A Lucky Opportunity: How Andrew Luck’s Success Has Helped Stanford Athletics

One thing is certain to happen this evening at Radio City Music Hall:  The first name to be called in the 2012 NFL Draft will be that of former Stanford quarterback Andrew Luck.

In his four years at Stanford, Luck threw for 31 wins, led Stanford to three bowl appearances and was a runner-up for the Heisman Trophy twice, all while completing an engineering degree in architectural design.  Luck’s impressive resume at Stanford left the university with not only a stronger football program, but with a great marketing opportunity.

Joe Karlgaard has served as Stanford’s Senior Associate Athletic Director for Development since February 2011.  Prior to that, he was the athletic director at Oberlin College for six years and as a Stanford student, worked in Stanford’s track and field office.  When asked whether a Stanford student-athlete has captivated donors like Luck, Karlgaard says the school has never seen a current student-athlete as celebrated as Luck.

“I think that Andrew certainly has a profile in college athletics that we haven’t seen at Stanford in a long time.  Tiger Woods may have a similar profile, but his profile grew after he left Stanford and won the Masters.  Luck is a two-time Heisman finalist, who helped us turn around our football program and performed well in the classroom,” Karlgaard explained.

The profile Luck developed during his four-year tenure at Stanford has assisted the Stanford athletics department in fundraising.  In particular, the athletics department has received two anonymous donations totaling $15 million dollars from donors who said they were inspired by Luck.  While these large donations were definitely given as a result of Luck’s presence at Stanford, Karlgaard believes that Luck has motivated others to donate money to the Stanford athletics department.

The $15 million which the Stanford athletics department received from donors who were inspired by Luck will only further propel Luck’s positive presence on the campus.  According to Karlgaard, the $15 million will be used to fund endowment and capital projects.  One capital project that will be funded in part by the $15 million donation, is Stanford’s renovations to its Arrillaga Family Sports Center.  Stanford will break ground this summer on the 18 month renovation process to the facility.  Renovations will include an expanded weight room, new football locker room, two new auditoriums, new football coaches offices and new film rooms.  The total cost of the renovations to the Arrillaga Family Sports Center is expected to be $18 million, of which Karlgaard indicates has all been raised by Stanford.

Luck’s presence as Stanford has been used by the athletics department to generate annual giving donations.  Stanford athletics utilizes the website BuckCardinal.com for annual giving purposes.  As of this Tuesday, the front page of the website features a nine-and-a-half minute video featuring Luck discussing his experience at Stanford.  Karlgaard said that the email was pushed out to donors who have not given this year to the annual find with invitation for them to donate to the athletics department.  Within 24 hours of the video being uploaded, it had received over 2,000 page views.

As for whether Luck’s being drafted number-one will further motivate donors to give money to Stanford athletics, Karlgaard said, “I don’t think his going number-one necessarily changes the minds of our donors regarding how they feel about Luck or Stanford football.  He’s the whole package.  He’s the consummate student-athlete as Stanford envisions it.  His success on the football field and his commitment to finishing his degree in a rigorous subject, like architecture, have inspired our donors at a variety of levels.  I don’t think his going number-one has any real impact.  If the Colts decided to take Robert Griffin III, I don’t think we would see any real downturn to our donations for development.”

Today, there is an air of excitement on the Stanford campus, as the school’s quarterback is expected to be the first name called in the NFL Draft.  However, given the profile Andrew Luck built-in his four years at Stanford, his name will certainly continue to ring out on Stanford’s campus.

Georgia Tech’s Recruiting Expenses

Previously, BusinessofCollegeSports.com showed you which schools spent the most on recruiting per data obtained from the Department of Education.  In reporting this data, BusinessofCollegeSports.com noted that imperfections exist within the data, but that the Department of Education data was the only publicly available source listing recruiting expenses for public and private institutions.

After that report was published, BusinessofCollegeSports.com followed up with several schools in an effort to obtain more accurate records of their recruiting expenses.  Georgia Tech Athletics’ Chief Financial Officer, Frank Hardymon, graciously detailed Georgia Tech’s recruiting expenses for BusinessofCollegeSports.com

Per data obtained from the Department of Education, Georgia Tech’s recruiting expenses were the 7th highest of all BCS schools in 2010-11.  In that year, Georgia Tech had total recruiting expenditures of $1,489,599.00, spending $1,173,904.00 on recruiting for its men’s sports and $315,695.00 on its women’s sports.  Georgia Tech’s total recruiting expenditures put it only behind those of Tennessee, Auburn, Notre Dame, Alabama, Georgia and Florida, when comparing data submitted to the Department of Education.

