Running with scissors in 2012

Carol Brady, one of the great American examples of the stereotypical television mom always said, “don’t play ball in the house” (although she never actually said this in any episode of “The Brady Bunch.”)

And during the Christmas season, it’s hard to come up with a greater cautionary message than in “A Christmas Story” when Ralphie’s pursuit of an official “Red Rider” BB Gun is squashed by his mother’s concern that “you’ll shoot your eye out”. Timeless.

Running with Scissors is the name of a popular brand of wine.  It's name suggests riskiness, danger, recklessness and conjures up images of disapproving parents. Nothing good can come of it.

I hope you can look back at the past year and recognize some moments (maybe even more than a few) when you ran with scissors – took risks and went against the conventional wisdom or the safe choice and took a path less traveled. The outcome is less important than the willingness to test your boundaries.

And before we get too far into 2012 I encourage you to spend some time thinking and talking about how you can identify opportunities to take risks and grow – professionally, personally, physically, mentally, emotionally, in your faith, and with your family.  Write them down, tape them to your mirror and in 365 days, I think you will be happy you did.

All the best for a Happy New Year from UltimateSportsInsider.com.

The Unknown Future of the Longhorn Network

Months after its inception, the future of the Longhorn Network is still to be determined. As stated previously, University of Texas, Big XII and NCAA officials have an intricate process of finding out what exactly can be aired legally on the new Longhorn Network. With no ruling from the NCAA or the Big XII on the network's capabilities, the University of Texas took action in mid-July, signing a deal with Texas high school Brenham ISD (preseason ranked 7^th in Texas 4A) to play their second game of the season against Lamar Consolidated on the Longhorn Network. It should be noted that Brenham has two student-athletes committed to Texas, but also two students who are committed to Texas A&M. Despite the equal number of future Longhorns and Aggies, Big XII presidents, even Texas A&M’s President R. Bowen Loftin, continue to fear what airing high school athletics on the Longhorn Network might do to the rest of their conference and the rest of the NCAA universities. On July 20^th, Big XII commissioner Dan Beebe put a halt on Texas’ plans until “the league had a chance to meet and discuss the matter further.” This week, the Big XII established a “minimum one year moratorium on university-branded media platforms in the Big 12 broadcasting any high school content of any kind.” It seems that the Big XII will use this year to discern how the University of Texas can proceed with the Longhorn Network. Hopefully, the year moratorium will give the Big XII and the NCAA enough time to determine what is best for college athletics.

TCU's Journey to National Recognition: Next Stop, Big East

It has been three months since Texas Christian University made the announcement to become a member of the Big East beginning fall of 2012, and it has taken me almost three months to process the reasoning behind this move. While it may mean more national exposure and financial gain for the parties involved, are we moving further away from common sense thinking? Neither party, in a different college athletics landscape free of BCS ratings and automatic qualifiers, would feel the overwhelming need to align; thus it is difficult coming to grips with this latest reshuffling in college athletics.

Trying to Find an Identity

Although TCU has a proud athletic tradition, winning is still relatively new for the Horned Frogs. The football program was virtually a non-factor from the 1960’s until 1998 when winning became the norm. However, with just over a decade of consistent winning, the nation is still trying to understand where TCU athletics, particularly football, fits on the national scene. More than that, however, TCU has struggled to find an identity with old in-state rivals and new conference affiliates since the break-up of the Southwest Conference. The move to the Big East will be TCU’s fifth conference since 1996 and I am not sure this move will satisfy the long term fit that the TCU administration is hoping to find.

This move isn’t the first “have to” move to a new conference for TCU. TCU experienced its first forced move when the Southwest Conference (SWC) started splitting in 1991 after Arkansas moved to the Southeastern Conference (SEC) and in 1994 Texas, Texas A&M, Texas Tech, and Baylor announced they would join the newly created Big 12 in the fall of 1996. As a 1994 Sports Illustrated article highlighted, TCU (along with SMU, Rice, and Houston) were left out in the cold. Why? As McCallum wrote, “The hightailing Southwest Conference members exited, predictably, for the TV money, figuring they would be better off with new friends like Oklahoma, Nebraska, and Colorado instead of their old buddies.” Interestingly enough, we have learned that friendship in college athletics does not last very long, as Nebraska bolted for the Big 10 and Colorado for the Pac 10. Why? Better friends with more TV money!

