Andy Schwarz looks at the report UAB’s president relied on in deciding to terminate the school’s football program and eviscerates it.
The reason I keep coming back to this story is because I feel fairly certain it’s going to be used to justify all kinds of bullshit in college football’s name. And that’s nonsense. As Schwarz puts it,
Why does this matter? Because it puts to lie the ludicrous notion that if the Alabamas of the college football world keep making more and more money—and potentially spend more and more of it on elite players—UAB and its ilk will have to drop the sport. Nonsense.
We wouldn’t expect a mom-and-pop store that has grown from $1.4 million to $6.5 million in annual revenues (which is what the typical school in the bottom quartile of the FBS has experienced) to go belly up just because a big box store across town grew from $24 million to $58 million (what the typical upper quartile FBS school has experienced) in the same time frame, nor would we expect the mom-and-pop to keep pace with what the big box spends on marketing and employee bonuses. Why would UAB, or any other mid-major football school, be different? The Blazers don’t compete against the Crimson Tide or the rest of the SEC for the very best high school recruits; they compete against the rest of C-USA, against schools that choose to spend about as much on football as they do.
You don’t need to outrun a hungry bear. You just need to outrun the guy sprinting next to you. (Moreover, in UAB’s case, it should do just fine against its C-USA competition just by positioning itself as a great place to transfer in the event that Nick Saban decides you’re good enough to break second-string on Alabama’s depth chart.)
There are plenty of reasons to poor mouth your finances. For UAB, it’s a convenient way to get around facing tough questions about the politics of its board. And if you’re college football? Well…
On a larger scale, this same sort of hide-the-profits accounting is—in my experience—all too common in college sports. It’s the kind of financial trickery that allows a swimming-in-the-black industry enjoying billions more in revenues than expenses to claim that more than 80 percent of FBS schools lose money on sports, the better to seek exemptions (via the federal courts or Congress) from the laws (antitrust or labor) that require all other entertainment industries to pay their talent free-market wages. Whether the school is trying to fool outsiders with its funny numbers or just managed to fool itself is hard to say, but one thing is certain: bad accounting drives bad decisions.
Ask yourself a simple question: if things are really so tough, if UAB is the canary in the coal mine, so to speak, why are more schools seeking to start football programs, or move up to Division I?
23 responses to ““Cost is not value. Cost is cost.””
Ludicrous as it seems, I believe this to be an attempt to drive up enrollment at the main UA campus. As has been explained in other places UAB makes most of its lettuce from the medical school and hospital. Its undergraduate programs are mostly along for the ride.
Ray Watts sent out an email this past weekend in response to rumors that UAB is cutting their undergraduate program altogether (he says unequivocally that they are not). The school from which I received my graduate degree just added their undergraduate program last year, but it’s also one that’s not available anywhere else in the state, so it’s not competing with UA at all.
OK … I guess. Let’s see where we wind up 10 years down the road.
Yep, some web site called “Vice Sports” has broken the code, sliced through all of the fuzzy math and cut the Carr report off at the knees. I feel a lot better this morning.
UAB football was a black hole. Whether or not Paul Jr. had an ax to grind or not, at the end of the day, there’s not, in my opinion, a justification to keep pouting money down this pit.
Also, I’m pretty sure real dollars are moved around as tuition, fees, etc. are paid (though I could be wrong about this.)
Have a good day,
BD, feel free to deride Vice Sports – I know nothing about the site – but, like it or not, Schwarz is qualified to speak on the subject.
He has issues with what the university isn’t saying; I have issues when he claims there is no facilities cost to the university and doesn’t address future expectations.. After the most cursory of glances it’s evident that a key aspect of the report is anticipated costs to “sustain competitiveness.” We’re expected to believe that not having your own stadium, not having an admin building for football, and not having a practice facility are acceptable in FBS? I think the “why kill it it actually IS making a profit” is the bigger question. Is it possible the university just didn’t want to face raising the money for the upgrades in question when the program is not supported (by the state, by its fans, by the general public, by the ABOR) at a higher level now?
Well, I’m not an expert like Schwarz, but he lost me right here:
“what really matters is the actual cost to UAB, a school of 19,000 students, of having 85 scholarship football players on campus. That cost is pretty close to zero.”
Relatively speaking, it is.
Maybe in the land of trial lawyers and consultants.
Athletic departments are charged for scholarships and fees. He can argue the numbers are fluffed or whatever, but that doesn’t mean he’s right and that doesn’t mean the school doesn’t receive credit for those funds.
There are also a few other expenses, like salaries, travel, insurance, food, etc. that go along with those 85 folks.
Scholarships and fees go in one pocket and out the other.
There are expenses, but in the context of a billion dollar institution, they’re drops in the bucket.
Look, if you’re right, there will be plenty of other schools following UAB’s path soon. I just think Schwarz is more right on this than you are…
Right. I have to look no further than Kennesaw State to see that there’s a line of schools that are either moving into or moving up into collegiate football. For what reason? Prestige? The student experience? Damnifiknow. I know KSU is a commuter school with a nice stadium that was supposedly built for women’s soccer, that’s a laugh, that’s now moving into CFB. How they’re going to pay for it? No idea. I know they’re doing it with Brian Bohannon as the HBC. It’s the new feather in their cap.
You’re mixing your arguments up, Senator. Or perhaps, I’m straining too hard. 🙂
I’m not arguing drops in the bucket. I’m just saying that I think they are expenses and that athletic departments are charged something for these expenses.