Hardymon was able to provide logical explanations as to why Georgia Tech’s recruiting expenses appeared higher than most other BCS schools.  In simplest terms, every school reports things differently.  Hardymon explained, “Everybody reports things differently.  Every school has different ways of doing accounting, so they show expenses under different categories.” 

Additionally, Hardymon explained that the items the Department of Education asks to be reported are not the same as what is required to be reported to the NCAA.  Thus, it is possible that a school’s revenues and expenses may appear to be different on each report.  “You can end up with two completely different bottom lines, which can lead people to question the quality of your accounting if you have two different totals,” said Hardymon. 

Furthermore, according to Hardymon, the Department of Education does not want athletics departments to report losses.  Thus, while the Department of Education report depicts many athletics departments having zero net income in 2010-11, it is possible that many of these athletics departments actually suffered a loss in 2010-11.  “Their theory is, if you had a loss, you’re still an operating entity, so somebody must have covered it for you.  They have us report the loss as if the school floated us the difference,” said Hardymon.  For athletics departments like Georgia Tech, which are a separate corporation from their university counterpart, this presents an issue, as the athletics department is solely responsible for any losses it incurs.

Hardymon noted that Georgia Tech is “very inclusive on recruiting” in terms of what the athletics department shows as a recruiting expense on its reports to the Department of Education and NCAA.  Part of Georgia Tech’s ability to inclusively report its recruiting expenses, is the result of the accounting system Georgia Tech uses.  Hardymon explained, “We are able to code a lot of things as recruiting.  So anything—even if it isn’t an immediate recruiting expense, but is going to turn into one, like buying envelopes, stationary and postage to be sent to recruits—is going to be listed as a recruiting expense.”   

Georgia Tech’s inclusiveness in reporting its recruiting expenses is likely what made its expenses the seventh-highest of all BCS schools in the Department of Education report.  While the Department of Education report only reports recruiting expenses as lump sum numbers, Hardymon provided BusinessofCollegeSports.com with an inside look of what some of the $1,489,599.00 spent by Georgia Tech on recruiting went toward.

First, the football program undertook an initiative to update the materials it distributes externally.  “Football makes a pretty strong commitment to communicate in writing with potential recruits,” said Hardymon.  According to Hardymon, “this initiative created $300,000.00 in expenses for the Athletic Association, which were categorized in football recruiting.”  It is important to note that the entire $300,000.00 was expensed towards recruiting in 2010-11, although some of the materials will be used for years beyond 2010-11.  Hardymon asserted that when “office-type expenses,” like the football program mailers were removed from Georgia Tech’s recruiting expenses, Georgia Tech’s recruiting expense total fell below $1 million.  Hardymon believes that this number is a more accurate representation of Georgia Tech’s recruiting expenses when compared to those of other programs.

The bulk of Georgia Tech’s recruiting expenses went towards travel costs.  In 2010-11, Georgia Tech spent $1,007,897.00 total on airfare, meals, hotels, entertainment, transportation, and development for on and off-campus recruiting.  The big-ticket item in Georgia Tech’s travel expenses for recruiting, though, is airfare expenses incurred by both basketball programs and the football program.  Hardymon said that while Georgia Tech does use a charter airline company, the company is relatively inexpensive and that the coaches also largely use commercial airlines to travel.  

 The numbers provided by Hardymon related to Georgia Tech’s recruiting expenses, along with his explanations as to why different athletics department’s expenses may seem vastly different, provided great insight into the budgetary concerns of a top athletics department.

Boston College Hockey’s National Championship Victory and Development Fundraising

In the last five years, Boston College has secured its spot as home of one of the most dominant Division I hockey programs.  In the last five years, the Eagles have won the Division I hockey championship three times.  Their most recent win came last weekend, when Boston College defeated Ferris State 4-1.

How has this surge in the hockey team’s prowess benefited fundraising for development?  Steve Novak is Boston College’s Assistant Athletics Director for Athletic Development.  When asked whether the recent Division I hockey championship would boost donations, Novak provided the following insight:

“Our hockey program has achieved such heights over the years that one year or one championship does not necessarily influence overall giving in a noticeable way.  However, I can certainly attest to the fact that the consistent performance and leadership under Jerry York has influenced any number of donors and/or gifts to BC Athletics.  We have seen several gifts directed to hockey over the years to support scholarships or other expenses.  Often, these donors cite the great pride they have when they root for BC Hockey.”