TCU, along with SMU and Rice, later joined the expanded Western Athletic Conference (WAC) in the fall of 1996 with the hopes of creating a 16-team super conference that would command a major television contract. However, the conference design of “success in numbers” did not develop and the 16 members were quickly chopped in half when eight schools (Colorado State, Utah, BYU, Air Force, New Mexico, UNLV, Wyoming and San Diego State) left the WAC to begin the Mountain West Conference. Tom Dienhart and Mike Huguenin highlighted specific problems associated with the breakup of the WAC in an article that appeared in The Sporting News in June of 1998. Three specific problems are listed in the article: 1). Scheduling: the divisional rotation and the confusion created by separating teams into divisions, limiting rivalries and any consistency in scheduling. 2). Travel: expensive and time consuming for both schools and fans. 3). Revenue sharing: Dividing revenue, among 16 teams, especially those that were not winning, was very difficult. Interestingly enough, one of the schools not winning at the time was TCU – (1996: 4-7; 1997: 1-10). Thus, when the eight schools decided to leave the WAC and create the Mountain West Conference, TCU was not invited, once again leaving them to wonder about their athletic future.

Two years later, TCU was extended membership to Conference USA; this time, moving with Rice and reuniting with the University of Houston, but leaving long-time rival SMU behind in the WAC. The move to the third conference was supposed to create a national football identity with schools that offered stronger competition. Administrators announced at the time that the move to Conference USA was in the best interest of TCU. In an article published in the TCU Daily Skiff in the October 12, 1999 issue, Chancellor Michael R. Ferrari wrote, “The decision to join C-USA was made after considering the long-term strength and promise of this league at the national level. We have stated on numerous occasions TCU's goal of becoming a nationally recognized and respected athletic program at the Division I level. Joining C-USA is consistent with that goal."

Similar to the 16 team model of the WAC, C-USA decided to try and join the more prominent conference by using the more teams, more success approach. However, similar to the WAC, Conference USA could not provide the national recognition or long-term strength that TCU was ultimately looking for, especially when Marquette, Louisville, Cincinnati, DePaul and South Florida left for the Big East. Left with a different type of conference, administrators again scrambled to join a more stable conference and in 2004 made the decision to join the Mountain West Conference, with the schools that only 6 years earlier did not extend membership to TCU. In a 2004 Fort Worth Telegram article, reporter Damien Pierce wrote that this move would, “end months of speculation about TCU's athletic future and solidify a place for the Horned Frogs in a major conference.” In response to why TCU was added, MWC Commissioner Craig Thompson stated:

TCU is a fine academic institution that boasts a highly-competitive athletic program and possesses long-standing tradition. TCU's mission and values are also a solid fit with the collective and individual philosophies of the Mountain West Conference and its member institutions. More specifically, TCU's addition will enhance the MWC by:
• Bringing additional depth and competitive strength to virtually every one of the MWC's 19 championship sports.
• Balancing the annual football schedule, so that each member will have four home and four away conference games each year.
• Adding the nation's seventh-largest television market to the MWC footprint.
• Contributing the Plains Capital Fort Worth Bowl to the MWC's bowl line-up.
• Expanding the MWC's recruiting base as 10-13 percent of current football and men's basketball student-athletes hail from Texas.

Certainly all of these factors are a major reason why a conference would be interested in TCU, including the Big East. However, one very important factor that did not make Commissioner Thompson’s list was that TCU football was no longer the bottom feeder of the conference. TCU, at the time, just finished their second season in the Top 25 (2002: 10-2 and a final ranking of #23; 2003: 11-2 and a final ranking of #24). One of the major differences between 1998 and 2004 was that TCU football started to have success. TCU, of course, jumped at the opportunity to join the MWC and a chance at more television money, which later came in the form of a new 2006 television deal between the MWC and CSTV.

The Move to the Big East

This historical progression brings us to the present day conference shift. TCU will join the Big East as its 17th member and currently its strongest football member. Time will tell if the move works for both the Big East and TCU, but examining conference realignment from TCU’s historical perspective, the move to the Big East does not appear to be the long term solution for either TCU or the Big East. Some prominent issues that have plagued TCU’s past appear to be present with the new move to the Big East:

1. The mega conference model does not work: Once conferences get as high as 13+ members, the size of the league creates issues that become too complex. The exception to this rule has been the Big East, but most “experts” agree that the Big East is still a prime picking ground for another conference to come calling if expansion remains the move of the day. Similar to the problems that plagued the WAC and C-USA, factors such as greed, logistics, and a lukewarm response from alumni and fans have doomed “the more schools more success” model of conference realignment. Using TCU’s own history emphasizes the reasons why the mega-conference has not worked:

Greed: If the past is any indicator, schools that have football success get upset when they have to share revenue with conference members that are not competitive, and thus are a financial burden. It also hurts the schools chances of improving their BCS status in football and RPI standings in other sports if their conference schedule is filled with schools that are not competitive.

