Follow the Money: Voices of Reason Around the Web

In searching the blogosphere for the latest developments in the sports world, it seems that many bloggers echo my concerns about the financial situation of college athletics programs. I find it important to seek out and engage different sources of information because in the digital age opinions are plentiful, and while there may be common ground between them, no two are ever the same. In my search it quickly became apparent that the two widespread sources of concern are the state of athletics budgets given the current fragility of the economy, and the financial controversies involving student-athletes that consistently capture national headlines. The first post I will examine this week is by Connor Ennis, a copy editor of the sports section for the New York Times, and is titled “A Question About Calhoun’s Salary.” Connor brings attention to comments made by University of Connecticut men’s basketball head coach Jim Calhoun about his salary as the highest paid state employee in a state facing a budget deficit. I will also challenge some of the assumptions and address some of the questions raised by a blogger for The National Sports and Entertainment Law Society in the post “Does Age Matter?” In this post the author addresses both the NBA age limit and differing theories on compensation for student-athletes. For convenience I have posted these responses here, as well as at the respective blogs.



“A Question About Calhoun’s Salary”

I am glad someone else in the blogosphere is perplexed by the large sums being invested in athletics programs by state institutions that are facing a budget shortfall. Jim Calhoun argues with the reporter to “get some facts,” but these facts show that Calhoun is playing with fuzzy numbers. The state of Connecticut is facing a budget shortfall of over $900 million this year, and could top $8 billion over the next two (see chart on left for a budget breakdown). If the state is forced to reduce the number of teachers, then the students who attend school to receive an education, not audition for a professional athletics contract, will suffer. This is especially pressing in a state where more than half of students enrolled in 4-year public colleges have not graduated within six years. Calhoun argues that his team and its success, which presumably he plays a rather large part in, helps bring in a profit of $12 million for the university. But recent athletics budget reports show that while this helps support athletic programs, the university still contributes a net of $2 million to the athletic department annually to help cover all the expenses. This number is subject to the 3.5% budget cut the university is enacting in response to a $9 million reduction in state funding. Adding to this is the fact that coaches’ salaries constitute nearly 40% of athletic department expenses. I think this makes it clear that it would be very beneficial if coaches voluntarily cut their pay to help the university.

What is even more disturbing is Calhoun’s lack of sympathy for the hardships that individuals around the state of Connecticut and the nation are facing. His behavior brings to mind awful memories of Latrell Sprewell’s contract complaints when he felt that $14 million was not an adequate sum of money to adequately take care of his family. Calhoun’s statements also reflect that he is in effect hoarding his money, saving it for his retirement, rather than using it to the benefit the economy by spending more disposable income. I am curious to see what your opinion is on this issue. Do you feel that this backlash is warranted against programs with spending that can be deemed reckless in the face of the economic crisis? I think this situation epitomizes the problem in college athletics today, but I am curious to about what you think? Is this a problem? What do you think the future holds?



“Does Age Matter?”

One important aspect of OJ Mayo’s career that you overlook is that he was 20 years old during his time at USC. His “advanced” age gave him a physical and mental advantage compared to other freshman players. He must have also carried the concern that delaying the start of his NBA career would have put him at a disadvantage against players who were younger and shared the same amount of college experience. But for individuals who would enter the NBA directly out of high school, the college experience provides an intermediate step in terms of skill and the demands of increasing exposure. Only the MLB minor league system offers a similar experience where the demand is increased gradually, and thus it protects itself against issues that an age limit would counter. I would argue therefore, that the age limit is simply an insurance policy for the teams that would dole out millions of dollars on otherwise unproven talent. But perhaps for OJ and other players of his ilk, the most important consideration was the one I address below.

The second issue you raise in this post is the question of payments to student-athletes, something that has been going on under the table for years, but has seen increased exposure given the recent scandals you mention. The increased exposure the players get in college is good for all the parties involved, and there is no reason the players shouldn’t see a profit as a result. The players themselves are rewarded through greater endorsement deals and an established, dedicated fan base that they carry throughout their pro careers. For the colleges this means increased interest, which results in greater ticket sales and a large boost in merchandise sales. The NBA teams that draft highly developed players, both in terms of talent and marketability, see a similar boost in their bottom line as a result. Allowing players to leave for teams overseas only serves to diminish their earning potential. It would seem that the current rules are not realistically enforceable as the number of cases that slip by the radar is becoming more and more apparent. Obviously allowing players to be paid would result in an imbalance between those programs that see a profit and those that do not. Keeping that in mind, do you support college athletes being rewarded above and beyond covering their expenses (including ones not currently covered by scholarships)? In effect aren’t schools already “purchasing” players through the construction of better facilities, and more expensive student-athlete support programs? Where should the line be placed between what is considered legal aid and what is considered a breach of rules or ethics?

Big Spenders: College Sports Programs Need to Trim the Fat

As a student at the University of Southern California, I enjoy the tremendous success of the numerous athletic programs. I am able to attend games in venues that bear the names generous donors who have made the multitude of staff and training centers a reality. It almost seems like the athletic department has been given a blank check with the expressed purpose of creating the most competitive and successful college sports program in the nation. Yet at the same time the nation and the world are suffering through one of the worst financial crises in recent history, if not all time. The conflict arises when these two worlds collide and college athletic programs are not longer sheltered from the demands and unfortunate events of the larger economic system. With a large part colleges’ reputations deriving from the relative success of their performance on the court rather than in the classroom, a culture arose that rewarded reckless spending. This problem has manifested itself in a number of ways, especially in the hyper inflated budgets of top college sports programs, the financial structure that rewards investments in athletics over academics, and the growing disparity between top-tier and lesser athletic programs. I will unpack these different issues and show the possibilities for change that must occur in order for college athletics programs to attain stability and increase their aid to their educational institutions.

