WaPo: Maryland Athletics Reveal Broken Revenue Model

[Lehigh Football Nation]

Required reading for anyone who still believes FBS football is the solution to any schools' financial needs:

http://www.washingtonpost.com/sports/colleges/maryland-athletics-financial-woes-reveal-a-broken-college-sports-revenue-model/2012/06/28/gJQAmEvx9V_story.html


With its multimillion-dollar deficit mounting and no deep-pocketed donor to cover the shortfall, the University of Maryland’s athletic department will proceed with plans to cut at least seven of its 27 varsity teams this weekend. The downsizing is an attempt to correct an unsustainable pattern many households know well: Spending more than you earn.

In this environment, a downturn in ticket sales, coupled with a heavy debt burden, can be catastrophic. At Maryland, those factors converged in a perfect storm in recent years. The school’s athletics department deficit, now $4.7 million, is projected to reach $17.6 million by 2017 if not addressed.

Athletic Director Kevin Anderson, who was hired two years ago, says Maryland’s student-athletes have been under-served as a result of the athletic department’s chronic operating deficits and deserve better.

“I did not come to the University of Maryland to cut sports,” he said, “but dire situations require decisive action.”

If Maryland, a BCS-level, Final Four Tournament-level school is having such catastrophic problems, one can only wonder that the issues that, say, a Western Kentucky has, with none of those revenue streams but similar pressures on the athletic department in terms of facilities, salaries, etc.

[Bogus Megapardus]

I wonder if this is reflective of the fact that Lafayette College just hired a high-priced bean counter (and former NFL Controller) to oversee the finances of our athletic department. Are we going to start cutting away at our 23 Division I sports? We'll wind up looking like that sad-sack American U. - the "member" of the PL that everyone forgets about. No baseball, no lacrosse, no football. What do they play?

http://www.goleopards.com/genrel/062112aaa.html

[MplsBison]

Troll post. Taking another swipe at I-A football,using an article that is a reach at best to do with it, and bashing schools who move up.

First off, unless you're one of a handful of programs -- FOOTBALL in general is not a solution to any schools financial needs. And if not I-A, then most certainly not I-AA. I-AA football on average is much more of a money pit for the schools who fund the sport at the level it deserves.

The point is to have a football team, because that's what students and alumni want. No other reason.


Secondly, Maryland has way too many sports. 27 is ridiculous. And that's what the article was about.

Texas has the best modal, minimum number of sports that they focus on doing well and fully funding.

[Lehigh Football Nation]

Texas has the best modal...

This just deserves to be highlighted and attributed to the rightful author.

Now about the rest of his bla bla bla... so, the only thing all Division I schools need to do is emulate Texas, and then their funding issues go away? Good luck with that. Oh, incidentally, Texas' football program and TV network fund all the rest of their sports, so you say for everyone else to emulate Texas right after you say, "Football in general is not a solution to any schools financial needs".

You need serious mental help. End.

[DFW HOYA]

This article is less about cutting sports than the egregiously poor decisions made by Maryland officials over the past decade, including:

1. Spending $51 million to build luxury boxes at Byrd Stadium despite a consultant's report advising them that the regional market was oversaturated and the revenue would not be there (see FedEx Field, Nationals Park, Verizon Center, M&T Bank Stadium, and Camden Yards). Five years after it's opened, the Byrd Stadium vacancy rate remains at 33% and Maryland may not be able to meet debt payments on the project next year (which is why the sports are being dropped). More is now spent on accumulated debt than any single sport on the budget.

2. Spending $3 million for a new artificial turf for Byrd Stadium when everyone else pays about $750K for the same surface. The amount could have funded five of the seven cut sports.

3. An annual deficit of $4 million per year that is projected to reach $ 17 million in five years.

4. Forcing out the 2010 ACC Coach of the Year (Ralph Friedgen) following a 9-4 season and passing over the coach in waiting (James Franklin, now the coach at Vanderbilt) for the AD's own choice, Randy Edsall (career record: 74-70), signing him to a six year, $12 million guaranteed contract. Edsall's first year: 2-10.

4. Pushing the school's winningest basketball coach (Gary Williams, 2002 NCAA titleist) into early retirement and paying his replacement, Mark Turgeon, the second largest contract of any ACC basketball coach. Turgeon's first year: 17-15, no post season.