Logistically, it is difficult to travel across the country to play conference games. The two current defenses of TCU’s move to the Big East are that it is similar or perhaps a little bit easier to travel in the Big East than in the Mountain West. That may be true, but just because it is better, does not make it ideal. Travel, and other logistics, makes this a very difficult issue. Travel for TCU remains expensive and incredibly time consuming throughout the entire athletic season, not just in football. If TCU is offered an opportunity at a BCS conference with closer ties to Fort Worth, in a few years, than they will likely leave the Big East in a New York minute. As TCU has shown in the past, it is not afraid to jump conferences for a better opportunity.

TCU has drawn well recently, but historically attendance at TCU home games had been down since leaving the SWC. There should be major concern about fan attendance if TCU football drops out of national championship contention. Are fans in Fort Worth going to remain loyal to a TCU team that could have 2-3 losses and be playing for a second-tier bowl game? TCU’s current run of football success is incredible and one would have to assume that this success may not continue at this level. Based on the recent past, TCU’s alumni and fans did not always respond in the early 2000’s when the team was having good, but not great success. Also consider that the conference schedule did not excite their fans base; but how could it, since there has been no consistency in home date opponents since playing against the Texas schools in the SWC. TCU’s conference “rivals” have changed so many times that fans have not had time to develop any passion for a traditional opponent. It is also important to note that the visiting conference members are typically not sending many fans to TCU because of the distance, thus eliminating any geographic benefits.

2. Conference membership does not equal loyalty and therefore you would have to assume that conference realignment is not over. The move of adding TCU may save the Big East for this BCS evaluation period, but it will not guarantee Automatic Qualifier (AQ) status in the long term unless the other football playing members of the Big East can earn respectable non-conference wins and be consistently ranked in the Top 25. The logical thinking is that TCU will remain a top football school and other Big East schools will have to improve their programs to be competitive. However, it is possible (as Nate Silver points out in his blog post for the New York Times) that TCU could become mediocre in football. Average results in football and what is anticipated as virtually no benefit to Big East basketball and other Big East members might find that sending their teams to Fort Worth is not so rewarding. Depending on the football success of schools over the next 5-7 years, the Big East could once again see a defection of schools that are looking for greener pastures, including but not limited to, TCU.

3. The TCU - Big East relationship is flawed. You have to give credit to the Big East, because they have managed to stay relevant in the BCS. The problem is the Big East Conference’s status as an Automatic Qualifier is being challenged by other conferences, (the Mountain West) and more importantly by public perception. The only way to fix this is for members to win big games, including TCU. TCU will now have to carry the torch, so to speak, for all the Big East members, but what happens if they lose? Does a TCU football team with 2 or 3 loses benefit the Big East? Probably not. The first few years of this relationship could determine the long term future of TCU as a Big East member.

Perhaps the biggest problem with the TCU-Big East relationship is TCU is essentially being asked to “save” a conference that has issues too big for one member to solve. A long standing issue has been the conference operating under the dichotomous relationship of being loyal to the past (a history of strong private basketball playing schools) and committing to the promise of the future (building strong revenue generating football programs). This creates underlying problems starting with the number of schools that do not play football at the FBS level and yet benefit greatly from FBS football playing conference members. It still creates challenges at member institutions to perhaps spend above their financial means to remain competitive. Specifically, consider the current decision that Villanova has to make or remember that schools like DePaul, Seton Hall and Providence are asked to compete financially with the likes of Notre Dame and state schools like UConn and West Virginia, and you quickly realize the unique challenges of the Big East. Now add into the mix TCU (a 17th member with a history of changing conferences), and the overwhelming expectations that the Horned Frogs’ football program will legitimize the Big East and you quickly realize the fragility of this relationship. Under these circumstances, one would have to assume that one or more of these issues will rise to the top and the Big East will see changes over the next 5 years.

