Thursday, May 1, 2014

The Debate on Paying College Athletes- Opinion based on facts

I listened to a recording of former athletes and a few numbers guys talking about unions in college athletics and how student athletes should be compensated on Huffington Post.  To say I am surprised by what I heard would be a lie, but it did give me quite a few things to consider in the debate.

I have always sided on the purity of college sports, but I do understand this is a gross misrepresentation.  There is nothing pure about the modern athletic endeavors of a college, but there never has been.  Most of the rivalries college teams use, and in many cases the mascots, are deeply rooted in history.  This is what makes this sport great.  Knowing Michigan pride on being called wolverines coincides with its disdain for people from Ohio over the battle for Toledo; realizing why Mizzou and Kansas will never like each other because of the battle between free states and slave states; understanding Georgia Tech chose gold for a school color as an intentional insult to the University of Georgia are only three of numerous instances that make people cheer on Saturdays in the fall.  And all of this comes at a price.

The jersey you see in the photo to the right of this blog was bought with the same intent it was sold: to honor star Georgia Tech receiver Calvin Johnson.  One of the ideas presented on the recording is that a portion of profits from items such as these should be saved in an account for student athletes to collect once they graduate, or used to complete a degree once the pro career doesn't work out as they dreamed.  I would support this fully.  If schools continue to sell a player's jersey the day after he or she has graduated, that athlete should receive a portion of the profits.  However, I cannot under any circumstances support the idea of paying athletes just because they "make" money for a school.

No one disputed Andrew Zimbalist, a professor at Smith College and author of "Unpaid Professionals," when he said at the FBS, athletic revenue makes up at most 10 percent of a schools profits.  This dispels a notion that schools would suffer financially if they didn't have an athletic department, which is an argument most people claim.  Yael Averbuch, member of the U.S. national soccer team, simply stated she tailored her athletics around being a student in an effort to become a professional athlete.  She admitted she didn't know the numbers behind paying athletes, but did say she felt like an employee, which to me sounds like a choice she made, not a school requirement.

I understand most student athletes are not on full scholarship, but I asked a former FCS football player if he ever went hungry.  He said no.  He cited a 7-3 principle, which means he is entitled to three meals a day, seven days a week.  This is a provision for food allowances included in the NCAA bylaws (16.5.2 on page 210), and it can be greater than what a school lists as its maximum cost for meals for regular students.  One thing I do not agree with in the bylaws is student-athletes who do not receive athletic financial aid are not covered under many meal provisions, unless they have a meal plan with the school.  However, according to the bylaws, additional supplements and certain snacks are already provided to the student-athlete at his or her request.

The former football player said he actually feels blessed because unlike many college grads he knows, including his wife, he doesn't have to worry about student loans: never has and never will.  He said everything he needed was taken care of: housing, school books, and especially tuition.  Assuming this policy has not changed at the school he graduated from, a student-athlete with a full-ride, whose major require 120 credit to obtain a degree, taking 12 credits for 10 semesters at Georgia Southern (completely FBS beginning the fall of 2014), made over $30,000.  This total does not include room and board, meal plans, books and the other peripheral necessary costs of attending school.  Regardless, most star athletes are full-scholarship players at their respective schools, meaning the do not pay for their college except by committing to their studies and their sport.  If they can't understand how they are already paid, then they, as with Averbuch, are going for a shot in the pros: something Scott Jennings with the Courier-Journal in Louisville, KY says only 2 percent of student athletes achieve.

One thing that all four of the panelists agreed on is there needs to be changes and reform in the NCAA.  I concur.

Tuesday, April 22, 2014

The Debate on Paying College Athletes- The Cost of Academics

The world of college athletics may be headed for a major schism if Northwestern University doesn't win an appeal, and its football players vote in favor of a union.  For many who believe that only a select few schools should be eligible for a national championship, a vote in favor of a union representing college athletes is nothing more than a backdoor step in that direction.  For those who believe athletes are abused because they make so much money for their college and the schools don't give them a stipend, it is pretty apparent they have read more headlines than they have researched facts.

In today's information age, it is a surprise that people don't search for the numbers showing how little athletes receive.  If they took the time to research this topic, they would find the average college student is abused by its school, for the benefit of the student athlete.  As tuition costs continue to rise at schools across the nation, the amount of money given to an athletic department has grown at a faster pace, than what is allotted to the education of an average full-time college student.

