Monthly Archives: July 2011

The Month In Review – July 2011

On the last weekday of each month, I’m going to post a rundown of all the topics covered that month. I know not all of you check this site daily (although I have no idea why not, lol), so this will give you the chance to go back and look at anything you missed that interests you.

What Would You Do If…You Were a Big 12 AD?

Sports: The Best Paid Internships for College Students

An Interview With Texas A&M AD Bill Byrne

BCS Payouts vs. March Madness Payouts

Collective Bargaining Lockouts and Strikes: The Unintended Consequences of Paying College Athletes

The Tim Brando Show – July 25, 2011

Booster Club Financials – LSU

A Costly Decision: Sickle Cell Trait Testing of NCAA Student-Athletes

Postseason Financial Losses Not Limited To Football

Which Sports Turn a Profit?

How The NCAA’s Monetary Penalty Impacts Georgia Tech

What Would You Do If…You Were Gene Smith?

Why There Was No SEC Bylaws Violation In Cam Newton Situation

More On The Longhorn Network

Everything You Ever Wanted To Know About Florida’s Football Revenue And Expenses

Passion Of College Football Fans Transcends Professional Boundaries

Why Isn’t Return of TV/Bowl Money A Penalty For NCAA Violations?

Can We Measure The Effect Of A National Championship?

College Coaching “Salaries” Not As High As You Think

How Do College Football Coaches Rank Financially?

The Bob Huggins Factor

Giving Fans What They Want

What Would You Do If…You Were A Big 12 AD?

Time for our weekly Friday “What Would You Do If…” post!

What would you do if you were a Big 12 Athletic Director (at any school other than Texas)? You can pick one individual school or talk about the conference in general. What if anything would you do to compete with the Longhorn Network? What would you be asking the conference to do to improve the conference? Would you be looking to move to another conference?

Feel free to take this anywhere you want – those were just some questions to get you started.

Happy Friday!

Sports: The Best Paid Internships For College Students

I’m often asked why I am not in favor of paying college athletes. It’s simple: they already get a pretty sweet deal. Note: I’m talking about just the athletes on full scholarship, and particularly college football players.

While I’m busy paying back over $1,000/month for the next 26 years for both my college and law school education, college athletes on full scholarship graduate with zero student loan debt.

One of the arguments I hear most frequently is that college athletes can’t get jobs like other college students. Maybe not, but I think they have the best paid internships of virtually anyone on campus. As a student, I interned for two law firms, for the WTA Tour, and for a judge. While I received invaluable career training, I still have those pesky student loan payments. The same is true for students who want to work in radio, accounting or dozens of other fields. Most do internships for little or no pay and perhaps school credit. Which means in the latter situation the student is actually paying for their internship in the form of tuition for those credits!

Meanwhile, the athletes on campus are getting paid anywhere from $56.25 to $83.25 per hour, at least that’s the calculation Jay Paterno came up with for Penn State’s student athletes. That’s not counting the value of a degree and their future earning power, or the value of the world-class strength and conditioning training or medical treatment they’re receiving.

A Division I strength and conditioning coach tells me he would charge at least $60 per hour if he were training in a private gym. He says in a group situation it would be $30/hour for each person at the absolute minimum. He tells the minimum number of hours per year a football or basketball player would spend training is 124 hours, with 145 hours being very possible. That would make the range of value anywhere from $3720 (124 hours x $30 discount rate) to $8700 (145 hours x $60 rate) for strength and conditioning training alone. And that’s if each workout is only an hour. Double those numbers for two-hour workouts.

Now that we’ve taken a glimpse at what a student-athlete would pay in the private sector for all he or she receives, let’s look at what an athletic department actually spends on each student athlete. Using the University of Florida’s audited financial statements, I have broken down some of the items the athletic department pays for on a per student basis using Florida’s figure of 547 student-athletes for the 2009-2010 school year:

Scholarship $14,810.00
Meals over break, postseason and training table meals $1,552.00
Training Room $5,359.00
Office of Student Life (career and academic counseling and support for athletes) $3,615.00
Strength  & Conditioning and Equipment Rooms $2,458.00
     TOTAL $27,794.00

That’s nearly $30,000 per student-athlete the athletic department writes checks for each year. Not included in the above is team travel, coaching salaries, compliance staff salaries, facilities (construction, improvement and maintenance), marketing, or administrative expenses and salaries, all of which are necessary in order for the athletic department to operate so each student-athlete can compete in his/her sport. Those numbers would greatly increase the amount spent per student.