4. The BCS is flawed. The biggest injustice of the college football system is not the idea of the bowl games versus a playoff, but rather the Automatic Qualifier status. I understand the argument of a playoff but the AQ status is absurd based on the thought that you are denying a team, such as TCU, the opportunity to play in a relevant bowl game. In April 2010, the BCS Group released their formula for deciding if another conference(s) should be added to the AQ status starting in 2012. For a seventh conference to even get consideration for the AQ status for 2012-2013, the BCS committee will review conference results from 2008-2011. As stated on the Bowl Championship Series website, “results from the 2008, 2009, 2010 and 2011 regular seasons will be evaluated to determine whether a seventh conference earns automatic qualification for the 2012-13 and 2013-14 bowl games.” Essentially, the success of a school’s football season is in part determined by a formula that measures how conference members played as many as 4 years ago. The bottom line is that the success of a conference in the past should not determine the ability of a team in the current year to play in a bowl game (nor should a team benefit from conference history). The current set-up encourages short-sighted conference moves, such as the one by TCU to the Big East, in order to have a chance at a BCS game.

After almost 3 months of analysis my conclusion is this…I don’t blame TCU and the Big East for joining forces. Both are in near impossible situations to remain part of (the Big East) or get more of (TCU) the BCS dollars. I have come to believe that a school like TCU with a well respected athletic program and strong academics should not have to continue to try and “fit in” to the college athletic landscape because voting members do not feel they are worthy. Administrators should not feel like they must send student-athletes across the country to play conference games in order to get national recognition. Rather than praising a school like TCU for its academic and athletic success, critics of college athletics can point to TCU as the next school to join the highest level of the Arms Race. Shouldn’t TCU be able to enjoy its current run of success and not have to make an awkward move to the Big East? Remember, TCU just beat Wisconsin in the Rose Bowl – it may not get any better than that! Likewise, the Big East conference should not have to search out and add the current “hot football team” in order to survive in college athletics. Athletics is cyclical and the hot team 10 years from now may not be TCU but perhaps another upstart in college football ready to jump into the Arms Race. Maybe even a future BCS football playing member, like Villanova? At the end of the day, the decision for TCU to join the Big East might make “cents”, but it just does not make sense. From a bigger picture perspective, the move has brought attention to the imperfections of both TCU and the Big East, as well as the flaws of the current college athletic system and how the system has devalued both entities.

The Future of the Longhorn Network

Now that the ink on the University of Texas’ new 20-year, $300 million Longhorn Network has dried, it is time for the NCAA to revamp their rulebook in an effort to ensure the playing field of college athletics is still even. Texas’ new contract allows them to air some high school events, which is enough to make other schools question whether Texas is receiving an unfair advantage. Will prospective high school players be glorified on the new network? Will the teams of prospective student-athletes be covered more closely? Is this fair recruiting? Can other universities do the same thing? Clearly, the NCAA has some work to do, and quickly. In the next 20 years, Longhorn Network will test the boundaries of the NCAA rule book by voyaging into uncharted waters. In the near future, however, Texas and the NCAA will begin the intricate process of examining what is legal under the network.

Pac 10 Faces Both Revenue and Expense Pressure

With his recent decision to suspend Tennessee Head Men’s Basketball Coach Bruce Pearl eight games, Southeastern Commissioner Mike Slive demonstrated once again why he might have the most powerful job in college athletics. We would be remiss though not to include Jim Delaney, Commissioner of the Big 10, as a part of any conversation about power and college athletics; even Big 12 Conference Commissioner Dan Beebe, who has survived a tough fall, would still have a seat at the table of any major decisions in college athletics. Let’s not forget, though, their counterpart to the West, Pac-10 Conference Commissioner Larry Scott, who in just over a year on the job has positioned his conference as a major player in conference realignment, recreated a brand that was in need of a transformation, and now appears to have set up the Conference for a major television rights deal. The question is can Commissioner Scott not only generate new revenues, but create an environment of fiscal responsibility among future Pac 12 members? These days both sides of the equation must be met for him to be considered among the most powerful people in college sports. This is no simple task, however, because his efforts to move the Conference forward and restore the Pac-10, has been slowed by a number of recent challenges.