The Knight Commission on Intercollegiate Athletics created a database with the financial data from public schools across FBS football between 2005 and 2012; private schools, such as Northwestern, are not required to report such findings.  The data shows the spending at colleges and universities, in an effort to encourage transparency in how money is used by athletic departments in comparison to the mission of their respective schools: educating students.  You can look at the average amount of costs for educating a full-time student, how much a school or government entity allots for athletics at the school, the operating costs of the athletic department per student athlete, and the operating costs for the athletic department for each scholarship football player.  It also breaks it down by conference, and even school.

In 2012: the SEC, ACC, Big Ten and Big XII institutional funding per student athlete was less than educating costs per full-time student.  The Big Ten actually cut institutional and government funding for athletic departments by 45 percent between 2005 and 2012.  In the PAC-12, Big East, and all of the remaining conferences, academic costs per full-time student was less than funding per student athlete.  In Conference USA, the cost for educating a student actually dropped, whereas the other three categories grew.  In no case, did any of these categories come close to athletic spending per athlete, and the amount of money spent on scholarship football players was even more for each conference.  The SEC showed a 101 percent increase in operating costs for each scholarship football player: $262,486 in 2012.

Even though Northwestern is a private school, it is a member of the Big Ten.  The Big Ten average for institutional spending per athlete was $2,592; average academic costs per full-time student was $18,606; average athletic department operating costs per student athlete was $130,835; average athletic department spending per scholarship football player was $213,987.

Self-sustaining athletic departments were discussed in a previous blog.  Pennsylvania State University, The Ohio State University, Purdue University and Nebraska University were four of seven schools who fall under this category, meaning they do not rely on institutional funding to support the athletic departments.  Penn State's numbers were not available, but Purdue was the only school where educating costs increased more than institution spending on athletes, and costs increased more than the average FBS program.

Though it is not considered self-sustaining, Wisconsin increased academic spending more than athletes, but it was just over half the average FBS program.  Indiana, Iowa and Michigan actually increased athletic spending by more than the FBS average of 77 percent.  Iowa increased athletic spending by 92 percent, and academic spending by 44 percent: both more than the average FBS program.

Saturday, April 19, 2014

The Debate on Paying College Players- The Basics

On April 25, football players at Northwestern University will have the chance to make college athletics history.  They have the chance for a vote that would appear to move college sports forward, but might actually be a death knoll for the sport: the vote to be represented by a union.

The decision came in March, and since then, officials at Northwestern University have tried to appeal the ruling, saying that college football players are students first, and in no way are they employees of the school.  Keep in mind, this is a private school, so public universities in Illinois would not necessarily be affected by a decision.

Soon after this ruling, the house in the Ohio Legislature passed a measure saying college athletes are not employees, but in Connecticut, a measure says they have the right to unionize.  Even for someone who follows this relatively closely, the debate is a hot topic where few people have all the facts and most moves are made based on emotion.

One issue that keeps arising is how much money student athletes, mainly football and basketball players, make for their university and the NCAA.  USA Today reports in 2012, $504 million was sent to 228 Division I member schools: just over $2.2 million per school.  Of the 228, only about 10 percent of college athletic departments actually make money.  Athletic departments are funded by the money sports generate through ticket sales, merchandise and funds from the NCAA distributed to the member schools. However, even members of that 10 percent, which might be considered "self-sustaining," rely on subsidies from the school and government entities. Only seven schools on the list do not rely on a subsidy, but 76 percent of schools calculate subsidies as 50 percent or more of their revenue.  Subsidies at Cincinnati and Oregon State, two schools in the FBS "Big Six Conferences", are comprised of just over 33 and 31 percent of their revenue, respectively.

Data compiled by USA Today for 2011 shows the lowest revenue-generating school on the list, University of New Orleans, had almost $3 million in expenses.  Not including subsidies, such as student fees and government funding, the school made less than one million dollars.  Including the subsidies, they were just under $150k in the clear.  Assuming men's basketball is the money sport at the school, and this "surplus" were divided equally between 12 team sports, that's just over $12K per sport.  Seventeen basketball players could theoretically get an additional $712 each.  Basketball practices, according to NCAA regulations, can start in September.  If the team makes it to the NCAA championship, that's an additional three dollars a day for seven months.

At Texas, which does not use subsidies, athletics are just over $2.5 million in the clear.  Sixteen sports could split the extra money: $1, 564,087.81 each.  Their football roster has 98 players, and in theory each player could receive an additional $15,960.08.  At about eight months, including spring and regular season football, that's $66.50 per day.  Remember, this number is only one of 7 self-sustaining schools, and represents the most any student could get because Texas had the greatest difference in revenue minus expenses.