My chart above also doesn’t include the world-class medical treatment received when a student-athlete sustains an injury. For example, renowned doctor James Andrews is a team doctor for both Alabama and Auburn. Dr. Andrews has performed surgery on famous professional athletes like Drew Brees, Michael Jordan and Roger Clemens.  

A friend who works in college athletics recently told me about a trip he took to visit a Division I football practice. He described the lavish breakfast buffet set up for the players (which included a carving station – we’re not talking about the powdered eggs and dry cereal you get at the local hotel breakfast buffet), the indoor practice facility to protect players from the heat, the world-class weightlifting equipment and the smoothie bar where athletes could get some refreshment between workouts. Tough life, huh? And this wasn’t even at what I would consider a top Division I football program. This athletic department isn’t even on the self-sustaining list

So why is public sentiment so strong that college athletes deserve to be paid above and beyond what they’re already receiving? The problem is the amount of money proponents of paying athletes believe each athlete is bringing into the school. However, this is not limited to college athletics. Plenty of interns do valuable work for companies. For example, during my time at one of my law firm internships, I spent months pouring over discovery. I flagged the documents that eventually led to the plaintiff settling the case for$2 million. The law firm’s cut was roughly $600,000. I received nothing but the experience. I believe that experience helped me succeed in law school and boosted my resume so I could obtain other jobs in the legal field as I continued down my career path. The value of most internships is in the experience, not the paycheck.

College athletes play for one of three reasons: (i) experience and exposure for a future career in the sport, (ii) a free education, or (iii) because they love to play. If it’s the first reason, they’re essentially doing an internship, just like I did and many other college students do each year. Many internships are unpaid, regardless of how much money the company makes. Athletes on full scholarship are getting tuition, room and board on top of access to some of the best facilities, strength and conditioning staff, medical treatment, academic support and sometimes far better lodging and dining than other students. Sounds like the best paying internship I’ve heard of.

Why then has the debate over paying college athletes reached an undeniable roar? Likely because of posts like this, where I showed you the profit made by the top football and basketball programs. Fans see those numbers and find it shocking that athletic departments are banking that kind of cash while the athletes go unpaid. Let’s not forget that football or basketball or any other profit-producing sport (of which there aren’t many others) is just one unit of an athletic department. Just like the Coca-Cola Company funds Mr. Pibb even though Coca-Cola is its best-seller, an athletic department uses funds from football and other profit-producers to fund golf and swimming and baseball.  

All that being said, I’m not completely opposed to paying athletes when there is a direct correlation between them individually and the school making money. If there’s a way to compensate them for jersey sales and other uses of their likeness without running afoul of Title IX, that makes sense to me. The rest of it is a lot of indirect correlation that can’t be measured. There might be one football player on a team who gets the most media attention, but no one football player gets a team to a bowl game or convinces Nike to sign a multi-million dollar contract with the school.

I’d also be in favor of allowing them to work (which the NCAA currently regulates) to earn extra money, but you have to find a way to allow it without opening the system up to abuse by boosters and other interested parties who overpay for a “job” or “internship” that doesn’t really exist. Skip Oliva at Saturday Down South had a great idea in a futuristic piece he set in the year 2021:

“It also helped that the National Football League, after years of ignoring the problems with its de facto developmental system, took an active role in changing college football. “The big question was always, ‘Do you pay the players?’” ACF’s Meyer said earlier this week. “What we eventually realized was, it’s not whether you pay the players; it’s whether you maximize their professional educational opportunities. And that’s when the NFL stepped in by creating the Spring League.”

Since 2016, the NFL Spring League has provided ten-week internships for college upperclassmen and recent graduates to play an exhibition schedule in NFL cities under the direction of longtime pro coaches. “The kids get paid a stipend for the internship without altering their ‘amateur’ status within ACF,” Meyer said, adding, “It provided a necessary safety valve to relieve the pressure built up under the NCAA.”

For more on this topic, you can read my explanation on why Title IX presents a serious roadblock to paying college athletes. Also, I’ll be posting something in the next week or two about the resources available for student-athletes who are struggling to get by, including the funds I mentioned in yesterday’s post about March Madness money (which, as a sneak preview, include funds for things such as attending family funerals or completing your degree after eligibility or after injury).

An Interview with Texas A&M AD Bill Byrne

Texas A&M AD Bill Byrne

Texas A&M Athletic Director Bill Byrne chatted with me by telephone yesterday. We talked about everything from the Longhorn Network to rumors of a move to the SEC to Kyle Field renovations. Below you’ll find the full interview followed by my thoughts on the most important thing he said.

Q: What are some things A&M can do to compete with Longhorn Network?