In Scott’s short time at the Pac-10 he has witnessed one of its most powerful members, USC, get knocked around by the NCAA, the dream of a super conference Pac-16 get temporarily shelved and reestablished as the Pac-12, and the University of California drop athletic programs. Perhaps no one in intercollegiate athletics is dealing with the volatility of the industry more than Larry Scott. With the Pac 10’s past accomplishments and the current football success of the University of Oregon it is easy to become very optimistic about the prospect of making the future Pac 12 a nationally known brand. Certainly the idea of a strong, vibrant conference with incredible financial potential is possible. Nonetheless, not all may see the addition of Utah and Colorado as beneficial but rather as a compromise to the failed attempt to add six Big 12 schools. In fact, when taking a closer look at the Pac 12 Conference, it appears that many schools are state universities struggling to overcome major budget deficits. Thus, it might be wise to hold off on our judgment of Mr. Scott and his place among the heavy hitters in college athletics until we see how he and the conference members handle the potential financial windfall.

Judgment of his vision of the new Pac 12 should not be based merely on the ability to market a new brand in order to increase television revenue but on how the additional television revenue will be spent. More specifically, a positive rating for the Pac 10 Commissioner should be given when the new monies obtained help the budgets of its poorest members and possibly create a new level of financial efficiency in college athletics. A closer look at the issues of the Pac 10 membership indicates that the members are collectively headed to a financial crossroads and are in need of strong leaderships at the institutional and conference levels.

The Television Deal

The television deal is obviously very important and has the opportunity to be extremely lucrative. Recently, Bruce Pascoe of the Arizona Daily Star provided projections by Navigate Marketing of Chicago that suggested if the Pac 12 incorporated a television media rights model similar to the Big 10, revenue could be as high as $172 million dollars, more than triple what the conference earns now.

A new television deal, along with the new conference split and the promise of shared television revenue, should help schools such as Washington State, Arizona and Arizona State, with a major boost to the athletic department revenue. Ideally, these decisions would put all of the Pac 12 schools in a stronger financial position. However, television revenue sharing cannot be the only solution to digging the membership out of financial debt. A collective attitude change toward financial spending needs to happen, and now presents a perfect opportunity.

Back to the Future (2006)

Television money, although getting much recent media attention because of the major jump in revenue, is not new found money. In 2006 the Pac 10 signed a 6 year contract that pays the conference $125 million for football and $52.5 million for basketball from ABC/ESPN and $97 million from Fox for football. At the time, this was a television deal that was certainly competitive and should have helped the conference membership with a much needed revenue boost. Yet, during this time period expenses have increased at a rapid rate and many schools in the Pac 10 have not been able to operate in the black. A quick reaction might be to blame the recent recession; and although that has had a major impact on college athletics, it is not the sole problem. The major problem that has been consistent in college athletics is that as schools bring in more, administrators spend more. The Chronicle of Higher Education’s Libby Sander's blog entry addresses the long history of athletic departments’ pattern of using new revenue sources to bail programs out of a financial deficit, rather than adding to a financial surplus. In the article, Bob De Carolis, Athletic Director at Oregon State, highlights this point by saying, “I got in this business in 1979. Cost containment was on the table then, and it’s on the table again [now]…Every four or five years,” he said, “we [athletic departments] find some sort of revenue nugget that helps us.” In this case, the nugget appears to be television revenue.

Around the same time the Pac 10 was signing the current television deal, an interesting and still relevant article appeared in the August 2006 CFO Magazine. The article discusses the business habits of athletic directors and quotes Iowa State's Athletic Director Jamie Pollard about the environment in which decisions are made:

"In college sports, the bottom line is a championship, and everyone else goes home unhappy." He says this drives athletic departments to spend everything they can to further that goal. "They could stand up and say, 'This is insane, I'm going to stop it,' but they would get fired." College ADs are under pressure to do everything they can within the rules to win, says Pollard, including spending all of their resources. Anything less means they didn't try hard enough.

Spending all of the resources to remain competitive would explain how Pac 10 programs find themselves in the current financial deficit. Take for example two Pac 10 programs, the University of Washington and University of California at Berkeley, were listed in the 2006 CFO Magazine article as 2 of the least profitable athletic departments in the country (Washington was running at a deficit of $2.2 million, and Cal had almost an $8 million deficit). Over the last 5+ years, many Pac 10 schools, including Washington and Cal, have not been able to take advantage of increased revenue earned via television contracts, BCS Bowl payouts, and other additional sources of revenue, and thus, remain in debt.