Under basic definitions, college athletes could be employees: they have a contract to play a sport at a university, and in turn, that university provides reasonable compensation for the student's choice to play a sport.  Simply put; said school covers student's education expenses including room and board as well as meals, student plays sport for school and complies with the rules of the NCAA.  Perhaps students need to form a labor union; representation that looks out for their interests as a whole, to include managing compensation, hours worked, working conditions, etc.

According to the NCAA website, Division I and II schools provide over $2 billion dollars in scholarships for over 126,000 student athletes, which means an average of $15, 873 per student.  Some students receive more, others receive less, because it is a coach's decision based on how much a school can provide in a certain sport.  Many student athletes receive partial funds that do not cover the full cost of college attendance.

To sum this up, paying college players is not something the sport can afford at this time.


Sunday, February 2, 2014

Winter Means Big Money for the NCAA

The first day of spring is March 20.  Before that day hits, The NCAA will have gone through the Bowl Championship Series Bowls, consisting of the Sugar; Orange; Rose; Fiesta and a BCS National Championship, and also the start of March Madness.  The first round of the NCAA basketball tournament starts on the 16th of March.  Between TV contracts, ticket and merchandise sales, the NCAA stands to have a big pay day.  Super Bowl Sunday just wrapped what many might believe is probably the largest ad season: the NFL Post Season. According to The Washington Post, for the big game, the average price for an ad is $4 million.  But March Madness has consistently made more over the past few years... and the spread is growing.

Marketplace.org says in 2012, TV ad revenue reached over $1 billion for March Madness.  Think Progress says that in 2009, the college football bowl season made $261 million.  In addition to this, the money from bowl season is tax-free, because bowls are considered non-profit organizations.  The total for bowl season is less than a $100-million difference in what Major League Baseball made in 2012, and trumps the $101 million made by the professional hockey.

Once again, the large revenues for the NCAA question the idea to not pay student-athletes for the "risk" they take on the fields of play.  A Forbes article says the waiting period to enter the NBA, one year, or the NFL, three years, is what forces people to feel students in these sports are exploited by their colleges.  In all fairness, a lot of the rhetoric to go straight to the pros before the waiting period ended got louder once the NBA enacted its one-year plan in 2005.  However, as the NCAA continues to see increased profits, the rhetoric will get louder.

Sunday, January 19, 2014

Pretty Soon, High Schoolers Will Want a Check

Mark Emmert, president of the NCAA, revealed earlier this week that the larger schools are more inclined to pay a stipend than provide student athletes with increased scholarships to cover personal expenses.  South Carolina head football coach Steve Spurrier has been very vocal in paying athletes as well.  Jacques Rozier, passionate supporter of college sports and the author of this blog says 'Let's just do away with the farce of "amateur" sports altogether?'  If we look at the changing of the tides, athletes in college will be getting a paycheck within the next five years.  And the main reasoning people provide is how much money the students make for the school compared to how much they need to live and survive in college.  I am sorry, but I am not sold!

College is not the end-product, and the prospect of paying athletes is not going to ensure said athletes will complete their education and graduate.  Unless the payments to those athletes match what a prospective pro career will be, they are going to constantly ask for more money.  And if colleges think there is a gap in recruiting for the big schools now, wait until you talk about which schools can pay more for a student to attend and play.

One argument is also that once the student's graduate or move on, if they do not get a pro contract, they have to settle for a job that isn't even a drop in the bucket compared to how much they made for their university.  I would be more inclined to provide the athletes with a post-education stipend to assist them while they search for a job or to help pay off student debt.  Many students who attend college rely on their parents, so they can return home while they search for a job, or if they have employment, they can use their paycheck for paying off debt as opposed to living expenses that come with the real world.  I would support this for the athletes, but to pay them to attend class?  That is quite a bit of a stretch.

College football implemented a playoff to help with some of the late season issues that come from scheduling and conference bias.  Paying athletes will defeat the purpose of ending the BCS, because these games will soon be determined well before the spring games kick off, let alone the regular season.  If I wanted to look at athletes more concerned with a paycheck than getting it done on the field, I would be a fan of the pros.  There is a reason I support and love college sports.  Perhaps I need to just go cheer on the local high school teams, before they become tainted as well.