A: I’m not concerned about competing with the Longhorn Network. What I am concerned about is fairness. As Athletic Directors [in the Big 12] we agreed that every school could take one football game and choose to put it on PPV or our own network. As far as the high school games, I think that is absolutely against NCAA rules. I think that’s a recruiting advantage. Fairness is what you want you in recruiting.

Q: What about the fact that University of Texas administers high school sports in Texas? Is that an issue?

A: I think that’s a significant issue.

Q: I’m of the opinion that Texas will become an independent in the next five years. What do you think?

A: They have a very good conference. They get special treatment from ESPN, and they have a place for all of their Olympic sports. I don’t agree that they will become independent.

Q: Tim Brando and I discussed on his show the other day the increasing volume of Texas A&M fans who want to move to the SEC. Tim says he’s hearing from a lot of fans who are ready to make the move. Do you feel like fans are becoming more vocal about wanting to move to the SEC?

A: I don’t know the answer to that, because I don’t know who all is talking to him. There was a movement last year by a number of people on the internet that wanted us to leave Big 12 and go to the SEC. Texas A&M didn’t push Humpty Dumpty off the wall, but we did help put the pieces back together again in the Big 12. There’s some angst here about our future, so I’m concerned about that.

Q: At SEC Media Days Commissioner Mike Slive proposed an increase in GPA required for the core high school curriculum required by the NCAA. Several coaches opposed saying they’d rather increase the standards at the college level instead of putting pressure on high schools or denying kids opportunities. What do you think?

A: I’ve been an AD now almost thirty years and I find where the problems arise are on the front end and whether or not they can compete academically on campus. If prospective-student athletes don’t have at least a 1300 SAT or are in the top 10% of their class, they’re not getting into Texas A&M. We’re an elite academic institution like Vanderbilt or Florida in the SEC and our core curriculum requirements are higher than those required by the NCAA.  

Q: You’ve been compared to Louisville AD Tom Jurich because of your commitment to Title IX and Olympic sports and success at marketing/fundraising. Do you agree?

A: Oh yeah. Tom has done an incredible job everywhere he has been. He’s done a remarkable job at Louisville.

Q: Why focus on non-profit-producing sports? What benefits do they bring to the University?

Once someone puts on a Texas A&M uniform, they are your athletes. They are your kids. I treat our athletes as though we’re part of a big family. When I was at Oregon I was introduced at a woman’s volleyball banquet. They talked about how I attended all their games, banquets and other events. When they introduced me they talked about me being like a father to the program. I feel a personal responsibility to those students and their parents.

Q: Obviously Title IX is the reason some sports are on campus….

A: I was very disappointed when Title IX was passed and not funded. It was an unfunded mandate, and I objected to that aspect. I don’t believe in unfunded mandates. Once it was passed, I stand up and salute it. We are going to do the very best we can for all of our athletes. We treat all of our athletes the same. We want to make sure you have a great experience while at Texas A&M and leave with a degree.

Our women’s basketball team won the national championship this year. Their budget is identical to the men’s except the guarantees are less.

Q: Are there any plans to renovate/expand Kyle Field or any other facilities in the near future?

We’re spending 25 million right now to renovate the baseball field. We’ve recently had seven coach’s nights across Texas where renovation plans for Kyle Field have been presented. We’re also getting a new outdoor track. We have the best indoor track facilities in the world – not the country, the world. That’s why we host the NCAA championship every third year. The new outdoor track will be the best in the country and will host Olympic trials. The Regents passed football plans for Kyle Field last week. We’ll start on the one side at the end of the 2012 season and tear it down section by section. We’ll tear down the west side at end of the 2013 season and the second deck following the 2014 season.

Q: Will there be additional seating added during the renovation to Kyle Field?

A: We will not increase size of football stadium. It seats 90,000 now. There’s a good reason for not having an increase – in the sport of football there is declining attendance both in college and NFL and increase in television viewership. We don’t want to overbuild.

Q: I’ve written a lot about colleges selling naming rights on their facilities. How do you feel about naming rights?

The new baseball stadium will have “Blue Bell Park” in the name, if that answers your question. They’re paying 7-8 million to have the naming rights for 20 years.

Q: Texas A&M is one of 22 self-sustaining athletic departments. To what do you attribute that?

A: I tell all of our coaches they need to hug the bricks at Kyle Field every day. When you have a stadium that seats 90,000 and is sold out it generates a lot of help. Also, our membership in Big 12 and terrific sponsorship program. We manage our money well.

__________

The thing that stood out to me most about this interview is what Byrne said about overbuilding. Texas A&M has made the conscious decision not to add any seating to their football stadium despite their attendance levels. Texas A&M was #13 in average attendance in 2010 according to the NCAA.