Still in Debt

The end result is that the past Pac 10 television deals, although not as lucrative as a new Pac 12 deal, did not create a financial surplus for most members. In August, Jon Wilner of the San Jose Mercury outlined the necessity of increasing additional revenue through a new media rights deal in order to support struggling athletic departments’ budgets. He states that the additional dollars from a new television deal could bring much needed revenue to the Olympic sports and stabilize the growing debt. Wilner writes, “That windfall, while generated by the football programs, won’t be used specifically for the football programs. Rather, it will bolster ailing athletic department budgets and preserve that which the conference holds near and dear to its heart: the so-called Olympic sports.”

Skeptics might find it hard to believe that the additional monies would go toward digging out Olympic sports. Assuming that a television deal does happens and schools are able to increase revenue, it is likely that expenses at each school will increase just as quick, if not quicker. The bottom line is that although the television deal would be a significant increase, it will still leave a revenue shortfall when compared to other BCS conference television deals such as the Big Ten or SEC. One would have to assume that the conference expansion and the ongoing arms race is going to cause all Pac-10 schools to spend more than what they currently have, especially when competing for BCS Championships. Washington athletic director Scott Woodward summed up this thought in the Wilner article by saying:

“We cannot compete with the Big Ten and the SEC if we don’t close that gap. We cannot afford to pay top coaches, or build facilities. All this emphasis on souping up our brand — it’s all about staying competitive.”

Interestingly enough, it sounds like the anticipated television money is already earmarked for increasing coaches’ salaries and building new facilities. Recent history suggests that additional dollars generated have not gone to reducing the debt of the Olympic sports, but rather to increasing budgets of the potentially profitable sports, football and men’s basketball. Supporting the revenue generating sports such as football and men’s basketball only makes financial sense, as Woodward states, in order to stay competitive. From a broader athletic departmental point of view, the majority of the Pac-10 schools have struggled financially to maintain the heavy burden of the arms race in football and basketball, in addition to the growing expenses in other nonrevenue Olympic sports. Even if additional monies come into the department, there will most likely still be a financial shortfall at many Pac 12 schools, unless major financial restraint is implemented or athletic departments continue to rely on state money to reduce annual debts. This thought may explain why the Chancellor’s Committee on Intercollegiate Athletics at Cal Berkeley made such drastic decisions.

Chancellor’s Committee on Intercollegiate Athletics

The Chancellor’s Committee on Intercollegiate Athletics chose to eliminate sports and put a limit on future institutional dollars used to support athletics, rather than wait for the television pot of gold that appears to be coming to Berkeley and other Pac 12 campuses. The reality is that Cal, like many other schools, has been at these crossroads before, as recently as 2006. Increased dollars from a new and exciting revenue source, especially a source as public as television revenue, typically will raise expectations of success at these campuses, forcing an increase in expenses to keep up with the Arms Race, only to realize later that the department has far outspent revenues.

Examining the Report of the Chancellor’s Committee on Intercollegiate Athletics, the decision to become more fiscally responsible by cutting sports, placing a limit on future institutional dollars, and holding the Chancellor and athletic director personally responsible is unprecedented, considering all of the recent publicity highlighting the future revenue that is just around the corner. These cuts may indicate the only realistic decision for Cal if they hope to remain competitive in football, basketball and what is left of the prestigious Olympic programs. The members of the Committee made a clear decision not to wait for the anticipated television revenue to address the financial debt, because they do not believe it will address the problem.

The report states:

“However, notwithstanding the possibility of substantial new revenues beginning in 2013, we note that the general upward pressure on costs, the scope of the program, and the increased operating costs of the retrofitted and improved stadium (estimated at an additional $2.4M) will result in a significant short- and probably intermediate gap between costs and revenues. Indeed, an expanded Pac 10 could lead to increases in travel costs, as well as further fuel for the arms race, discussed below; the rumored division into North and South groups could also make ticket revenues more volatile.” (p.4)

The report also indicates that the financial problems of the athletic department should not be solved with the continued reliance on student fees and institutional dollars. One very important solution the Committee provides, among others, is a very specific order calling for “Chancellorial leadership in the Pac 10 and NCAA.” Specifically, the Committee is calling on University of California at Berkeley Chancellor Birgeneau to assume a major leadership position not just on campus, but within the Conference and even within the NCAA to reduce spending. However, rather than ask Chancellor Birgeneau to be a part of change, the Committee wants him to lead the change, even if it means he would act alone.

