Tuesday, December 16, 2014

Athletic Budget Update #57

Questions about how to fund athletic programs in the face of NCAA legislative changes such as cost of attendance stipends and possible legal mandates continue to grow.  As a result, there are a number of notable budgetary news items on the college athletics front, including:
The elimination of teams since NCAA governance model changes brought about "autonomy" for the Power 5 conferences is a growing focus for many athletic administrators.  UltimateSportsInsider.com will be maintaining a running summary of the lost opportunities for student athletes.  Those losses to date include - 
  1. UAB drops football, bowling and rifle - Dec 3, 2014 
  2. UNC Wilmington drops four track and cross country teams - December 8, 2014.

Friday, December 5, 2014

Athletic Budget Update #56

In 2009 a primary area for my writing was athletic budget cuts, driven in large part by the significant economic downturn that occurred in 2008.  As the economy improved and television money and conference realignment took hold, these issues became less prominent and seemed to disappear.

Unfortunately they may be returning and are at the forefront of the minds of many athletic administrators.  These concerns are driven largely by changes in the NCAA governance structure that have institutions anticipating millions of dollars in previously impermissible new expenses being planned by schools in the "Power 5".  Virtually unlimited meals, cost of attendance stipends, multiple year scholarships and a host of other expenses are poised to become "permissible" in early 2015. Further, a deregulated rules compliance landscape is providing institutions more latitude in their decision making than ever and in many cases light penalties are expected in areas with student athlete welfare implications.

A huge wake up call on the economic front is the decision by the University of Alabama Birmingham to drop three sports - football, bowling and rifle.  Obviously football is the most stunning sport to be dropped and is the first major college football program to be dropped since Pacific did so in 1995.  Further, UAB must spend millions to drop the program due to penalties they will owe to a number of institutions for failure to fulfill contracts for future contests.

As additional budget information emerges across the country, you an anticipate ultimatesportsinsider.com will share the news and commentary.  If you are interested in a reminder of what the landscape was like five years ago, here are my 55 previous posts.

Thursday, September 18, 2014

NCAA governance, autonomy and Star Wars

College athletics is awaiting the expiration of the 60 day override period that will formalize NCAA “autonomy” (a euphemism for nearly total control) for 65 schools (out of more than 350) under a new governance model.  

The NCAA’s governance structure is being changed to assuage media and legal perceptions of unfair treatment of athletes in two sports – football and basketball – and under threat that approximately 20% of the schools (those in the ACC, Big 10, Big 12, Pac 12 and SEC) might break away from the other 285 schools in Division I and form their own athletic enterprise.  

This course has been charted by the five conferences mentioned earlier and the NCAA to maximize revenue generation through conference realignment, expanded broadcast rights, new television networks and ever growing corporate sponsorship.  But their enhanced economic strength has created extensive perceptions of inequity and a legal mine field.  As I've indicated in previous writing, I believe these institutions should be able to spend their resources as they wish and need dexterity to navigate the legal landscape, but the splintering of college athletics is rapidly approaching and also believe autonomy will be a major contributor to the breakup.       

There is a sense of resignation among those that believe the NCAA’s restructuring is the wrong direction for college sports. Unfortunately, a sustained public relations campaign about the compelling rationale for more discussion has been elusive.  Simultaneously there is impatience from those who have driven the autonomy agenda to expedite the process.  The alignment of agendas and messaging in support of autonomy while ignoring contrarian views has been politically masterful and well orchestrated.  Indeed, it is hard not to be resigned or impatient (depending on your perspective) when the NCAA’s official documents outlining governance changes indicate that plans for the January 2015 NCAA Convention, should include “a celebratory kickoff event” hosted by the Board and Steering committees (see page 43 of the linked document). 

Indeed the entire scenario is one where life imitates art in two short video clips from the movie “Star Wars: Revenge of the Sith.”

In this 90 second video clip from the movie, the Emperor makes his case that “in order to insure security and continuing stability, the republic will be reorganized......for a safe and secure society!”  As the emperor makes his speech, all of those that stand in the way of total domination and changing governance are slain.  

And after the Emperor’s speech, one of the disenfranchised senators perfectly summarizes the power grab in one sentence.