This to me underscores the importance of television contracts in college football. I’ve long said more ADs and commissioners should be former CEOs and CFOs because college football is a billion dollar business. Now I’m wondering if the focus shouldn’t be on someone who has worked in or who has connections with the television industry.

No commissioner has been more lauded lately than the Pac-12′s Larry Scott. Why? Because he secured a record-breaking television deal for his conference that involved ESPN and FOX having to work together. Yesterday, he announced details of the Pac-12 Network, which will feature a national network and six regional networks within the conference’s footprint. In my opinion this blows the Big Ten Network out of the water in terms of structure and availability. (That being said, I don’t think he has the same product as the Big Ten, so we’ll see how it goes.)

Television is not only a huge source of revenue for conferences, it impacts the entire structure of college football. For some like Notre Dame and BYU it helps support independence. For others, like members of the Big 12, it can hold a conference together. It’s the reason why TCU and Utah are moving to AQ conferences and Boise State is not.

The stadium capacity arms race in college football is over. Sure, stadiums will still be renovated and improved, but the race to see who can add the most seats has likely peaked. Instead, we are in the midst of a great television race. Which conference can sign the largest contract? Which conferences can support their own network? Which schools can use their own network to get ahead? Which school can a conference add to get into a top tv market they don’t already occupy?

It’s time to face the facts. The future of college football is in the hands of television networks.

BCS Payouts vs. March Madness Payouts

Quite frequently in the debate over the BCS there are comparisons to March Madness. Proponents of moving to a playoff system point to the approximately $771 million a year (beginning in 2011) March Madness generates in television alone (previously an average of $545 million). Meanwhile, the BCS bowls will generate just $125 million beginning in 2011 (previously$96.4 million per year ).

While it’s true March Madness generates more television revenue overall, that doesn’t necessarily mean more money for each athletic department. A total of $452,200,000 was distributed by the NCAA in 2010-2011, and less than half of all monies distributed went back into the athletic department with no strings attached (via the Basketball Fund). Here’s the breakdown:

Basketball Fund ($180,467,000): Monies are distributed based on a six-year rolling period. Institutions receive one unit for each appearance, not including the championship game. Each unit was worth $239,664 in 2010-2011.

Academic Enhancement ($22,461,000): Each Division I institution gets $66,000 to use for academic support service for student-athletes.

Conference Grants ($8,115,000): Each conference receives $261,744 less an agreed upon amount remitted to the regional officiating advisors program. Funds must be used to improve officiating, enhance conference compliance and enforcement programs, drug abuse education, enhancement of opportunities for ethnic minorities, and development of gambling education programs.

Sports Sponsorship Fund ($60,155,000): Each school’s share is determined based on the number of varsity sports sponsored. Points begin with the 14th sport (the number required in Division I), and $30,091 is distributed for each sport above thirteen. These monies may be directed to individual institutions or to the conference for distribution, as decided upon by each conference.

Grants-In-Aid Fund ($120,309,000): Each school’s share is determined based on the number of grants-in-aid awarded. These monies may be directed to individual institutions or to the conference for distribution, as decided upon by each conference.

Student Assistance Fund ($59,738,000): This fund also consists of the Special Assistance Fund and the Student-Athlete Opportunity Fund. For the Student Assistance Fund, all athletes are eligible to receive these funds, even if they have exhausted eligibility or no longer participate due to medical reasons. These monies are distributed to the conference who decides how to allocate. This fund is to be used to assist student-athletes with financial needs that “arise in conjunction with participation in intercollegiate athletics, enrollment in an academic curriculum or that recognize academic achievement. The Student-Athlete Opportunity Fund is distributed by conferences based on the formula used for sports sponsorship and grants-in-aid. The Special Assistance Fund is to be used to meet student-athlete financial needs of an emergency or essential nature for which other financial aid is not available.

Supplemental Support Fund ($955,000): Used to support campus-based initiatives designed to foster student-athlete academic success at eligible limited resource institutions.

At the end of the day, most conferences receive larger payouts from the BCS than March Madness when it comes to money going back into the athletic department with no strings attached. Below is a look at the payouts for the past four years. Totals in red reflect conferences who received a larger payout from basketball than football for the given year. You should also note the football payouts indicated for the non-AQ conferences (Mountain West, Mid-American, Sun Belt, C-USA and Western Athletic) are based on the payout from the BCS before the agreement between the conferences to split BCS money equally between all non-AQ conferences kicks in. Also, these numbers do not include payouts for non-BCS bowl games.

