stadium.

While the disparity between the athletics budget and potential university cutbacks that could include the loss of some 320 faculty members is a concern for some, faculty senate president John Nolt said there is widespread understanding that the athletic budget isn’t taking funds away from the university.

“There is a worry that it might not always be that way,” Nolt said. “If we don’t have a winning football season for several years in a row and athletic receipts are down, then there’s a worry about what if they don’t make their budget and would we be held responsible for that debt in some way.

“But that’s not an issue for us at the moment. It’s not as if athletics is draining the campus. They’re not.”

The vast majority of dollars at UT have come through premium sections, like the East Club, which culled many of its initial patrons from a waiting list of nearly 100 fans seeking skyboxes.

However, many are new donors.

“Frankly, we’ve had a lot of new donors come to the table,” Hamilton said. “That’s one of the real interesting things for me. I was in development for 11 years here. I credit our development office for really going out and tilling that ground and finding those people. It’s a credit to our donors who have bought into the concept of the Neyland Stadium legacy.”

In spite of worsening economic conditions, West Club and Tennessee Terrace sales remain brisk.

According to Currie, about 70 percent of the West Club seats have been sold, and the Tennessee Terrace, still more than a year away from opening, has commitments for 600 seats. As of Nov. 1, Currie said, UT had commitments for only about 30 terrace seats.

Hamilton says the hiring of new coach Lane Kiffin has contributed to much of the renewed excitement in football. The athletic department even saw its donations rise more than 20 percent coming off a losing season in 2005, Currie said.

“Even in the face of a kind of overall specter economically, people are really excited about where we’re going,” Currie said. “We’ve been very, very fortunate that those fans and supporters are so passionate about it for the long term and understand the overall impact of Tennessee football on our whole community and our way of life around here.”

 

Moving Forward

That huge crane will be gone by the start of football season, but Tennessee’s renovation plans will keep right on going.

The second segment of Phase III is scheduled to begin shortly after the 2009 season ends, and the city of Knoxville has already granted an air rights easement for the Tennessee Terrace, which will extend over the sidewalk on Phillip Fulmer Way.

That project, which includes a brick and wrought iron facade on the north and west side as well as a new entry plaza at Gate 21, will bring UT’s renovation past the halfway point. Phases IV and V are unscheduled, although UT hopes to have the entire renovation complete sometime near 2020.

And by phasing the renovation, UT has tried to ensure that it won’t be stuck with an unfinished project should conditions continue to worsen.

As it stands now, UT has already paid off $25 million of the first two phases, with the remaining $25 million or so being funded through five-year commercial loans and 20-year bonds.

“The fiscal planning process has been very appropriate in that regard,” Currie said.

Response from fans has been good, too. Of course people always seem to be impressed by Neyland Stadium.

Hamilton found that out early on.

Driving through campus after church on a Sunday afternoon in 2003, he noticed two men peering through the gates at Neyland Stadium. Turns out, the two men were traveling south from Pennsylvania and wanted to get a look at UT’s massive football stadium.

“I’ll never forget,” Hamilton says. “They were saying, ‘We’d always heard about Neyland Stadium. We just wanted to see what it was like.’ ”

So Hamilton unlocked the gates and gave them the grand tour, waiting as they snapped pictures.

By preserving and improving Neyland Stadium, Hamilton wants to make sure that it remains UT’s crown jewel for a long, long time.

“We’re trying not to think just short term during the time I’m going to be AD … but what’s it going to look like for my kids and my grandkids?” Hamilton said. “That’s what we’re trying, take a more long-term approach to the reconstruction of the stadium.”

Drew Edwards covers University of Tennessee football. He may be reached at 865-342-6274.