5. Increasing funding on basketball despite a 33% decline in revenues.

6. Increasing funding on football despite a 50% decline in revenues.

[frozennorth]

sounds like a really poorly run department, and those luxury boxes are probably 80% of the problem.

[MplsBison]

This just deserves to be highlighted and attributed to the rightful author.

Now about the rest of his bla bla bla... so, the only thing all Division I schools need to do is emulate Texas, and then their funding issues go away? Good luck with that. Oh, incidentally, Texas' football program and TV network fund all the rest of their sports, so you say for everyone else to emulate Texas right after you say, "Football in general is not a solution to any schools financial needs".

You need serious mental help. End.

Troll post number 2 in a troll thread created by a troll.

You knew damn well that's not what I meant. Knew damn well and you pretended different anyway. You're the king of this fallacy: pretend that the point of the post you're replying to is something completely different than the actual point being made and then reply to this fake point - in an attempt to distract people from the actual point and derail the discussion.


When I said Texas has the correct model, I went on to give the correct context which you conveniently cut off before going on your pretend rant.

I was talking about the number of varsity sports they sponsor. Not a single iota more.

But hey, if taking people completely out of context and then lying makes you feel closer to being a real journalist, go right ahead.

[MplsBison]

This article is less about cutting sports than the egregiously poor decisions made by Maryland officials over the past decade, including:

1. Spending $51 million to build luxury boxes at Byrd Stadium despite a consultant's report advising them that the regional market was oversaturated and the revenue would not be there (see FedEx Field, Nationals Park, Verizon Center, M&T Bank Stadium, and Camden Yards). Five years after it's opened, the Byrd Stadium vacancy rate remains at 33% and Maryland may not be able to meet debt payments on the project next year (which is why the sports are being dropped). More is now spent on accumulated debt than any single sport on the budget.

2. Spending $3 million for a new artificial turf for Byrd Stadium when everyone else pays about $750K for the same surface. The amount could have funded five of the seven cut sports.

3. An annual deficit of $4 million per year that is projected to reach $ 17 million in five years.

4. Forcing out the 2010 ACC Coach of the Year (Ralph Friedgen) following a 9-4 season and passing over the coach in waiting (James Franklin, now the coach at Vanderbilt) for the AD's own choice, Randy Edsall (career record: 74-70), signing him to a six year, $12 million guaranteed contract. Edsall's first year: 2-10.

4. Pushing the school's winningest basketball coach (Gary Williams, 2002 NCAA titleist) into early retirement and paying his replacement, Mark Turgeon, the second largest contract of any ACC basketball coach. Turgeon's first year: 17-15, no post season.

5. Increasing funding on basketball despite a 33% decline in revenues.

6. Increasing funding on football despite a 50% decline in revenues.


If spending on the football and men's basketball teams isn't in line with the top ACC programs, then 5&6 are the correct decision.

You can't win if you don't spend at least as much as the teams in your conference. You can't run it like a hot dog stand. Not when revenue is so directly linked to wins and losses with schools that aren't historical champions.

The coaching decisions...meh. Too easy to bash them over those moves without knowing the real, inside info on what went down. Maybe they were indeed botched jobs. Not saying they weren't.

Point 3 doesn't make any sense and I would argue is probably a mistake. Point 2 also doesn't make any sense unless they're installing the same brainless rolling pin design that the Fargodome uses. Doubtful.


Premium seating is absolutely the correct move. It's a necessity in today's big football stadiums to increase revenue. They'll get filled eventually and the revenue coming in will shut-up all the accountant squawking, which is all this sounds like.

[DFW HOYA]

If spending on the football and men's basketball teams isn't in line with the top ACC programs, then 5&6 are the correct decision.


Can't find a good football number (some schools bake in the TV revenues, others don't), but Maryland's BB expenses ($10.5 million) are 4th out of 344 Div. I schools in 2010, trailing only Kentucky, Duke, and Louisville.

But to keep this subject viable on this board for I-AA purposes, it bears watching how schools commit funds to football coaches and whether the trap of guaranteed contracts is a help or a hindrance. How many I-AA coaches have guaranteed contracts?

[MplsBison]

No....no. There was never any relevance to I-AA in this thread.

It was a big time reach just to bash I-A and those schools considering a move up, if nothing else just to gain political favor with that wing on this board who agree with that sentiment.