ACC 2006-2007 2007-2008 2008-2009 2009-2010
Football $18,088,675 $18,324,992 $18,672,725 $19,787,058
Basketball $14,149,120 $15,090,053 $15,863,538 $18,220,902
Difference  $3,939,555 $3,234,939 $2,809,187 $1,566,156
         
Big 10 2006-2007 2007-2008 2008-2009 2009-2010
Football $22,588,675 $22,824,992 $23,172,725 $24,287,058
Basketball $13,087,936 $13,561,946 $13,803,338 $15,332,222
Difference $9,500,739 $9,263,046 $9,369,387 $8,954,836
         
Big 12 2006-2007 2007-2008 2008-2009 2009-2010
Football $18,088,675 $22,824,992 $23,172,725 $19,787,058
Basketball $14,325,984 $15,663,093 $16,275,578 $17,109,871
Difference $3,762,691 $7,161,899 $6,897,147 $2,677,187
         
Big East 2006-2007 2007-2008 2008-2009 2009-2010
Football $18,088,675 $18,324,992 $18,672,725 $19,787,058
Basketball $14,856,576 $16,618,160 $19,365,880 $23,109,436
Difference $3,232,099 $1,706,832 ($693,155) ($3,322,378)
         
Pac 10 2006-2007 2007-2008 2008-2009 2009-2010
Football $18,088,675 $18,324,992 $18,672,743 $19,787,058
Basketball $11,849,888 $12,606,880 $13,391,298 $14,665,604
Difference $6,238,787 $5,718,112 $5,281,445 $5,121,454
         
SEC 2006-2007 2007-2008 2008-2009 2009-2010
Football $22,588,675 $22,824,992 $23,172,725 $24,287,058
Basketball $13,087,936 $14,708,026 $15,657,518 $15,110,015
Difference $9,500,739 $8,116,966 $7,515,207 $9,177,043
         
Mountain West 2006-2007 2007-2008 2008-2009 2009-2010
Football $3,529,600 $3,724,000 $9,788,800 $9,878,710
Basketball $3,183,552 $4,011,280 $4,120,399 $3,999,710
Difference $346,048 ($287,280) $5,668,401 $5,879,000
         
Mid-American 2006-2007 2007-2008 2008-2009 2009-2010
Football $1,964,800 $1,508,000 $2,094,400 $2,139,355
Basketball $1,945,504 $1,910,133 $1,442,140 $1,333,237
Difference $19,296 ($402,133) $652,260 $806,118
         
Sun Belt 2006-2007 2007-2008 2008-2009 2009-2010
Football $1,443,200 $2,062,000 $1,529,600 $1,559,570
Basketball $1,061,184 $1,146,080 $1,854,180 $2,222,061
Difference $382,016 $915,920 ($324,580) ($662,491)
         
C-USA 2006-2007 2007-2008 2008-2009 2009-2010
Football $2,486,400 $2,616,000 $2,659,200 $2,719,140
Basketball $7,782,016 $8,213,573 $9,064,879 $8,507,523
Difference ($5,295,616) ($5,597,573) ($6,405,679) ($5,788,383)
         
Western Athletic 2006-2007 2007-2008 2008-2009 2009-2010
Football $9,008,000 $9,170,000 $3,224,000 $7,798,925
Basketball $3,006,688 $3,247,227 $3,090,300 $3,110,886
Difference $6,001,312 $5,922,773 $133,700 $4,688,039

I think it’s interesting to note that AQ football conferences are bringing in more from March Madness than non-AQ football conferences. Some of that has to do with the smaller size of some of the non-AQ conferences, but it’s still rather sizeable disparity. Nonetheless, I imagine people still find the March Madness system more digestible because it is a playoff system and because payouts are based on number of appearances.

Special thanks to my research assistant Eric Heckman for helping me compile the data.

Collective Bargaining, Lockouts and Strikes: The Unintended Consequences of Paying College Athletes

Yesterday, my friend Lisa Horne over at FOX Sports published a really interesting piece on how paying college athletes could lead to them being classified as employees and capable of collective bargaining. Horne interviewed me for the piece several weeks ago, and I’ve been eagerly awaiting its publication.

As Horne says in her article, “If the rules-makers can’t stop a kid from trading pants for tattoos, how can they expect to prevent an 18-year-old — with maybe $100 in his checking account — from listening to a union rep’s lure of riches?” She makes an excellent point. If student-athletes were classified as employees, there’s no reason to believe they wouldn’t form a players association and collectively bargain for everything from safer working conditions to their share of the revenue pie.

And they would have every right to do so as employees. But can you imagine the impact of a strike or lockout in college football? It would make the NFL lockout look like child’s play. As I said in Horne’s article, every Saturday an average of 5 million fans pack Division I stadiums. Compare that to just 1.1 million on any given Sunday in NFL stadiums. Add in the economic impact to each city on gameday, which for top programs is in the tens of millions of dollars, and the numbers are staggering.