As the party unfolds in Washington DC in January at the NCAA convention, I’m sure the applause will be thunderous.  T-shirts for the celebration are available here.  

For those who aren't yet ready to celebrate the new world order, October 6 is the last day for institutions to cast an override vote, extend the discussion and work towards a more equitable, rationale and fair governance structure than what is currently on the table.   

Friday, April 11, 2014

Choose your demise - drowning or nuclear weapon: NCAA governance changes inevitably lead to the same place

The numerous problems facing the NCAA today – driven by record levels of financial support and commercialization - can be traced back to 1996 when the NCAA abandoned a “one school, one vote” governance system in which each member institution had an equal voice in NCAA decision-making legislation. A February 2002 NCAA News article written by then San Diego State Director of Athletics Rick Bay outlined many of the challenges that would emerge from the current governance model. Amazingly Bay’s article states that the primary driver of the change from one school, one vote "was to placate the big conferences and keep them from bolting the NCAA and establishing their own governance structure."  While there is no question that the environment today is far more challenging than nearly twenty years ago, the same negotiation stance - what some people are referring to as the "nuclear option" - is being used to once again obtain more governance power. 

Past is prologue and the current NCAA governance proposal further expands the power of five conferences with decision-making driven by: 1) disparate resources and 2) a mission to provide ever more financial resources, championship opportunities and television exposure for their member schools.  No question there is a need to permit the conferences facing the greatest legal threats to act in their own interests.  The decision to pursue a $2000 cost of attendance stipend which was rejected by the membership (including by institutions who come from the five power conferences) and the high level political arm twisting needed to permit by a razor-thin margin multiple year scholarships is being used as evidence that these institutions need more control. But giving additional power to the same institutions responsible for the current state of affairs is incredibly ironic.

Autonomy driven by resource capabilities at the campus level is an idea whose time has come.  But blind pursuit of this goal completely distorts the NCAA as a membership organization (labeling something compromise doesn't necessarily make it so).  The requisite inter-relatedness of the 350+ Division I members around important issues such as scholarship limitations and transfer rules will suffer when dictated by five conferences who will continue the consolidation of resources and power for themselves. The current proposal to change NCAA governance facilitates this consolidation via two paths:

1) Expanding disproportionate representation. Less than 20% of the institutions will have 37% of the voting power under the new model.  Keep in mind that these institutions already have the greatest power on matters that affect all institutions.

2) Providing “autonomy” to the same 20% of institutions. Under this change the ACC, Big Ten, Big 12, PAC 12 and SEC get to do two things – establish the matters of greatest importance to them (decided from a process they already control in #1 above) and once those matters have been established, make decisions with no influence whatsoever from outside of this block of schools.

Choosing ONE of the two options above is barely palatable but one can understand why it is being sought.  Choosing both is gluttonous.  If autonomy is the desire then the categories where autonomy is important should be agreed upon and the remaining topics should return to a one school, one vote model.   If legislative power is the preferred route, then that should be adopted using a model derived from the current approach with more significantly weighted voting - not by carving out additional categories with no voice for all institutions.    

To use both models makes a mockery of any concept of NCAA shared governance (the upside is we can finally stop the “we are the NCAA” banalities) and creates a “go along to get along” model where everyone follows the dictates of the select few schools with high resources who will systematically impede the upward mobility of those who aspire to the highest competitive levels.  The choice should be between either expanded disproportional voting OR autonomy, not expanded disproportional voting AND autonomy. 

Obviously change needs to occur but it’s hard to imagine these governance changes will take us to the promised land and fend off the various legal threats facing the Association. 

Moses (you can decide who Moses is in this analogy) is parting the waters.  As soon as the schools in the five power conferences get to the other shore, the waters will return to their previous place leaving nearly 300 other institutions who are trailing behind as casualties.  No one (other than a maniac) wants to be accused of pushing the button for the nuclear option and ending it all.  Unfortunately death by drowning or death by nuclear option isn't really a choice.  But we will choose drowning - at least you can struggle and believe you have a chance of survival.  Unfortunately no one made it out of the Red Sea when the waters returned.