“Chancellor Birgeneau can and must be the first move in an attempt to slow athletics spending. He is exceptionally well-positioned to do so, first, because of the national leadership for which he is so well recognized; second, because of his membership on the Executive Committee of the Pac 10; and third, because he has already, through appointing this Council, taken significant steps to unite his local constituencies behind him.” (p.11)

But Cal is not the only Pac-10 school that is facing financial scrutiny, perhaps just the most recent and public. Arizona State athletics is also facing a multi-million dollar deficit. The University of Oregon’s expenses are rapidly increasing and Oregon State was close to $6 million dollars in debt. Washington State athletics, operating with the smallest athletic budget in the conference, is falling further behind the larger budgets in the Pac 10 and the University of Washington athletics made adjustments to respond to the massive state cuts.

Fast forward to 2015 and perhaps we will be able to read about how the Pac 12 Conference television revenue and the fiscal responsibilities of leaders such as Chancellor Birgeneau and Larry Scott allowed the Pac 12 to become a model of good business practices. At that point, maybe we will read articles labeling Larry Scott as the most powerful man in college athletics, not because he negotiated the largest television contract but because he directed the Pac 12 Conference into financial security.


This posting was authored by Tony Weaver, Assistant Professor of Sport and Event Management at Elon University. Tony has agreed to occasionally provide research summaries. Prior to teaching at Elon, Dr. Weaver was an athletic administrator at Iona College, Siena College and the University of North Carolina at Greensboro.

Refocusing on Financial Restraint

After a summer of reading about the potential revenue generated by conference realignment, and watching school after school negotiate behind the backs of their current conference members one realizes how quickly agendas change in college athletics. Most recently, BYU added to the chaos by declaring its football independence and becoming a member of the West Coast Conference in all other sports. It was less than two years ago that many in higher education, including college athletics, preached about the impact of economic recessions and restraint on spending. Yet, attention to cost cutting measures has been trumped by the appeal of bigger and better conferences and chasing revenue.

Perhaps the most recent report by Daniel Fulks will remind us yet again that Division I schools are spending more in an effort to maintain even higher athletic standards, in particular relying on institutional dollars to support growing budgets. The response by some schools has been to pursue larger revenue streams through television, sponsorship and fundraising, rather than remain focused on where to cut. However, the issue of financial sustainability still remains a large problem for most Division I athletic programs due to the fact that the revenue just cannot keep up with expenses. In an effort to not just restate the problems, a dedicated focus on practical, cost cutting solutions appears to be needed. Some of these solutions below have been implemented by athletic departments across the country and rightfully deserve more attention.

Gather More Information

As discussed in a previous USI post, the issue of transparency will remain at the forefront of college presidents and the NCAA office. In the past, many believed that college athletics has operated in an environment of “secrecy”, even to the point where those working in the industry can be unaware of the financial decisions of their NCAA competitors. Over the last year, Winthrop Intelligence has provided a solution to athletic departments across the country by creating several online databases filled with accurate and timely data specific to Division I athletic programs. Why is this important? Athletic departments can use these data to make sound financial decisions, perhaps saving thousands of dollars on decisions related to coaching contracts, game guarantees, and sponsorship rights. The provision of usable data to athletic directors without the need for wasting time and energy trying to gather old data could be a lifesaver for athletic departments. An article in Athletic Business highlighted one example of a Pac-10 school saving $50,000 on a potential game guarantee. Perhaps even more beneficial is the fact that the database allows a user to not only compare financial data, but go deep into the contracts of coaches, administrators, sponsorship agreements, and game contracts to pull out the details of multi-million dollar decisions. Putting good data in the hands of the athletic director provides much needed leverage for better financial decisions.

Other opportunities also exist for the NCAA and athletic departments to continue gathering data by relying on the expertise of scholars to provide analysis, including financial analysis. The financial reports generated by Dr. Fulks has brought several issues to the forefront and allowed professionals to gain a more comprehensive financial picture of Division I athletics; kudos to the NCAA and Dr. Fulks for their on-going work. NCAA research staff members Todd Petr and Thomas Paskus wrote in an article appearing in the Journal of Intercollegiate Sport, "The study of intercollegiate sport is a discipline that would likely benefit substantially from an enhanced commitment to sharing research data." Similar to the business plan of Winthrop Intelligence, these data need to get to the hands of the decision makers.

