I'm not sure there's a better way for this to work, but here's how it currently works:
- REA takes 52% of football ticket revenue. Based on what I've read in this thread, lately that equates to about $375k per year.
- REA asks for nothing else from the university. This football ticket revenue is just UND's way of paying for use of the arena each year.
- Because REA is using a percentage of football ticket revenue and not asking for a flat fee, REA is doing UND good because UND isn't hand-cuffed to a defined amount that they may not be able to pay. The more successful that football is, the more goes to REA. The less successful football is at generating money, the less goes to REA. If the contract said that UND is required to pay $375k each and every year while REA takes 0% of football ticket revenue....but football fans don't show up....where does UND pull the extra money from if the program is already strapped for cash?
CLIFFNOTES: REA gets 52% of football ticket revenue. UND gets use of an arena for hockey, basketball, and volleyball events and practices. UND doesn't have to manage ticket sales as REA is also handling that. REA uses the money generated to keep the arena in tip-top shape and puts some money away for projects and unanticipated expenses each year. REA sells merchandise for UND (likely the top grossing UND merchandise retailer). REA then gives back all additional revenue to UND after they pay for upkeep and put a little away in savings for things like this.
Sounds like UND and ALL of the athletic programs make out quite well thanks to REA on a $375k or so annual expense.