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UNO Athletics; The Students Have Spoken!

The University of New Orleans (UNO) Student-Athletes have had a rough couple of years. First, in 2005, Hurricane Katrina devastated the campus and athletic facilities. The result was the suspension of 9 athletic teams and decreased student enrollment. UNO Enrollment has still not recovered to pre-Katrina levels which has severely reduced the athletics funding available from student fees. This, plus recent State budget cuts (athletics share was going to be appprox. $1.5mil) have stressed the finances of the athletics department in a big way. Now, last week UNO students voted “NO” to an increase in student fees to keep athletics functioning.

The result of the “NO” vote by students will likely be the elimination of the entire athletics program. Only if the State Legislature steps in to help (or a major private donor) can the program be saved at this point. Continue reading

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May 3, 2009 Posted by | College Sports Business, Finance, NCAA, Uncategorized | 2 Comments

Is college athletics a free market

I was struck by a comment by my good friend Bob Boland at the College Sports Research Institute Conference in Chapel Hill, NC last week. I moderated a panel that included Craig Esherick, the former head men’s basketball coach at Georgetown, Boland, a former collegiate administrator, lawyer, sports agent, and now professor at NYU, Matt Denhart, an Ohio University undergrad representing the Center for College Affordability and Accountability, and Dr. Kadie Otto of Western Carolina, the current Executive Director of The Drake Group.

Bob made a comment regarding coaching salaries and athletic budgets in these tough economic times. He stated that he did not have a problem with coaches earning as much as they can because it is a free market.  Bob is one of the smartest people I know and I certainly understand his rationale, and currently without an anti trust exemption coaches salaries cannot be capped. In a perfect capitalistic economic system this makes sense–but in my opinion intercollegiate athletics (primarily at the D One level) does not exist in a logical economic system given that the generators of the income do not share equitably, or in many cases not at all, in the profits of the enterprise that create the market salaries for coaches. Continue reading

April 26, 2009 Posted by | Finance, Reform, Uncategorized | , , , | Leave a comment

Coaches Salaries & Using Ohio State as an Example.

Ohio State Athletics Salaries from the Columbus Dispatch

Ohio State Athletics Salaries from the Columbus Dispatch

We all know that the discussion of salaries at major NCAA FBS institutions can keep us chatting in the hallways at work or in the classroom for hours. On April 13th, the Columbus Dispatch chronicled “A Decade of Growth” in Ohio State Athletics Salaries. Although, specific to Ohio State, the article reminds us of the tremendous growth over the past 10 years in salaries at the largest and most powerful athletics programs.

Part of me wants to praise Ohio State for supporting all of their coaches with good salaries. The job of being a coach at Ohio State or at any DI institution is not easy and most coaches are underpaid. I’m not talking about football and men’s basketball, but about the other 15-20 programs that DI schools sponsor. Remember, these are folks who place their livelihood in the hands of 17 year olds  during the recruiting process… please choose my school!  They are away from home a large portion of the year traveling with the team and recruiting. Even when they are in town, they are working crazy hours and dealing with everything from girlfriend/boyfriend problems their athletes are having to being a productive member of the athletic department and putting in hours of community service. So, that is the part of me that says, FINALLY – more coaches are being compensated fairly. Continue reading

April 14, 2009 Posted by | Coaches and Coaching, College Sports Business, Finance, Uncategorized | 1 Comment

Collegiate Athletics Not Escaping Economic Concerns

The current state of the economy has people buzzing not only in Washington, but around college campuses all over the country as well. As institutions are coping with decreasing state aid and dwindling endowments, tough decisions are being made on every campus and athletics has not been immune. To date, six Division I institutions have officially dropped a total of 10 sports for the 2009-10 academic year. Unfortunately, the dropping of sports will only increase as institutions process the realities of their FY10 budgets.