Your point on guaranteed contracts is a valid one, but completely beside the supposed purpose of this thread (to disprove that moving to I-A guarantees financial success). As I've already said, if you're not already making money playing college football -- there isn't a move you can make that will change that. Therefore, moving to I-A would be a purely ideological move to the premier level of college football and representing the school as a top institution.

[Lehigh Football Nation]

You knew damn well that's not what I meant. Knew damn well and you pretended different anyway. You're the king of this fallacy: pretend that the point of the post you're replying to is something completely different than the actual point being made and then reply to this fake point - in an attempt to distract people from the actual point and derail the discussion.

I'd make the obvious move to try to unravel this spaghetti statement... but, man, this is damned funny. xlolx xlolx xlolx xlolx xlolx

[Lehigh Football Nation]

No....no. There was never any relevance to I-AA in this thread.

It was a big time reach just to bash I-A and those schools considering a move up, if nothing else just to gain political favor with that wing on this board who agree with that sentiment.

Your point on guaranteed contracts is a valid one, but completely beside the supposed purpose of this thread (to disprove that moving to I-A guarantees financial success). As I've already said, if you're not already making money playing college football -- there isn't a move you can make that will change that. Therefore, moving to I-A would be a purely ideological move to the premier level of college football and representing the school as a top institution.

Being in FBS does not guarantee success. Being in a conference that's affiliated with the BCS is also not a guarantee of success. This article simply reinforces this point in graphic detail, with a specific example: Maryland. Therefore, I've proven my point. Prove me wrong.

Still fantasize that it's all unrelated to football? 1,2,3,4 and 6 of DFW's points are directly football-related. Prove to me otherwise.

[BlueHenSinfonian]

If spending on the football and men's basketball teams isn't in line with the top ACC programs, then 5&6 are the correct decision.

You can't win if you don't spend at least as much as the teams in your conference. You can't run it like a hot dog stand. Not when revenue is so directly linked to wins and losses with schools that aren't historical champions.

The coaching decisions...meh. Too easy to bash them over those moves without knowing the real, inside info on what went down. Maybe they were indeed botched jobs. Not saying they weren't.

Point 3 doesn't make any sense and I would argue is probably a mistake. Point 2 also doesn't make any sense unless they're installing the same brainless rolling pin design that the Fargodome uses. Doubtful.


Premium seating is absolutely the correct move. It's a necessity in today's big football stadiums to increase revenue. They'll get filled eventually and the revenue coming in will shut-up all the accountant squawking, which is all this sounds like.

While your other points may hold some water, the bolded one doesn't. If Maryland actually paid a consultant to study the marketability of the suites and that consultant said that the business model was flawed, and now the take-rates on those suites is failing to meet expectations, it seems like it was a bad decision. College Park isn't Fargo, Missoula, or Boone. There are two NFL teams right next door, another just up the road, and the Naval Academy in the backyard. College Park is half an hour from DC, the vast majority of people with money in that area are heavily politically involved, they are going to go for the broad appeal of NFL seats or the patriotic appeal of Navy seats to impress clients and/or associates.

[frozennorth]

While your other points may hold some water, the bolded one doesn't. If Maryland actually paid a consultant to study the marketability of the suites and that consultant said that the business model was flawed, and now the take-rates on those suites is failing to meet expectations, it seems like it was a bad decision. College Park isn't Fargo, Missoula, or Boone. There are two NFL teams right next door, another just up the road, and the Naval Academy in the backyard. College Park is half an hour from DC, the vast majority of people with money in that area are heavily politically involved, they are going to go for the broad appeal of NFL seats or the patriotic appeal of Navy seats to impress clients and/or associates.

also BB school. this isn't michigan here.

[MplsBison]

I'd make the obvious move to try to unravel this spaghetti statement... but, man, this is damned funny. xlolx xlolx xlolx xlolx xlolx

Cat got your tongue.

Thanks for confirming that I caught you in the act.

[MplsBison]

Being in FBS does not guarantee success. Being in a conference that's affiliated with the BCS is also not a guarantee of success. This article simply reinforces this point in graphic detail, with a specific example: Maryland. Therefore, I've proven my point. Prove me wrong.

Still fantasize that it's all unrelated to football? 1,2,3,4 and 6 of DFW's points are directly football-related. Prove to me otherwise.