Let the "Haves" Go…They Can Always Raise More Money

If nothing else, conference realignment and the additional information from the Fulks report has taught us that more schools are in the “have-not” group than perhaps the public may have imagined. As the Big 12 started to break-up, reports surfaced that suggested schools like Kansas, Kansas State and Missouri, were going to be left out because of limited football revenue potential. Imagine a school like Kansas, a major Division I brand, being labeled as “not good enough” or a "have-not".

That label, in higher education and particularly in college athletics, can be devastating. Avoiding membership into that category can be a great motivator to administrators, coaches, players, and fans. Just last week supporters at Boise State were asked to dig deeper into their pockets for a new football stadium in order to maintain their position in the Top 25 and avoid the future descent back into mediocrity. Chadd Cripe details Boise State's impressive rise to become one of the best football programs in the country. But, according to the administration, Boise State still falls short financially and thus the request for donations. Is it reasonable to think that donors can support the school’s ambitious future? Is it possible that the donors of Boise State could come together and build a stadium? Sure, but at what point does the well run dry? Financially, the donor base at most Division I schools cannot maintain the pace set by athletic funds at schools like Alabama, Florida and Texas, which annually could bring in close to $15-30 million more than a school like Boise State. The disparity in philanthropic giving to athletics is staggering and one that is very difficult to overcome, and for some reason continues to escape the attention of the public. Maybe it is time to let schools whose donors can consistently raise well over $30,000,000 annually for athletics run free.

Conference Mandates

In July 2009, Boston College athletics director Gene DeFilippo and former Arizona athletics director Jim Livengood stated that "the only way to slow down the arms race in college sports is to do it through NCAA mandated change." However, what major financial changes have been made in that time? Rather than waiting on the NCAA, conferences need to continue cost cutting measures. Conferences offer a manageable number of schools with similar profiles and thus could be the most realistic place where financial control can take place. Asking individual schools to take the lead on spending restrictions could be placing athletic directors and coaches at an unfair competitive advantage, which could cost employees their jobs. The reality is most athletic administrators or coaches are not going to sacrifice something that their competitors still have. This environment has created a helplessness that has made its way to college presidents who have stated that they are limited in their cost controlling role. Ironically, it appears that some presidents are right in the middle of the conference realignment chaos, which could raise more questions about their “powerlessness”.

Alone, financial restraint appears impossible, however as a group, perhaps financial control could become possible. It is true that conferences may be put at a disadvantage against other conference schools but the bottom line is that financial restraint needs to happen. Over the past year, conferences have discussed, and in some cases implemented, simple cost cutting measures such as hotel stays for home games, media days, size of coaching staffs and tournament participation and NCAA gifts. These changes, if implemented need to remain; if they are being discussed, they need to be implemented.


Financial Responsibility Includes All Departments, All Programs

Frequently the media and the general public focus on the financial data of prominent sports such as football and men's basketball, the perceived cash cows. But all Division I programs, revenue and non-revenue sports, men's and women's, need to be added to the conversation of financial responsibility. At this point, we have too many Division I teams that just cost too much, including basketball and football programs (see recent moves such as the University of New Orleans and Centenary College, reclassification to Division III, as well as Northeastern and Hofstra football programs). Although it would be an unpopular move to reclassify to a lower level division or cut programs or scholarships (legal issues could also arise), it may be a necessity. In a time when tuition continues to rise at a rapid rate and student fees continue to be tapped, a reexamination of all programs (as well as the mandatory Division I requirement for sponsoring 14 sports) needs to be put on the table.

Based on the current financial model used by Division I schools (relying on, at best, 2-3 programs generating money, while the other 12+ programs lose money) the pursuit of a sustainable budget is nearly impossible. At some point, schools will just not be able to keep up - maybe now is that point. As Dennis Dodd reminded us last year, "It [the business model] works at Ohio State and Texas. It doesn't at New Mexico State, Florida International and most everywhere else."

Even through all of the glamour of conference realignment, most Division I schools and conferences need to remain focused on reducing expenses, spending wisely and establishing long term projects that are grounded in good financial security. Although the article does not establish any groundbreaking ideas, it can serve as a gentle reminder that the goal of economic stability for most remains on the expense side.




This posting was authored by Tony Weaver, Assistant Professor of Sport and Event Management at Elon University. Tony has agreed to occasionally provide research summaries. Prior to teaching at Elon, Dr. Weaver was an athletic administrator at Iona College, Siena College and the University of North Carolina at Greensboro.