Increasing scholarships to cover cost of attendance is not going to trigger a reclassification of student-athletes as employees. However, any pay over that very well could. Here’s how it might go. Let’s say college athletes are being paid some amount, any amount, over cost of attendance. One or more players decide schools, conferences and/or the NCAA are violating antitrust laws. Essentially, antitrust laws disallow business practices that discourage competition or restrict an employee’s ability to make a living. So, for example, players could sue over the requirement that they sit out one year when transferring. Similar issues in professional sports have been considered by courts such as the franchise tag in the NFL and the reserve clause in Major League Baseball.

Restraints such as not allowing a player to reach free agency for a specified number of years are only allowed in professional sports because they’ve been collectively bargained. The product of collective bargaining between an employer and unionized employees is protected by the non-statutory labor exemption.

So, back to our scenario. One or more players sues a conference or the NCAA for a restraint like the rule regarding transfers. If players were classified as employees (which could be determined in a suit like this), it’s highly likely the court would find this to be a violation of antitrust laws. Much like we’ve seen in the history of each professional sport, the players would form a players association and collectively bargain these issues with the NCAA, assuming the NCAA was still the governing body for collegiate athletics. If not the NCAA, it would be whatever governing body we have for collegiate athletics.

What would collegiate athletics look like then? Maybe there would be a salary cap for each athletic department or even each football program. Players would likely get a share of licensing revenue. Health insurance and maybe even post-career benefits might be covered by schools or the governing body. Since schools would be receiving less revenue than they currently receive, they’d likely have to cut sports that don’t turn a profit in order to make the finances work, which generally means any sport outside of football and men’s basketball. And remember, Title IX still applies. Women have to have similar opportunities. This is true even if you take football out of the NCAA. As long as football is still associated with the school, Title IX (a federal law) applies.

Another area where you begin to see the system doesn’t work is when you talk about having a draft or trading players. Those things wouldn’t fit in collegiate athletics. It might be contrary to what you think, but I would imagine most players have an opinion about where they want to go to school. One that’s much stronger than say a prospect in the MLB draft who wants to play for his hometown team. Brett Hundley at UCLA is said to have chosen UCLA for its pre-med program. Because many of these athletes are taking advantage of the academic opportunities afforded to them, it doesn’t make sense to have a draft or allow trades. What if they ended up at a school that didn’t have their major?

None of this is to say that a system couldn’t be created that worked. However, it’s not as easy as simply deciding tomorrow that college athletes should be paid. There are a number of ramifications to that decision, from figuring out how to comply with Title IX, to finding the money in the majority of athletic departments who aren’t self-sustaining, to the myriad of issues that arise if college-athletes are reclassified as employees.

The Tim Brando Show 7-25-11

This morning I went on the Tim Brando Show to talk about the Longhorn Network, the future of the Big 12 and SEC Media Days. It’s always a good start to the week when I get to hang with Timmy B!

Listen here.

Booster Club Financials: LSU

The Tiger Athletic Foundation exists to raise funds for Louisiana State University and Agricultural and Mechanical College and its intercollegiate athletic department. According to the Foundation, funds raised are used to “defray the cost of scholarships of more than 450 student athletes, to help maintain and improve LSU athletic facilities, and to retire present indebtedness.”

With net assets of over $265 million, the Tiger Athletic Foundation can safely be called the lifeblood of LSU athletics. Here’s a look at how the Foundation’s net assets break down:

Current Assets  
Cash and cash equivalents $2,791,816.00
Restricted cash $54,599,432.00
Accounts receivable, net $2,072,507.00
Contracts receivable $11,832,265.00
Unconditional promises to give, net $9,629,420.00
Deferred charges and prepaid expenses $916,855.00
Other current assets $179,792.00
   
Total current assets $82,022,087.00
   
Noncurrent Assets  
Restricted assets:  
     Cash and cash equivalents $45,653.00
     Investments $7,832,449.00
Contracts receivable $27,522,847.00
Unconditional promises to give, net $1,982,341.00
Property and equipment, net $137,855,929.00
Assets held for donation to LSU $3,460,103.00
Other noncurrent assets $4,677,073.00
   
Total noncurrent assets $183,376,395.00
   
TOTAL ASSETS $265,398,482.00

Yes, you read that correctly. The Tiger Athletic Foundation has total assets of over $265 million dollars!

