Special report: Examining the Galen Center’s woes
Though it opened to great fanfare in 2006, the Galen Center has not become the sports hub many thought it would be. Joey Kaufman examines why in this special Daily Trojan report.
Best-laid plans
The old tale goes like this: USC, when recruiting Aviation High School guard Paul Westphal in the late 1960s, showed the decorated prep standout blueprints of an on-campus arena to be built in time for his senior season in 1972.
But the arena never came, and the promise never was fulfilled by the time Westphal left for the NBA.
So the Trojans’ men’s basketball program stuck the team out at the antiquated Sports Arena in Exposition Park. It would take USC nearly four decades to follow through on that promise of an on-campus arena, but the school eventually did just that in 2006 when it opened the Galen Center, a 10,258-seat facility situated on the edge of USC’s University Park Campus and just a mile south of a suddenly bustling Downtown Los Angeles.
A hub for USC basketball was born, symbolizing the hope that the Trojans, who often played second-fiddle to crosstown rival UCLA, could be more than an afterthought in the city and become a consistent NCAA tournament team.
But roughly six years later, the Galen Center hasn’t exactly represented a new era for the USC men’s basketball team. And in recent months, the program has fought, in spite of the sparkling new digs, to avoid sinking deep into the red and even to stay relevant in an already crowded Southern California sports scene.
Maximizing revenue
Recently, USC’s men’s basketball program has ranked near the bottom of the Pac-12 in terms of revenue and profit, according to documents filed with the U.S. Department of Education last October. Though the university is private, it still must file annual reports with the Department of Education as mandated by the Federal Equity in Athletics Disclosure Act. The 1994 law requires coed post-secondary educational institutions that participate in Title IV, such as USC, to disclose athletic participation, expenses, revenues and staffing for their men’s and women’s teams through the yearly reports.
For the 2011-12 academic report, USC reported $4.81 million in revenue for men’s basketball, pitting it just ninth among Pac-12 schools.
“Would we hope [basketball] drove additional revenues? The answer would be yes,” said Steve Lopes, USC senior associate athletic director and chief financial officer for the athletic department. “That’s why we have to do well in that sport because it has the potential to drive revenue.”
Moreover, USC’s expenses ($4.85 million) for men’s basketball surpassed its revenue, making it one of just three Pac-12 schools to post a loss. The school’s 2010-11 report showed an even larger disparity between expenses ($4.18 million) and revenue ($3.72 million). By those calculations, the men’s basketball program fails to generate a profit by itself.
Though USC’s revenue from men’s basketball has averaged about $4 million according to the university’s last two reports filed, the program’s expenses stand higher than those of its Pac-12 counterparts, which reported similar men’s basketball revenue figures. Oregon State and Washington State reported $5.49 million and $4.59 million in revenue for men’s basketball in 2011-12, respectively, but posted expenses more than $1 million less than USC.
Expenses are primarily composed of coaches’ salaries, scholarship aid, travel fees and other maintenance costs. Former USC head coach Kevin O’Neill, who was fired mid-January, was among the conference’s highest-paid coaches, receiving $1.7 million in total compensation in 2010-11, according to the school’s most recent federal tax returns.
But Lopes, in spite of the challenges the program faces and the chance of it sinking further into the red, remains optimistic. He describes the current outlook for men’s basketball as “positive,” citing the fact it more or less covers its expenses — making it the only sport at USC other than football to do so.
“Look, the revenues are down,” he said. “If you look at the arena, you know it’s not very full. But there is still a lot of potential in men’s basketball for us in terms of revenue.”
Call it a glass half full.
Though revenue from men’s basketball is lower than administrators might hope, USC still posted a record $84 million in athletics-related revenue for 2011-12, with $25.8 million coming in non-allocated revenue. Lopes said most athletics-related donations aren’t given to individual sports, but to the department as a whole, typically through the four primary support groups: Cardinal and Gold, Women of Troy, The Committee and the Scholarship Club. This largely comprises the non-allocated revenue figure. Alumni are presented with the option to donate to football or men’s basketball exclusively, but the preference is usually to donate to the department itself.
Thus, most team-specific revenue is generated by ticket sales, which for men’s basketball remains increasingly problematic.
Declining attendance
In recent years, USC’s drop in on-the-court production has perhaps been most reflected by the growing number of empty seats at the Galen Center.
Since the 2007-08 season — O.J. Mayo’s lone season with the program — attendance has been on a steady decline. That year, an average of 8,468 fans made their way to the Galen Center per game. But the next season, with Mayo in the NBA, average attendance dropped by 34 percent; by the 2009-10 season, the slide continued: 5,011 per contest.
Since then, nothing has changed to halt the drop in attendance, not even an NCAA tournament appearance in 2010-11, a season in which the school averaged another record low for arena attendance with a meager figure of 4,691.
Not to be outdone, the 2011-12 Trojans, amid a record 26-loss season, eclipsed that dubious attendance mark too, averaging 3,970 fans per game — less than 40 percent capacity for the then-five-year-old arena.
And attendance this season through 13 games has hardly changed, as USC has averaged 3,973 fans per contest.
“It kind of comes with the situation,” said USC interim head coach Bob Cantu, who replaced O’Neill in mid-January. “When you’re not winning, not as many people come out. That’s just the truth.”
Though USC made the NCAA tournament in each of the building’s first three seasons, the team’s recent struggles have been woeful. Since the 2011 Pac-10 tournament, it’s record is 17-40. And as a result, fewer and fewer Angelenos have flooded the facility.
“The Galen Center is fantastic,” said former sports business consultant David Carter, now a professor in the Marshall School of Business, “but people usually don’t show up to see a building. They show up to see the content.”
And that content, particularly the Trojans’ style of play, has hardly helped.
