Financial Impact of Death Penalty at Miami and an Alternative Solution
Earlier this week, I explained the history of the death penalty in collegiate athletics and why Miami is unlikely to receive it. Today, I want to show you the financial implications of the death penalty if Miami were to receive it. I also want to suggest an alternative solution that inflicts severe punishment without devastating the program long-term in the way the death penalty decimated the SMU football program.
University of Miami is a private school and thus not subject to open records requests. To look at the financial impact of the death penalty on the football program, I’ve chosen to use fellow conference member Georgia Tech’s football program as an example. Here’s how the two schools compare financially in football when you look at the data each provided to the US Department of Education for the 2009-2010 school year:
Georgia Tech Football
Overall athletic department revenue and expenses are similar at the two schools as well, with Miami bringing in a total of $56 million and spending $51 million and Georgia Tech at $47 million on both accounts. Miami has 417 athletes and Georgia Tech 387. The cost of grants-in-aid is much higher at Miami because it is a private institution, but that doesn’t play into today’s comparison. Also, Miami leases Sun Life Stadium, whereas Georgia Tech owns a stadium on campus. Although Georgia Tech’s financial situation is not identical to Miami, it is close enough to give an idea of how the death penalty would impact the program.
Here’s a brief list of revenues that would be lost (at Georgia Tech) if the death penalty was instituted for one year, based on the Georgia Tech Athletic Department’s audited financial statement for fiscal year 2010:
Ticket revenue: $9.3 million
Premium lease fees: $6.6 million
Football ticket revenue accounts for 19% of all operating revenue in Georgia Tech’s athletic department. All football revenue combined is a whopping 34% of all athletic department operating revenue. It takes an additional $6 million in student fees and other institutional support (in the form of out-of-state tuition waivers) from the university to support the athletic department’s budget.
As discussed yesterday, the death penalty crippled the SMU football program for decades. It has also been cited as a major reason the Southwest Conference folded. Although the death penalty may be deserved at Miami if all the allegations are proven as true, the NCAA is unlikely to unleash that sort of catastrophic damage again. However devastating it might have been to SMU and the Southwest Conference in the late 80s, it would be far more damaging now with billion dollar television contracts at stake.
So how do you punish Miami without ruining the program and conference long-term? You allow Miami football to play, but limit them to all away games for one to two years. This inflicts financial harm to the program, because it eliminates a huge source of revenue. However, it allows the conference to continue with no harm to other institutions and with its television contract intact. The conference could still allow Miami its share of the conference distribution, because it will have played the entire season, which will keep the athletic department from complete financial ruin.
Miami would lose between one-third and one-half of all operating revenue from the loss of home football games for one year. As we’ve seen before, football generally supports the operating budget of virtually every other sport on campus. There will likely be scholarship losses, which will help lower expenses in the department. However, it will be tough to cut other expenses. Contracts for coaches may not provide any method by which the athletic department can cut pay. Would Miami cut a sport? They currently have the NCAA minimum for men’s sports and only one sport over the minimum for women. Could Miami justify cutting a women’s sport in order to cover losses by a men’s sport? The risk of a lawsuit would be far too high, not to mention that it could bring Miami out of Title IX compliance.
So, where will the money come from to keep the athletic department afloat? There will likely need to be a greater reliance on institutional support. I have no knowledge of how involved President Shalala is in the athletic department. However, I can guarantee you she’ll be involved once she has to start writing checks to cover expenses in the department.
Losing between one-third and one-half of the athletic department’s operating revenue, generated by home football games, will be painful. That’s what you want when a serious violation has occurred. It will be a deterrent going forward, for Miami and every other institution. However, television contracts won’t be impacted, nor will opponents. It’s a way to inflict maximum punishment without dire consequences. Will the NCAA consider it if the allegations are proven to be true?
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