Lest you think the booster club only operates for football, $4.2 million of the “Other noncurrent assets” above is from financing costs associated with the construction of Alex Box baseball stadium. In return for financing the stadium, the Foundation will receive rights to certain seating in the stadium’s suites.

The Foundation’s revenue (shown below) comes from a variety of sources outside of outright donations. Scoreboards and other related equipment at various athletic venues on campus are owned by the Foundation, who then secures sponsorships for the scoreboards to generate revenue. The Foundation also financed improvements to Tiger Stadium in 1999 and 2004 and receives rental payments each year from LSU for the facility. Those payments total $4.5 million per year and are used to pay back bonds issued to finance the improvements.

The University Club is also owned by the Foundation, which receives a rental payment each month from The University Club of Baton Rouge, L.L.C. equal to 6% of the prior month’s gross revenue plus an annual fee per member.

Here’s a look at how the Foundation generated revenue during fiscal year 2010:

Revenues and Gains  
Donations from TAF members $21,961,773.00
Scoreboard sponsorships $2,000,000.00
Rents – University Club and LSU $4,566,857.00
Investment income $391,841.00
Other revenue $359,965.00
   
Total revenues and gains $29,280,436.00
   
Net assets realized from restrictions $3,199,223.00

Of course, the Foundation also has expenses:

Expenses  
Contribution to LSU – athletic dept $8,252,758.00
Contribution to LSU – non-athletic $163,601.00
Tiger Den suites $4,055,554.00
Stadium Club $5,047,246.00
Alex Box suites $239,356.00
General and administrative $2,316,335.00
Fund-raising $1,218,134.00
   
Total expenses  $21,292,984.00

In addition to the $8,252,758 distributed by the Foundation to the athletic department, another $1,371,196 in distributions came from booster clubs and $469,513 from affiliated chapters for a total of $10,257,068 in distributions for the 2009-2010 school year.

Over $3 million in contributions was designated for the football program. That money was used for coaching compensation, recruiting, team travel, gameday expenses, marketing and other operating expenses. Men’s basketball received $98,658, women’s basketball received $91,757 and other sports received a combined total of $3 million. Nearly $4 million was distributed with no sport-specific designation for its use.

Donors often place restrictions on their contribution. Of the $21 million the Foundation has in total restricted assets nearly $3 million is for the annual scholarship fund, more than is restricted for any single sport or facility. Donations for the soccer complex come in at $1.9 million, with restricted funds for the football stadium coming in at $1.8 million. Other restrictions include funds for the LSU Golf Facility, athletic trainer’s equipment, the Academic Center, the Band Hall and many other athletic-related projects.

Although I haven’t shared them, I have reviewed the financials of several booster clubs. A unique aspect of Tiger Athletic Foundation is the fact that it has financed some of the athletic facilities and receives rent from the athletic department for use of those facilities. Most of what I’ve seen at other schools is the athletic department itself financing the facilities and including that debt on their own balance sheet. That’s not to say one way is better than the other, but it makes comparing booster finances side by side nearly impossible.

For example, the Gator Boosters, the University of Florida’s booster club/athletic foundation, shows only $1 million in net assets, because they do not own or finance any of the facilities and transfer virtually all of their operating income to the University Athletic Association each year. Where the Tiger Athletic Foundation transferred just over $8 million to the athletic department in fiscal year 2010, the Gator Boosters transferred $39.5 million. For that reason, I’ll be showing you booster club financials one at a time and will not be making direct comparisons unless it is clear they can fairly be made.

Regardless of how a booster club chooses to function, it is clear that they are an important part of funding an athletic department. It is no surprise that LSU is a self-sustaining athletic department now that you’ve seen the kind of assets the booster club maintains.

*All figures are from the audited financial statements of Tiger Athletic Foundation for the years ending December 31, 2010 and 2009.

A Costly Decision: Sickle Cell Trait Testing of NCAA Student-Athletes

Today’s post is by someone I hope becomes a regular contributor to BusinessofCollegeSports.com, Alicia Jessop. Alicia is a female attorney with a passion for sports, which of course means she reminds me of me. Hope you all enjoy her terrific look at sick cell trait testing in the NCAA.

By Alicia Jessop, author of RulingSports.com

Shuttle drills.  Mat drills.  And of course, the ever-despised suicide drills. 

NCAA Football players will test their physical prowess under the blazing summer sun in coming weeks, when they report to their respective campuses to begin training camp for the upcoming season.

However, Division II and Division III NCAA Football players may be hitting the field ignorant of whether they are carriers of the genetic trait “. . . linked to at least nine of the 21 deaths of collegiate football players since 2000.” 