Friday, November 1, 2013

Naming a Champion by Default

Some companies are so closely related to a product, the brand replaces the generic name for the product.  For example, Klennex is a brand name that replaces the generic term ' facial tissue.'  Coke is almost the same replacement for soft drinks.  Bowl Championship Series, replaces the term NCAA champion, but unlike the products named before, the BCS is not an NCAA champion.

Starting in 2014, a playoff will replace the current BCS system, but the NCAA won't recognize this as a "champion" either.  In fact, the NCAA does not recognize any champion at the FBS level of college football.  According to its website, the NCAA only recognizes three football playoffs: Football Championship Subdivision or Division I, Division II and Division III.  The bowl series dates back to 1998, but arbitrary polls such as the AP and Coaches Poll, have determined the "national champion" almost since the creation of college football.  Reluctance to change this system is what has led to the BCS and now the 4-team playoff.

The participating teams will still be determined by a panel of members who decide who is worthy to play in the championship games.  There will be no NCAA insight into the decision-making. Even though his article FBS Four-Team Playoff Won't Stop Controversy, Chuck Herron makes a valid point on politics influencing the decisions made.  Under the current system, computers make a decision, based on some human inspired data, as to which school should play in the championship.  The new panel probably won't be bound by the polls created, but it is sure to maintain the same built-in bias that keeps the rich teams getting richer in the national championship picture.

The whole process goes against "...NCAA mandates [for] fair access to their championships," which is why the NCAA does not recognize the BCS champion and probably won't recognize the champion of the new system, in spite of the use of playoff.  However, thanks to clever marketing, and a general understanding by the typical fan, arbitration does not matter.  Nor does the honor of actually being an NCAA champion.

Sunday, October 20, 2013

Relating to the Loyal Football Fan


Sports sponsorships support sports.  You might consider this redundant, but considering how there are many franchises that survive in spite of poor records and ticket sales, the opening statement might not be a given.  Earning sponsorships is the key, and in today’s environment of communication, it could be much easier than many make it. 

Many people are bold about their allegiances now.  The use of a simple hash tag connects people miles apart to an identifying thread.  The main goal is to capitalize on this common thread by aligning yourself with your target market. 

I don’t have many numbers to support this next theory, but AT&T must be going after a younger demographic, or at the very least the passionate fan base of college sports.  There is not question that coexisting with college football is a quick way to get money, and tapping into people’s allegiances is the quick way to do it.  I am already an AT&T user, but I like what they are doing with the new “Be The Fan” Campaign.   The campaign gets people to accomplish weekly tasks using the hash tag #BeTheFan.  For example, this week, you have to send in a picture of your game day sign. This crosses all lines of communication, because no phone company owns twitter, but someone may say to his or herself, “I love what AT&T is doing in activating their sponsorship of the sport. Let’s see what else they have to offer.”  When you consider the fact that texts are free, you get a complete scope of how much money this campaign can make for AT&T. 

Hyundai has a campaign based on loyalty.  The car company refers to what different fan bases at tradition rich programs do to display their loyalty.   Then they describe what Hyundai customers do: buy another Hyundai.  This I am sure causes people to say, “Why be loyal to Hyundai?”   The car company has ranked #1 in loyalty for four straight years.  

Sunday, October 13, 2013

Generating sponsorships takes a community effort

The foundation for many athletic programs is sponsorship.  On any level, sponsorship can make or break a football program.  Most of us hear about the lucrative TV contracts that school receive, and this can make up a huge amount of an athletic department's revenue.  For smaller programs, even in the bigger conferences, there is a desperate need for more money coming in, than going out.  That sounds obviously simple, but when you consider less than half the schools in the Football Bowl Subdivision consistently turn a profit, it can help you grasp how desperate the situation really is across the board.  In previous posts, I have discussed this topic, so I will not explain too deeply here.  Most athletic programs rely on the only sport that turns a profit: college football.  The question is, "what will sponsors look for when they decide to give money".  I will use the city of Macon, GA as an example. 

I was able to attend the mayor's meeting to bring baseball back to Macon.  Odell, the designers for a possible new baseball stadium in Macon, gave a proposal at the mayor's request.  The company talked about revitalization efforts in many of the cities they had worked in, one of which was Oklahoma City.  They talked about how they were able to completely redesign a section of town to create a completely new public space, which supports peripheral traffic whether or not there is a game in town.  People may not attend the games, but their presence can provide a great atmosphere that can help that area grow.  Macon is in the process of eliminating blight throughout the city, which is why the example with Oklahoma City really stood out to me.  It is more that just placing a stadium in a city; you want something that places the city in the stadium.   