What is becoming increasingly obvious is that schools no longer have the ability to spend without limits the way they might have been able to in the past. Some schools have started to break bad habits and are taking measures to reduce their athletic program’s budgets, even if the decrease is not representative of a large percentage of the budget. The University of Miami Hurricanes football team decided to travel by bus to two in-state games next season. This move will save the university $140,000 of their annual athletic department budget of $60 million. This action is especially important given their decision to slash football season ticket prices in an effort to maintain and expand their fan base despite the tumultuous economy. Ultimately it shows an understanding that the economics of college athletics have to change, and to cope with reduced revenue from lower consumer spending athletic budgets that were once sky high must be grounded. What it also reflects is a new endeavor to move beyond the achievement and fall in line with the more modest tone established by leaders like Barack Obama. Even worse perhaps is that Stanford University spent $100 million renovating its football stadium, has enjoyed an increase in the program’s success, yet finds attendance and thus revenue dropping sharply. What both these examples reflect is the inflated budgets of athletics programs, especially at major institutions, and the reality of their value to the schools and the community that support them. These programs were driven to adopt an attitude of unceasing growth backed by funding that no longer exists in the quantities necessary to sustain this outlook.

More troubling is the fact that college athletics maintain a tax-exempt status, and that donations to the programs are tax deductible. The current law allows 80% of donations made to receive premium seating and 100% of all other donations to college athletic programs to be deducted. The National Collegiate Athletic Association (NCAA) reported that in 2004-2005 major college athletic programs received a total of $845 million from boosters. The Chronicle of Higher Education found this number to be $1.2 billion from 2006-2007, and found this increase came at the expense of academic donations. One of the best ways to promote recovery during an economic downturn is to tax the wealthiest citizens and use that money to generate new opportunities for the less fortunate members of the economy. A simple solution would be to tax donations above a certain amount, or simply remove protections for deductions where the individual receives a tangible benefit for their charity, such as mandatory donations for the right to purchase premium tickets. This issue seems even more pressing as more students are struggling to secure the financial aid necessary to continue their education. This would in effect supplement the funds the federal government is injecting into the economy and could be targeted towards the individuals and communities that colleges and universities are struggling to serve.

So the question now becomes one of solutions, the need presents itself to find ways to counteract the effects economic downturn and years of bad habits. Given that this money being given to schools, even those that receive aid from the state and federal government, will not be available as tax revenue, the question becomes one of how best to utilize surpluses. Another effect of the fundraising power of top programs is the growing disparity between the top programs and the rest of the competition (see figure on left). If one of the achievements of a successful athletics program is to increase the overall quality of the college or university and the student experience, it follows that greater distribution of wealth would enable a greater number of institutions to achieve this goal. I admit that a plan like this would discourage individuals from contributing at all if they feel their money is going to help the school’s competitors, but that is an acceptable loss. Simple removing from the budgets of the top end of the system forces those programs to scale back to more reasonable levels and by decreasing the disparity will ultimately foster greater competition. In essence the NCAA can impose a flexible salary cap on programs that is dependent on factors such as size of the program, number of participants, and market size among other factors.

Many colleges and universities and their athletic departments operate under separate financial umbrellas. However, the result is that most of the exchange between the two flows towards the athletics programs. The academic institution must maintain a commitment to developing the student part of the “student-athlete” moniker. It seems to me that because the NCAA places such a high emphasis on the intellectual development of these young people, it should promote the practice of an athletic program returning its profits to the academic institution it draws talent from. While the recently passed American Recovery and Reinvestment Act provisions several million dollars to promote accessibility of higher education to more individuals, several billion intended for higher education construction was stricken from the final version of the act. The schools and their athletic programs are in essence Siamese twins, joined together intricately so that each helps sustain the other. So it is crucial that athletic programs seize upon this opportunity to reform their own poor practices while helping develop and further the academic world by picking up the ball and running with it.

Welcome Inside The Locker Room: A New Voice in College Sports

I am a student with a passion for college athletics. Through my studies and experiences both on the inside and outside of sports organizations I have decided to dedicate my blog to taking a deeper look at the world of college sports. In order to create a credible and influential blog I scoured the Internet for sites and blogs with a similar focus that both serve as reference material and prompt further discussion. These sites comprise the linkroll in the right column of this site and help connect my blog with other credible, relevant authorities on the web. Many of these links were founding through a blog search tool like Technorati that enabled me to find relevant and authoritative blogs. Another successful technique was searching web directories like the ones provided by Google and Yahoo that list websites categorically. The links I have provided to the University of Southern California and the colleges within provide more information about my educational background including major and minor. The linkroll also contains a number of commercial sports media sites such as ESPN that report news and offer analysis and are well known and respected sports authorities. Blogs such as Deadspin are included because of their popularity and timeliness in posting pieces. Sites like Ball Hype and Rotoworld are news aggregators that also offer some analysis. Finally a site like the College Sports Council represents an organization working with issues in college athletics. These websites and blogs were selected through careful scrutiny and application of the Webby Awards and IMSA criteria. The Webby Awards critique sites using six criteria including the use of engaging content and multimedia, ease of navigation, engaging visual design, a high level of functionality, active user involvement and interaction, and an overall quality of experience that garners repeated visits and recommendations from users. The IMSA criteria look at who the blogger is, what material they reference, their influence, the depth of their analysis, the quality and sophistication of their writing, the maintenance and timeliness of postings, their admission of biases, and uniqueness of their viewpoint. These are all goals I hope to fulfill in this blog and look forward to sharing information and opinions and opening a new dialogue on the web.