A person with “one gene for sickle hemoglobin and one gene for normal hemoglobin” is said to be a carrier for sickle cell trait.  While normal hemoglobin moves easily through blood vessels, sickle hemoglobin “. . . tend to cluster together, and cannot easily move through blood vessels.”  The clustering of sickle cells “. . . causes a blockage [which] stops the movement of oxygen-carrying blood.”  Generally undetected by its carriers, sickle cell trait carriers face complications, including death, when encountering “. . . intense, stressful conditions, exhaustion, [and] hypoxia (low oxygen).” 

As of August 1, 2010, NCAA Division I institutions are required to test incoming student-athletes for sickle cell trait.  The NCAA recommended testing for sickle cell trait after a settlement was reached in a case brought against Rice University by the parents of Dale Lloyd II, who died from complications of sickle cell trait after completing a Rice University Football team conditioning workout in 2006.   However, under the current NCAA legislation, Division I student-athletes may sign a written waiver to opt out of the testing if they know “. . . the risks associated with sickle cell trait. . .” 

In contrast, NCAA Divisions II and III do not mandate sickle cell testing of student-athletes.  Recently, the NCAA Committee on Competitive Safeguards and Medical Aspects of Sport recommended that Divisions II and III require “. . . sickle cell trait testing for all student-athletes. . . beginning with the 2012 academic year.”  If NCAA legislation on this issue is supported, it will be voted on at the 2012 NCAA Convention.

In deciding whether to move forward with legislation mandating the testing of student-athletes for sickle cell trait, NCAA Division II and Division III leaders must consider the costs of not testing student-athletes for sickle cell trait.

On June 30, 2011, a Florida jury awarded the parents of former University of Central Florida (“UCF”) football player Ereck Plancher $10 million in their wrongful death lawsuit against the UCF Athletic Association.  18 years old when he passed away on March 18, 2008, Plancher died after a preseason UCF Football team workout.  Testimony throughout the trial proved that Plancher died from complications of sickle cell trait.   Although UCF Director of Athletics Keith Tribble testified that UCF required the testing of all African-American athletes for sickle cell trait, Plancher’s parents maintained that Plancher “. . . was never told he tested positive for the trait.

In awarding the $10 million judgment, “. . . jurors found the athletic association was negligent and failed to do everything possible to save Plancher’s life.“  Attorneys for the UCF Athletic Association indicated it would appeal the judgment.  Regardless of the outcome of an appeal, the judgment entered in the Plancher trial demonstrates the high damages a jury is willing to award when finding a university negligent in the death of a student-athlete resulting from complications of sickle cell trait.

When considering the damages imposed by juries, and more importantly the costs to human lives, the $10 to $15 dollars that tests used to diagnose sickle cell trait cost is minuscule.  Thus, weighing the cost-benefit analysis of adopting legislation requiring sickle cell trait testing, requires NCAA Divisions II and III to at a minimum, approve legislation mirroring current NCAA Division I requirements.    

It appears that this legislation would be welcomed by NCAA Division II and Division III institutions. 

In 2011, the University of West Florida Argos (“UWF”) won the NCAA Division II Baseball Championship.  Kelly Russ is the Interim Director of University Communications and External Relations at UWF.  In discussing UWF’s policy related to testing student-athletes for sickle cell trait, Russ explained that UWF verifies the student-athlete’s ”family history of sickle cell trait. If there is a family history of sickle cell trait, [UWF sends student-athletes] to the doctor for blood testing.”

In 2010, the University of Wisconsin-Whitewater Warhawks (“UWW”) won the NCAA Division III Football Championship.  University of Wisconsin-Whitewater Athletics Director Paul Plinske indicated that the UWW ”Sports Medicine staff looks over the health history forms to see if student-athletes have indicated their sickle cell status.  If they have not, then the sports medicine staff talks with the student-athlete to get testing information and/or encourages them to go and get tested.”  Thereafter, Plinske noted that UWW encourages its “student-athletes to follow-through and get this test completed if they have not already done so.”

These responses from members of Division II and Division III Championship-winning institutions, along with the NCAA’s own estimate that 40 percent of Division II and Division III programs test for sickle cell trait, signal the readiness of Division II and Division III institutions to follow Division I’s course and require testing of student-athletes for sickle cell trait.

In addition to mandating testing, all Divisions must approve legislation requiring the notification of student-athletes of their status as a sickle cell trait carrier.  Additionally, education and training methods must be adopted which address the special conditioning needs of those student-athletes that are carriers of sickle cell trait.

These measures must be adopted across-the-board in the NCAA, because the business and personal costs of not doing so are too great.

(Visit RulingSports.com on Saturday for a discussion of the legal implications of not allowing student-athletes to waive the sickle cell trait test).

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