According to ESPN Stats & Info, over a span of 113 games under O’Neill, USC ranked last in points per game among teams from the ‘Power Six’ conferences, which include the ACC, Big East, Big Ten, Big 12, Pac-12 and SEC. The former NBA coach preached defense, defense and more defense in addition to a tough, grind-it-out style on offense that proved useful in notable upset wins over No. 9 Tennessee in December 2009 and No. 19 Texas in December 2010.
But that style failed to create a buzz among locals, alumni and students alike.
“You know, we just dreaded watching the games because there was no excitement on offense,” said Alejandro Madrid, a senior majoring in accounting and a men’s basketball play-by-play broadcaster for KXSC, USC’s student radio station.
Cantu, who worked as an assistant under former USC coaches Henry Bibby, Jim Saia and Tim Floyd, has tweaked that defense-intensive formula, pushing for a more up-tempo brand of basketball.
“We’re playing with a little more exciting style of play,” Cantu said. “We’re pushing it a little bit more. We’re playing with a little more freedom. If we can get some wins, more fans will be interested in what we’re doing and come out.”
Under Cantu, the Trojans have averaged 72 points per game, a jump from the 63.8 mark during the first 17 games of the season under O’Neill.
It’s been an attempt, foremost, to get players to be more “loose” on the court, Cantu said. But coincidentally, it’s also a style of play that can often get more people in the arena and resonate with fans.
But beyond an up-tempo pace, the most powerful, if not the only, remedy for USC to fill more seats at the Galen Center is to win.
“When you play in a pro city like L.A. or New York, in order to get that fan base in, you have to get consistent winning,” said senior guard Jio Fontan, who transferred from Fordham University in January 2010. “The football team consistently wins, and that’s why they get the crowds. You can’t take it personally. You just have to do your job. The better you do, the more support you’ll get.”
USC has won in men’s basketball in recent years, but it’s struggled to do so consistently. Yes, the program has made the NCAA tournament four times in the last six seasons, but it hasn’t been enough to create a lasting spark.
In the two seasons the Trojans missed out on the postseason, they weren’t competitive. In 2012, they lost a school-record 26 times, winning just once over the final three months of the season. And even despite finishing 16-14 and sweeping UCLA in 2010, the team was amid a one-year, self-imposed postseason ban, essentially rendering much of conference play meaningless. Predictably, fan interest suffered as a result.
Unlike the Trojans’ football program, which holds claim to 11 national championships, men’s basketball lacks the luxury of relying on tradition when the wins don’t pile up. It has never won an NCAA championship and hasn’t been to a Final Four since 1954. So, as of late, when USC doesn’t win in men’s basketball, there is little to fall back on.
Sports as a destination
Because of USC’s location within Los Angeles, it also faces the challenge of carving out a niche. The city features two professional basketball teams, two professional baseball teams, two professional hockey teams, two professional soccer teams and arguably the most decorated college basketball program in UCLA. That’s a lot for a fledgling program to compete with, not to mention college football’s rising popularity nationwide.
“This is a hard market to make a splash in,” Carter said. “Southern California is used to winners. USC is used to winners. Not having a competitive team and a star is a problem.”
Comparatively, the Staples Center, the city’s main basketball and hockey venue that opened in 1999, is situated at L.A. Live and is surrounded by dozens of restaurants and various attractions within one block. Fans are presented with more dining and entertainment options than at an on-campus arena such as the Galen Center. And in Los Angeles, often referred to as the entertainment capital of the world, a lack of such options can become problematic.
So an alternative for USC, to combat sustained losses, could be to make the facility a “destination,” according to Carter.
“If you’re not winning, the way you drive attendance to Galen for basketball games is to continue to try making it a destination for the students from which they then go out to parties, to dinner and to dates,” Carter said. “Use that as focal point.”
Though it pales in comparison to the Staples Center as an entertainment venue within Los Angeles, the Galen Center has been used as of late for other purposes than sports. In 2012, the rapper Drake held a concert at the arena, and so did the rock band The Fray in 2009. The Galen Center also housed the Nickelodeon Kids’ Choice Awards the last two years, signaling the arena could be used for other purposes beyond USC’s athletic teams.
What’s next?
Upcoming on the agenda for USC is to hire its next men’s basketball coach, a ritual that now has to be performed for the third time since the Galen Center opened. Potentially, it could remove the interim tag from Cantu, who has led the team to a 4-3 mark since taking over, and retain the coach who has spent the last 12 seasons with the program. Or, it could hire someone from the outside, seemingly to provide a jolt for a program often labeled a “sleeping giant.”
The hope, naturally, stands to again try to turn the Trojans’ program into a consistent NCAA tournament team, much like it became for a brief period of time under Floyd, who led the team to three straight tournament appearances for the first and only time in school history from 2007-09.
Many insist that a stronger foundation is in order.
“In the last 10 years, they’ve had some really good teams,” ESPN college basketball analyst Jay Bilas told the Los Angeles Times in January. “But I don’t think people have looked upon it as having a program.”
Others remain baffled. How could USC, with a shiny new on-campus arena within a metropolis such as Los Angeles and history of success — nearly 100 NCAA championships in all sports — be so inconsistent on the hardwood?
“It’s got all the resources,” said former USC forward David Blu, a member of the Trojans’ 2000-01 team, which made the Elite Eight. “It’s got the Galen Center. It’s got uniforms. It’s got all the athletic equipment you need. It’s got the weight room. It’s got the shooting machine. It’s got all the managers you need. It’s got training tables. It’s got everything an athlete needs to be at the top of his game. So for me, USC should be a postseason school every year.”
To figure out how the Galen Center can become a thriving, profitable hub for the university, perhaps this is the moment to recite the time-old question: Can USC win, and win consistently, in men’s basketball?