You never had a point and so you're not correct. You've proven nothing. Bashing I-A using any means necessary was your only intent, for popularity's sake.


DFW points do apply to college football, but not specifically to I-AA. Hence I was correct when I stated this thread has nothing to do with I-AA (and should be moved to another forum).

[MplsBison]

While your other points may hold some water, the bolded one doesn't. If Maryland actually paid a consultant to study the marketability of the suites and that consultant said that the business model was flawed, and now the take-rates on those suites is failing to meet expectations, it seems like it was a bad decision. College Park isn't Fargo, Missoula, or Boone. There are two NFL teams right next door, another just up the road, and the Naval Academy in the backyard. College Park is half an hour from DC, the vast majority of people with money in that area are heavily politically involved, they are going to go for the broad appeal of NFL seats or the patriotic appeal of Navy seats to impress clients and/or associates.

Then why are the suites 66% sold? Someone is buying them.

I can't fathom why people are acting like if the suites don't sell in the first couple years then they evaporate into thin air. They'll still be there, waiting for another customer to come along.

Someone will buy them, eventually. They're a tax write off (I think...don't quote me on that one) and they're great for businesses to hold and give the tickets to sales and other groups as rewards for a good project (etc.).

And once they're all sold, the revenue they bring in will be many times more than the revenue that regular seating can bring in. It's absolutely a necessity and the higher up you go the more so it's needed. Maryland is just a half step down from the highest level of college football. It was absolutely the right move.

[Lehigh Football Nation]

Being in FBS does not guarantee success. Being in a conference that's affiliated with the BCS is also not a guarantee of success. This article simply reinforces this point in graphic detail, with a specific example: Maryland. Therefore, I've proven my point. Prove me wrong.

Still fantasize that it's all unrelated to football? 1,2,3,4 and 6 of DFW's points are directly football-related. Prove to me otherwise.


You never had a point and so you're not correct. You've proven nothing. Bashing I-A using any means necessary was your only intent, for popularity's sake.


You knew damn well that's not what I meant. Knew damn well and you pretended different anyway. You're the king of this fallacy: pretend that the point of the post you're replying to is something completely different than the actual point being made and then reply to this fake point - in an attempt to distract people from the actual point and derail the discussion.

I wish I could say I'm surprised by Mpls' favorite ploy, but I'm not.

[Lehigh Football Nation]

I can't fathom why people are acting like if the suites don't sell in the first couple years then they evaporate into thin air. Someone will buy them, eventually.

Please, write the chancellor of University of Maryland with your thoughts. I'm sure they'd get some sort of hearing - how their deficits in their athletic department are all fictional, as secretly, they're in the black, because in a few years, they'll be selling out!

Think of what a hero you will be to those hundreds of Terp athletes whose programs are now saved!

[MplsBison]

Please, write the chancellor of University of Maryland with your thoughts. I'm sure they'd get some sort of hearing - how their deficits in their athletic department are all fictional, as secretly, they're in the black, because in a few years, they'll be selling out!

Think of what a hero you will be to those hundreds of Terp athletes whose programs are now saved!

You didn't even read the article. I'm not surprised.

The headline must've just caught your eye and you jumped at the chance to post something that looked reasonable as a way to bash I-A as the AGS populist you are.

[MplsBison]

Thought this thread has absolutely nothing to do with I-AA and should therefore be moved to another forum, I thought this part of the article (it was on the last page, so no doubt LFN never read it) would be an interesting discussion and would apply to I-AA:


That leaves two options for substantive change — both of them political and neither particularly palatable.

One: Persuade Congress to grant an antitrust exemption that would permit the NCAA to cap spending — whether on coaches’ salaries, scholarship costs or recruiting.

Two: Wait until the headlong rush for more money becomes so nakedly transparent that the Internal Revenue Service declares college sports a for-profit enterprise and revokes its tax-exempt status.

Of those two options, no one - and I mean no one - wants option two. It would be a fight to the death, with members of the US congress rushing to the fight on both sides.

But on the other hand, until it actually happens, how does the NCAA gain enough guns and knives, so to speak, as to implement option 1???


And I absolutely DO think option 1 is correct and should be implemented, in addition to the scholarship limits that the subdivisions have now.

