Financial Impact of Death Penalty at Miami and an Alternative Solution

Photo by Flikr user Kristian Golding

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:

Miami Football

Revenue: $24,631,029

Expenses: $17,863,218

Georgia Tech Football

Revenue: $24,870,064

Expenses: $15,519,206

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

Guarantees: $350,000

Concessions: $418,714

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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Here on BusinessofCollegeSports.com I never charge for content. If you like the site, I only ask that you return again and that you support my friends when you can. One of those friends is Courtyard by Marriott. While researching for this piece, I was staying on the top floor of the fabulous Courtyard by Marriott Manhattan/SoHo. When I arrived at the hotel at 2 a.m. after a 4-hour flight delay, I couldn’t wait to fall into bed. However, when I walked into our room I had to delay sleep long enough to admire the amazing view of Manhattan from my window. Once I was finally in bed, I got a great night’s sleep. The bed was comfortable and the room quiet, something very few Manhattan hotels can claim. The rooms were large and fresh, and the front desk staff was amazingly friendly and helpful. The lobby of the hotel features Courtyard by Marriott’s new interactive GoBoard, a large touchscreen that allows you to sneak a peak at local attractions, find the best restaurants nearby for dinner, check the weather and even your flight. The Courtyard by Marriott Manhattan/SoHo was the perfect place for my business trip to Manhattan, and I can’t wait to visit again!


Posted on August 25, 2011, in ACC, Football, Investigations, Violations. Bookmark the permalink. 4 Comments.

  1. Great Article. No one goes to Miami games anyway, so its a win win situation! Great insight, thanks for being the voice of reason yet again.

  2. Wonderful article as always, Kristi. I love that you’re thinking outside of the box to suggest an alternative to the death penalty. My problem with issuing a sanction that involves the Hurricanes football team playing all away games, is that you do this at the cost of the student-athlete’s education at that school. Away games obviously require travel. Travel clearly means missing classes. To make a team travel to every single game, means that these young men will miss twice as many classes as their opponents. And from that, would obviously come dire impact to their educational endeavors.

  3. If this whole Miami situation ends up being as bad as it appears at this point, the NCAA has no choice but to implement the death penalty. The only decision will be whether to have it last one or two years.

    If the NCAA does not implement the death penalty against Miami, then it effectively eliminates the death penalty as a future option against all NCAA schools. All of the other NCAA colleges/universities will recognize this and take the approach of ‘what’s the worst that can happen to us since Miami didn’t get the death penalty?’ They will essentially say “It doesn’t matter how bad our violations are as long as we ‘report them immediately and cooperate fully’ with the NCAA when [not 'if'] we get caught.”

    It’s the same approach people use when speeding while driving. If you only get a $20 ticket for going 80 mph in a 65 zone on the freeway, you speed all the time. If it is $200 you speed less and if it is $2,000 you don’t speed at all. Same with the NCAA – if it only slaps these schools on the wrist or creates ‘special’ punishments just to avoid implementing the death penalty, the schools will continue to violate the NCAA’s policies. Why do you think things have gotten so far out of hand now – because the NCAA has been unwilling to bring the hammer down on offending schools. Until that enforcement mindset changes, these problems will continue to mount.

    This is THE defining case/situation for the NCAA. If they let Miami off the hook with anything less than the death penalty, then it’s ‘anything goes’ for the entire NCAA. That means the NCAA becomes irrelevant and essentially defunct. I don’t think the NCAA wants that nor do most of the NCAA university presidents/boards of regents. At least not yet. Maybe in 5-10 years but not quite yet.

  4. I’m not sure canceling all the home games would work. The NCAA tried this with SMU in 1988, but the entire season ended up getting canceled (so they missed two seasons, 1987 and 1988).

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