If you look at the Division I institutions that have officially announced the dropping of sport programs for FY10 [Portland State, Wagner, Pepperdine, Northern Iowa, Vermont, Iona], none of these schools are considered Division I powerhouses. Couple the fact that they all have limited budgets and resources with an economic downturn, and you create a recipe for needing to make tough and radical decisions. Having been involved in the wrestling community most of my life, I am certainly not an advocate for dropping sport programs.

Continue reading

March 27, 2009 Posted by | College Sports Business, Finance, Uncategorized | | 1 Comment

Counter-Trend Spending & College Sport

I have to begin by letting everyone know that this topic (and a lot of the content of this post) is the result of an e-mail conversation I had with Nick Infante, the illustrious editor of College Athletics Clips. If you are not familiar with College Athletics Clips, it is a fantastic service that keeps professionals in college athletics up-to-date on news and events through providing summaries of articles as well as commentary pieces. Best of all, OHIO has paid for access for students through the library website (using your Oak ID).

Anyway, back to the topic. We all know that the country, and most of the world is in the midst of a recession. So, what is the best strategy for college athletic programs to survive and even thrive in this economic climate?  I’m not sure this post will answer the question, but I want to propose one idea that Nick and I think has some merit.

Can a case be made for going against the grain and increasing instead of decreasing spending in tough economic times? The term counter-trend spending (or as Nick puts it “ignore-the-recession spending”)  encompasses this idea.

Nick argues that, “Whether you’re a big-time athletic program, a beer brand or an appliance store, strategic spending during a recession could be an effective way to gain on competitors. Increased spending – on personnel, advertising, price promotions, etc. — could attract recruits, fans, coaches & staff (for big-time athletic departments); new customers, distributors and bars/restaurants (for a beer brand) and new shoppers (for an appliance store).”

Continue reading

February 1, 2009 Posted by | College Sports Business, Finance, Marketing, Sponsorships and Sales, Uncategorized | , | 3 Comments

San Diego State Football Issues

A recent article caught my attention because of how grounded in reality it was while discussing the pros and cons of college football at a non-BCS school. The gist of the argument made by the author (Mark Zeigler) is that trying to play big-time college football when the institution is not a member of a BCS conference is a very bad idea.

At San Diego State, the athletics deficit has increased substantially in recent years from $750,000 (late 90’s) to $3.3 million (2007-08). Yet, during the same year when a $3.3 million deficit was realized the school reported $2.45 million in football revenue. How is this possible? The same way many schools claim that football is profitable. By using the generally accepted and allowed special accounting of athletic expenses. Although the article is about one school, the same arguments could be made for many of the non-BCS school.

When reporting expenses to the NCAA and even to the U.S. Department of Education Office of Postsecondary Education for EADA data, institutions have some interesting reporting categories such as “unallocated by gender” and “non-program specific.” Both of these categories are handy when trying to minimize the visual impact of the expense of football. So, when  a ticket manager salary shows up under “non-program specific” it basically shows that the cost is a departmental cost. However, if you were to really look at the time/effort allocation of that person I am guessing that it would be 95% football/basketball and 5% the other 15-20 sports.

The other interesting financial hiding place for programs is booster clubs. Many institutions couldn’t exist without the private support they receive from boosters. However, institutions are not required to disclose financial info from booster clubs with respect to sport/gender allocation. So, if a football stadium renovation and a football coach performance bonus are paid out of a booster club, it generally will not show up as a football expense item. Some States do require this type of disclosure, but neither the NCAA nor the EADA does.

In an e-mail to me, my attorney friend, Kristen pointed out the following “If colleges allocated facilities construction, maintenance, training, med, insurance, tutors, & other costs to the teams that actually create them, even BCS teams would show a loss.  I really would like to see a genuine accounting audit of a big time football program to see what the real numbers are.”

I have to agree that it would be really really interesting to have the finances of all schools reported and published in a consistent manner so it could be compared apples to apples.

December 30, 2008 Posted by | BCS, College Sports Business, Finance, Football, Uncategorized | , , | Leave a comment