More money than sense

This Washington Post article tries to present the University of Maryland as some sort of poster child for what’s wrong with college athletics’ financial model, but what really jumps out at you is the epic level of dumbassery on display running the department – running it into the ground, as the school is in the midst of dropping eight programs to compensate for the deficit it’s running.

Convinced its football stadium was too small and its basketball arena too outmoded for its fan base, Maryland over the past decade expanded Byrd Stadium and added luxury suites, and built the Comcast Center. At the time of construction, officials said the upgrades would pay for themselves through a jump in ticket revenue. Instead, Maryland’s football and basketball teams have struggled, and attendance and revenue have dropped.

As a result, spending on buildings and grounds has soared nearly 78 percent over the past five years, from $4.6 million to $8.2 million, according to data supplied to the NCAA. Debt service on the construction projects alone totals $7.9 million this year — up from $6.9 million in 2010-11. That’s more than 11 percent of Maryland’s athletic department budget, and the figure escalates each year like bad credit-card debt.

That’s just one line-item in a Maryland athletics operating budget that increased 24 percent over the last five years, from $49.5 million in 2005-06 to $61.6 million in 2010-11. Spending on the Terrapins’ coaching staff climbed at an even higher rate, rising nearly 30 percent, from $18.7 million to $24.3 million.

Meanwhile, total revenue increased only 15 percent, from $53.6 million to $61.6 million in the same span.

Not exactly great bang for the buck there.  And here’s the punch line:  “And, for the first time since the NCAA financial reports have been required, Maryland football actually lost money in 2010-11…”  So this isn’t a situation where there’s some sort of structural flaw in place that’s doomed the athletic department from the beginning.  Instead, Maryland is now faced with paying the price for a series of bad decisions.  Decisions, by the way, that are still going on while the financial bleeding continues apace.

So, too, is the $500,000 in guaranteed annual compensation that Maryland is paying its new offensive coordinator, Mike Locksley, hired in January to help turn around a football team that finished 2-10 last season. And the $3 million cost of the new synthetic turf football field at Byrd Stadium could fund five varsity teams for a year. Maryland has declined to identify the private donor who footed the bill for the field.

You’ve got to be impressed with their consistency.

None of this is to say that there isn’t an overall issue with haves and have-nots in D-1 athletics.  Ask almost any school without a football program capable of generating significant revenue about that.  But that shouldn’t excuse Maryland from having to manage its athletic department sensibly.  And it definitely shouldn’t justify the inevitable pleas for outside help, like these:

So what’s the remedy for college sports’ spending compulsion?

The Knight Commission, a group of university presidents, trustees and former athletes who advocate for reform in college sports, offered a road map in a 2010 report, “Restoring the Balance: Dollars, Values and the Future of College Sports.” In it, the panel recommended the NCAA require colleges to publish the true cost of their athletic programs in comparable, complete terms, reflecting not only revenue and expenses but also the often-hidden debt service on facilities and subsidies from their universities’ general funds.

It also proposed that the NCAA cap the number of “non-coaching” jobs on certain teams — an expense that has ballooned in football, for example, with the addition of directors of football recruiting, operations, player development and strength-and-conditioning coaches for every position. And it recommended the NCAA reduce the number of football scholarships allowed by at least 10 from the current 85.

To date, none of those recommendations has gained traction.

“The people who could and should be responsible for fixing what almost certainly is going to be a train wreck are either unwilling or unable to do it,” Nichols said. “Unless you assume that television money is a bottomless pit — and there are no limits to the amount of money that television networks will invest — there is going to be a day of reckoning.”

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.

While you’re at it, they’d like a pony, too.