In an age in which football and basketball dominate the college athletics headlines–two sports which are present on Boston College’s campus–it speaks loudly to the talent of Boston College’s hockey team that a number of donors specifically direct funds to the hockey team’s development.

Given the hockey team’s frequent presence in the Frozen Four and national championship game in recent years, the question arises as to whether Boston College capitalizes upon the appearances as opportunities to fundraise.  Novak indicated that Boston College, “do[es] a lot of stewardship around special events like Frozen Fours or bowl games.  We have not chosen to do specific fundraisers.  It is more of an opportunity to say ‘thank you’ to those who helped us get to this point through their ongoing and past support.”

Along with funding scholarships for student-athletes, Novak and members of his athletics development staff fundraise to build new facilities or improve existing facilities.  In 2007, Boston College opened the doors to the $27 million Yawkey Athletics Center.  According to Novak, “This was the first building on campus to be 100% privately funded.”  Going forward, Boston College will break ground soon on a baseball and softball complex on its Brighton Campus.  Additionally, according to Novak, the athletics department “. . . also make[s] several facility improvements each year throughout our athletics facilities.  These otherwise ‘small’ items add up to be significant expenses.  However, it is extremely important to put our best foot forward.  The aesthetic improvement over the last several years is noticeable.  Athletics is certainly not the most important aspect of the University, but it often is the most visible.” 

The success of its hockey team and the work of its athletics department and development staff in recent years gives Boston College fans much to cheer about.

Howard University’s Suspension of Student-Athletes

Yesterday, the Washington City Paper reported that Howard University, a Division I school which competes in the Mid-Eastern Athletic Conference, “. . . suspended all of its intercollegiate athletics teams for what appears to be a violation of the NCAA rules.”

The magnitude of this announcement surprised many, as the suspension of an entire athletic program seemed drastic.  When it was announced that the entire athletics program had been suspended, one Division I compliance official who spoke to BusinessofCollegeSports.com on the condition of anonymity said, “I would speculate that the potential problems are department-wide and not necessarily limited to specific teams.”  This person further explained that, “Schools are supposed to police themselves and hold out student-athletes who are believed to have been involved with NCAA violations.”

Given this, I contacted Howard’s communications Director, Kerry-Ann Hamilton.  Hamilton responded as follows:

“Howard University is conducting an internal investigation of possible NCAA rules-violations. As a result of this process, the University temporarily withheld a number of student-athletes from competition as a self-imposed action.  Most teams will compete as scheduled. We are working diligently to fully resolve this matter as quickly as a possible. In order to protect the integrity of this review, we are unable to share additional details at this time.”

Thus, contrary to the Washington City Paper’s initial report, Howard did not suspend its entire athletics program.  Rather, it appears that Howard’s actions in this matter run the typical route of NCAA compliance, which requires internal investigations and self-policing.

Later yesterday afternoon, the Washington City Paper reported that a bowling team member said that the investigation was the result of textbook vouchers given to student-athletes.  Given that Howard is unable to share additional details, this has not been confirmed by BusinessofCollegeSports.com.

NCAA Bylaw 15.2.3 provides, “A member institution may provide a student-athlete financial aid that covers the actual cost of required course-related books.”  Per NCAA Bylaw 15.2.3.1, “There is no dollar limit for books a student-athlete may receive, provided each book is required for a course in which the student-athlete is enrolled. The institution may provide the student-athlete with cash to purchase books, as long as the amount of cash provided is equal to the actual cost of the books purchased.”

Thus, a potential NCAA violation may arise, if a student-athlete who is given a voucher to purchase books for classes he or she enrolls in, drops one of the classes for which he or she obtained a book using that voucher and then returns the book and holds onto the cash received. 

If book vouchers are given to every student-athlete, this is a situation which could potentially cause a large majority of student-athletes to be in violation of the NCAA bylaws.  Hence, this may provide some insight as to why it was initially reported that Howard had suspended its entire athletics department.

Ultimately, it is to be seen what the investigation unearths.  If the investigation was the result of student-athletes obtaining money from selling books, expect there to be large public outcry against the NCAA, and also further pushes for student-athletes to receive a higher cost of living allowance.