Playoffs not the answer to college football's financial crisis

[bluedog]

This opinion by Knight Commission co-chairs, William "Brit" Kirwan and R. Gerald Turner, was published in the December 19, 2009, edition of the Washington Post.

http://www.knightcommission.org/inde...id=1&Itemid=11

The college football bowl season begins today, with 34 games scheduled from Dec. 19 to Jan. 7. We expect to hear renewed calls from journalists, fans and politicians for a big-time college football playoff. A panel of the U.S. House Energy and Commerce Committee recently moved forward with legislation that is designed to change the current football postseason structure and force a playoff, leaving some with the impression that a playoff is the most important issue facing the 120 college presidents who control major college football. It is not.

The real crisis facing college athletics is the sustainability of its business model, which is on a path toward meltdown. The core of any debate about major-college football must be about the need to develop a business model consistent with the economic realities of our time and that would benefit student-athletes and educational institutions alike.

The 120 athletic programs that sponsor major-college football -- once known as Division I-A, now called the Football Bowl Subdivision or FBS -- comprise a multibillion-dollar enterprise. Despite the influx of significant revenue, including cash from bowl games, television contracts and ticket sales, nearly all programs are heavily subsidized by the universities through student fees, allocations from general funds and even state appropriations.

In the 2007-08 school year, nearly 80 percent of major athletic programs reported operating deficits, with programs in the red losing an average of $9.9 million, according to the National Collegiate Athletic Association. Add the recession, which has affected state appropriations and private giving at most colleges and universities, and college sports face unprecedented economic challenges.

A recent NCAA report noted that even football-generated revenue does not cover the operating cost of the football team at 44 percent of the institutions playing major-college football. Such figures would be worse if the millions in debt for stadium improvements and other facility enhancements were included. These are hardly profit centers at most institutions.

Now, consider all this in an environment where athletics costs are escalating at all but a few institutions while academic budgets are being cut and student fees and tuition are being raised. NCAA data show that the rate of increase in athletics spending in Division I programs is three to four times greater than the rate of increase for academic budgets. That is neither acceptable nor sustainable.

Whatever its other merits or disadvantages, a college football playoff would not solve these financial problems because without underlying reforms, added revenue would merely translate into higher coaches' salaries, facility expansions and more personnel. Recent history bears this out. Since the 12th football game was added permanently to the schedule in the 2006 season, only one additional football program has generated positive net revenue. Meanwhile, the average salary for head football coaches has increased 46 percent, to $1.36 million, according to a recent USA Today report, and the average budget deficit for 80 percent of the athletic programs has risen 11 percent, to nearly $10 million. ...

[SumItUp]

Playoffs or lack of playoffs did not create the crisis described. It is a SPENDING problem. Overspending is an issue for college athletic departments, the Federal government, state governments, local governments, your neighbor and probably most of us. Every time more revenue becomes accessible, spending jumps beyond the available means.

[Lehigh Football Nation]

More invented data for college presidents who are hell-bent on eliminating football to allow them to do so.

And - gee - when you read the linked report (http://www.ncaapublications.com/Uploads/PDF/Revenues_Expenses_10_208acb1ac8-caf1-42ad-9e1e-dc6c399c227b.pdf) and the actual numbers, you get (surprise) a very different view.


The Median Generated Revenues increased 17% from 2007 to 2008 but slightly less at 15% for the two years from 2006 to 2008. (2.1)
• The Median Total Expenses increased 5.5% from 2007 to 2008 and 16% for the two years from 2006 to 2008. The implication is that expenses are increasing at only a slightly faster rate than revenues.
(2.1) Much of this increase is due to a 15% increase in the cost of Grants in Aid.

...

A total of 25 FBS athletics programs reported Net Generated Revenues in 2008, up from 19 in 2006.

The 10c version is that the report concluded that the disparity between the "haves" and the "have nots" have continued to grow. If you were making money before, you're probably making money now, and if you were losing money, you're probably losing money now (but probably - and this is very important - because the price of grants/scholarships have increased (and, to a lesser extent, salaries have increased for coaches, especially at the FBS level).

What this fire-breathing report does not say is that six more FBS schools are now in the black that weren't in the black in 2006. But rather than try to figure out ways that would truly reduce athletics spending (reducing the price of higher education), they predictably make a straw man of football (note: not any other sport) instead.