With the success of the renewed Mercer football program, this seems like a perfect time to generate sports fans in central Georgia.  In an effort to make the transition back to college football popular and profitable, many ordinances in the city had to change, such as open container laws.  On days that Mercer has a home game, there is a larger window and acceptance for drinking around downtown Macon.  The city also provides transportation between certain sites in downtown Macon and the campus of Mercer, which helps to minimize drink driving, or even drunk walking.  In this instance, the city helped create a buzz around bear football.  It encourages people to spend time in Macon, not just attend the game, especially guests for the visiting teams who may be from as far away as California.  People will talk about their experiences on road trips.  It gives the city a chance to market itself a supporter of sports programs, which is key if you want to restart a baseball franchise. 

Just to clarify this post a little, I am not supporting or objecting to any new sports programs in Macon.  However, I do want to highlight the background information for this simple fact: sponsors look at these types of items before are willing to donate funds.  They do not want to put money in a situation that will fail, or does not have much local government support, let alone public support.  One of the keys to getting money is doing the free work first.  

Friday, September 21, 2012

Oklahoma answers the Longhorn Network


            Changes in conference membership are based on many issues.  Better competition or increased enrollment and changes in NCAA divisions are usually the main reasons.  In today’s media market, a quiet deal between ESPN and the University of Texas created a separate media deal and TV rights contract enjoyed exclusively by the University of Texas.  This created issue with many programs in the conference mainly because Texas still receives a share of overall Big XII TV revenue and this new network would be viewed as an unfair advantage in recruiting.  Missouri University and Texas A&M University both left the Big XII in 2011 as a result of the conference office not really stepping in to oppose the deal.   The University of Oklahoma, on the other hand, has decided to create its own network as well.
            The Longhorn network almost destroyed the Big XII.  Even when Colorado and Nebraska departed before 2010, it was mainly due to revenue sharing from TV contracts.  Texas appeared to be the favorite child of the conference and revenues were unfairly split.  The creation of the Longhorn Network did not help in this perception since revenue goes to Texas exclusively.  In the creation of the Sooner Sports programming deal, it will not be a 24 hour network.  It instead will broadcast home games for men’s and women’s basketball and other sports.  Oklahoma already has a contract to broadcast football games with Fox, but this new programming deal includes coaching shows, pre- and post- football game shows, and can give the sooners over 1,000 hours of programming each year of the contract.  Because it is a programming deal, it can air on existing FOX channels instead of seeking its own carriers.  This is the problem with the Longhorn Network.  It could only get a contract with AT&T U-verse instead of  a provider like Cox Cable or Comcast.  Revenue terms were not disclosed. 

Tuesday, September 18, 2012

Big East TV contract lessons learned


No matter what their actual record may be, the perception of the Big East is that it is a weak conference in football.  Most TV contracts with a conference revolve around upon how well they do on the football field, but in this instance, it is the national perception.  The Big East has been hand picked by the ACC over the past few seasons, in spite of an overall winning record against the ACC.  Syracuse, Miami, Pitt, Boston College, Virginia Tech and now even Notre Dame have defected from the Big East in favor of tougher competition in all sports, but mainly football.  When negotiating a contract, you have to know your worth and the Big East rejected a 1.4 million dollar contract with ESPN, which led to the more recent defections of Pitt, West Virginia, Syracuse and even TCU.  TCU signed to join the Big East, but within a few months signed as part of the Big 12.  Now the conference has expanded as far west as Boise St and San Diego State, and as far south as Houston and Central Florida.  However, adding these teams may actually hurt chances to gain money from the previous deal with ESPN.  Its strength is in basketball, but that does not have as much TV revenue as football, and a smaller deal with more schools means less money per school.  The current contract expires in June 2013, but the Big East is hoping that expansion into San Diego and Houston TV markets will help them broker a better deal.   The league will have teams in 13 of the top 50 TV markets, so expanding to include those teams may have been a move for TV more than for competition.  What the Big East may need to consider is tapping into the needs of other networks.  FOX and NBC are expanding their sports’ coverage and seem willing to give the Big East a good deal.  ESPN deals are contingent on the quality of the product, but a deal with NBC or FOX may just rely on whether or not the product exists.  The Big East may need to forget about trying to swoon ESPN, though it includes ABC, and go for a new network.