Something like the following is reasonable in my opinion:

I-A: yearly football budget can not be more than $10 million
I-AA: yearly football budget can not be more than $3 million
II: yearly football budget can not be more than $1.5 million
III: yearly football budget can not be more than $0.75 million


Because no doubt the increase in revenue that the big schools will see from the addition TV money generated by the I-A playoffs is just going to further inflate coaching salaries.

Cap the spending and the max number of scholarships and let the schools decide what's more important: $4 million for a head coach or spending an extra million on debt service for a facility upgrade.


There would obviously have to be a standard agreed upon for what line items go under the football budget as well. These are the correct items IMO: football coaching staff salaries, non-coaching staff salaries that directly or mostly support the football team (trainers, video, equipment, strength, secretaries, etc.), equipment costs, debt service on facilities entirely or mostly used by the football team, operating costs, football recruiting costs, football travel costs.

[Bogus Megapardus]

Cat got your tongue.

Thanks for confirming that I caught you in the act.

I'm sure that LFN really would like to reply to you in a thoughtful manner. I really am. But he first would have to comprehend the meaning of what you are attempting to relate. I certainly can't.

It strikes me, MplsBison, that your fellow North Dakota State posters - while zealously partisan and unquestionably enthusiastic - are rational, articulate and well-informed on this board. I'm not certain how those latter qualities managed to escape you (if indeed you actually were graduated form the same institution) but perhaps you could seek counsel and mentoring from some of your fellow Bison.

Not only might you learn something, but people might actually stop looking at you "that way" when you show up at the tailgate or barbeque. In fact, they might even invite you next time.

[MplsBison]

I'm sure that LFN really would like to reply to you in a thoughtful manner. I really do. But he would first have to comprehend the meaning of what you are attempting to relate. I certainly can't.

It strikes me, MplsBison, that your fellow North Dakota State posters - while zealously partisan and unquestionably enthusiastic - are rational, articulate and well-informed on this board. I'm not certain how those qualities managed to escape you (if indeed you actually were graduated form the same institution) but perhaps you could seek counsel and mentoring from some of your fellow Bison.

Not only might you learn something, but people might actually stop looking at you "that way" when you show up at the tailgate or barbeque. In fact, they might even invite you next time.

Maybe they already have and just didn't know it was me in real life? xnodx

[Bogus Megapardus]

Maybe they already have and just didn't know it was me in real life?

I considered, and rapidly dismissed, that possibility.

[MplsBison]

No one wants to discuss spending caps for the divisions? I think that's a worthwhile discussion.

[MplsBison]

I considered, and rapidly dismissed, that possibility.

You never know! In fact, maybe I've already met you in real life?????

[344Johnson]

No one wants to discuss spending caps for the divisions? I think that's a worthwhile discussion.

Every school should have the right to spend as they want with the exception of scholarships. That needs to be the same.

[DFW HOYA]

Every school should have the right to spend as they want with the exception of scholarships. That needs to be the same.

Every scholarship is not the same. A full year's tuition at Florida Atlantic is $2,694. At Bucknell, $38,134.

[dbackjon]

It is really sad that a potentially decent thread is ruined by MplsBison's irrational posts.

Talk about a troll

[MplsBison]

Every scholarship is not the same. A full year's tuition at Florida Atlantic is $2,694. At Bucknell, $38,134.

Fair enough - take scholarship costs out of the equation then.

It's not like scholarship costs are what's breaking the bank. Those are more or less fixed. And we already have scholarship caps to keep them there anyway.

But things like facility spending and especially coaches salaries and just going to inflate more and more as the money continues to grow from TV.

So cap it.

[MplsBison]

Every school should have the right to spend as they want with the exception of scholarships. That needs to be the same.

Disagree.

Not because I'm opposed to the "natural" order in the sense of the free market. And not because I want to save non-revenue sports that are being cut. Not at all.


I think it's time to just take a deep breath, pump the brakes a little bit and put a cap on for the 12 year cycle of the new playoffs. Let's see where the playoff gets us in terms of revenue from TV, etc. during that time. If there's an obvious need to increase the cap at the end of it, then fine.

But for the most part, I think $10 million is still more than enough for the haves to keep having.

Any more than that is just going right to head coach salary inflation among the top of the top schools who simply don't care if they have to pay $10 million a year to a coach if it gets them a national championship.