The most interesting piece of information in the NCAA's report is that expenses have also gone up at I-AAA schools - not just FCS and FBS schools. What was the NCAA's conclusion as to why this was the case (remember, this is I-AAA, non-football schools)?


The two line items of Grants-in-Aid and Salaries make up 61% of total expenses for the subdivision. Salaries and Benefits comprise 32% and Grants-in-Aid 29%. Thus, as in all subdivisions, the efforts to control athletics costs are frustrated by a lack of control over
the largest two expense lines, both of which are market driven. No other expense line item is significant. (5.15)

****

It seems odd that all this month I've been spending time parrying fire-breathing rhetoric with facts. This Kinght press release falls in the fire-breathing category.

[FCS_pwns_FBS]

I wonder how much more favorable the bottom line would be if colleges could exempt football scholarships from being counted as male scholarships in Title IX counts. Let's face it - football games are a part of the college culture and men's basketball is the only other sport that comes close and the reasoning behind T9 totally goes out the window when you consider the usefulness of a football program. But of course, that won't happen. God forbid we let common sense trump feel-good political correctness anymore. xcoffeex

[49RFootballNow]

How about we limit FBS and FCS scholarships to 50 and 35 respectively, and allow partials scholarships for ALL levels of football? The next nearest sport is Rowing (women, 20 partial scholarships).

[UNH Fanboi]

The entire premise of this editorial is retarded.

First of all, whether or not the cost of football is a "problem" can only be determined by each university individually. Moreover, the fact that football loses money at any given school does not automatically mean that there must be a problem with football at that school. A lot of university programs lose money. Students pay tuition and alumni donate money with the intention of it being SPENT for the benefit of the students, not so that they can generate a profit like a corporation. Does the English department generate a profit? Does women's volleyball generate a profit? There's no objective reason for why football should be held to a different standard. The question that universities need to ask is whether the amount of money that gets spent on football is worth it. Again, that is a question that only the university can answer itself, and is really none of the NCAA's business.

Secondly, the argument that a college football playoff system would "solve" schools' financial problems is a total strawman. No reasonable person has ever suggested that a playoff system would suddenly allow every school to turn a profit at football. Rather, the primary argument for a playoff is that it is the most fair way to declare a national champion, and is also the way that nearly every other sport on the planet determines a champion.

[MR. CHICKEN]

Playoffs or lack of playoffs did not create the crisis described. It is a SPENDING problem. Overspending is an issue for college athletic departments, the Federal government, state governments, local governments, your neighbor and probably most of us. Every time more revenue becomes accessible, spending jumps beyond the available means.

HOW MANY DIFFERENT UNIFORMS....DOES OREGON NEED.....TA PLAY PIGGY...xconfusedx......BRAWK!

[Lehigh Football Nation]

Secondly, the argument that a college football playoff system would "solve" schools' financial problems is a total strawman. No reasonable person has ever suggested that a playoff system would suddenly allow every school to turn a profit at football. Rather, the primary argument for a playoff is that it is the most fair way to declare a national champion, and is also the way that nearly every other sport on the planet determines a champion.

Irony of ironies, though, think of it this way. A football scholarship is spent money, so whether there is a playoff or not the costs of a football program are fixed. However, with a playoff system at home sites (like in FCS), the schools would get, possibly, near-sellout ticket sales in extra home games. Costs stay flat, while ticket sales would increase. Simple economics says that the schools in the playoffs (with home games) would improve their bottom line, not make it worse. xwhistlex

[UNH Fanboi]

Irony of ironies, though, think of it this way. A football scholarship is spent money, so whether there is a playoff or not the costs of a football program are fixed. However, with a playoff system at home sites (like in FCS), the schools would get, possibly, near-sellout ticket sales in extra home games. Costs stay flat, while ticket sales would increase. Simple economics says that the schools in the playoffs (with home games) would improve their bottom line, not make it worse. xwhistlex

I realize that, but teams that are losing the most money though are probably not teams that would be making the playoffs.

[Big Al]

Irony of ironies, though, think of it this way. A football scholarship is spent money, so whether there is a playoff or not the costs of a football program are fixed. However, with a playoff system at home sites (like in FCS), the schools would get, possibly, near-sellout ticket sales in extra home games. Costs stay flat, while ticket sales would increase. Simple economics says that the schools in the playoffs (with home games) would improve their bottom line, not make it worse. xwhistlex

Shhhh. You're talking sense.