I found a financial statement audit report for a Big 12 school’s athletics department and gave it the ol look see. Granted, these things aren’t easy to ready, but it was pretty easy to see where the athletic aid was counted as an expense, but not so easy to see where it was added back as a non-cash type item.
I can’t believe I’ve wasted this amount of time on something related to UAB football. 🙂
Have a good day,
I suspect that the cost of the scholarship was paid back to the school n the form of tuition paid to itself, payments to the food services for board, payments to university housing for room and payments to the university bookstore for books. If UAB gets 40 walk-ons as SEC teams does then UAB has additional tuition income from 40 males students it may not otherwise have. The marginal cost of educating, outfitting and coaching those extra 40 walk-ons would be a lot less than the full tuition they pay. Those walk-ons offset bout half of the scholarships right there.
Sure, there are expenses such as athletic department salaries. A lot of those expenses are subsidized. The conference writes a nice sized check. Nike, or Reebok or Russell provides equipment for free and pays the school to clad their outfits with the logo. Nike will not pay UAB as much without football.
If football is a losing proposition below the power 5 then a bunch of fbs teams would be scrambling to the fcs. It isn’t happening. Instead, in our state, Georgia Southern and Georgia State both invested in going fbs for a reason.
Auburn laughs at your quaint notions of financial statements. Their’s is a CASH business my friend!
It’s ok to admit it’s just Alabama politics and a butt hurt Bryant Jr. driving the bus on this. No way UAB is leaving over money. The President there wants to keep his good name and pension so he’s doing as told. Shit, I’m from Louisiana where EVERYTHING is political.
You can bet presidents and boards of similar schools are eyeing the UAB decision and wondering if they could get away with it.
Looking at the lowballing of coaches and facilities, it appears the program the University System of Georgia wants to kill is the one in Athens.
No, if they are fcs or below they are looking at the Georgia State decision and wondering if they can get away with it.
Take it from a 7-year UAB employee and Birmingham resident: UAB’s “decision,” to the extent that you can even say it was theirs, is due solely to the UABOT being dominated by people with allegiance to Tuscaloosa, who have never made their peace with the concept of the UA system having more than one football team. They hated it in ’91 and they hate it to this day.
Look at the contrast between Georgia and Alabama (the states, not the football programs). The University System of Georgia encompasses 31 public schools, from the flagship state school to smaller schools, HBCUs and a medical college. UGA has by far the highest representation on the Board of Regents (9 out of 16 members are grads), but that hasn’t stopped two schools in the Georgia system, Georgia State and Kennesaw, from creating football programs in the past five years with the intention of competing at the D-I level (and that’s in addition to a private school, Mercer).
In Alabama, though, the University of Alabama Board of Trustees is only responsible for three schools — Tuscaloosa, Alabama and Huntsville — and 13 of its 17 members hold degrees from Tuscaloosa (two of them have Bama undergrad degrees and M.D.s from the med school at UAB). And one of those 13 just happens to be the son of the most famous college football coach in history. You tell me whether that board might be a little biased toward a particular school.
I’ve heard a bizarre number of comments intimating that the demise of Blazer football is somehow the work of the almighty Nick Saban. Nothing could be further from the truth; Saban neither gives nor needs to give half a flying fuck about what’s happening in Birmingham, and the Tuscaloosa camp’s antipathy toward UAB football predates his arrival by more than 15 years. This is something Tuscaloosa has wanted for a long, long time, and somehow — at a time when college football is more profitable than it’s ever been, and with UAB fielding a competitive program to boot — they finally got their wish.
“Everyone seems to be doing it, so it must be making money.”
I hear you on the issue of this possibly being a smoke-and-mirrors-we-can’t-afford-to-pay-the-players thing, but my skepticism runs in the opposite direction.
I am routinely stunned at the financial ineptitude of people who should know better, especially when it comes to things like status symbols – and football programs are, in my opinion, sort of like status symbols for universities. What do most Mercedes owners have in common? Lots of debt.
I can’t say for sure that UAB is losing money, but i can say for sure that when 82% of BHM households are watching Alabama-Auburn, good luck finding your niche.
It bothers me that UNC-Charlotte is using taxpayer money to build a new football stadium. Maybe it will make a ton of money for the university, but Charlotte’s already a market saturated by sports, both college and professional. If I had to guess, it’s simply UNC-Charlotte wanting to step up to ECU/WCU/App State level, the first among the s0-called satellites to do so. It’s a status thing, using flimsy economic projections to justify a significant cash outlay in the present.
I understand what you are saying. I was skeptical that football made money for schools, too, until about a 25 years ago when a small college in my city added football. It had no conference from which to get a check. It had no prospects for television money. I asked my friends on the board of trustees why it was doing it. Turns out it would generate about 80 more students from which the school received tuition, dorm rent, payment for meals in the cafeteria, and bookstore income. The marginal cost of adding the 80 additional students was low, so it was profitable without the television checks and conference distributions. Moreover, the college got exposure. Instead of buying billboard space the college got free publicity in other areas when it played away games and local newspapers and radio reported on the games.
Another big revenue source was summer football camps. The school had to keep dorms open, powered and cooled during the summer for summer students. It did not cost any more to stick several hundred high school football camp players in the dorms at $x per head. The cafeteria was open anyway. The campers paid more for their food than the extra cost of it.
The college prospered after it added football. Its prosperity is not just because of football but football helped.
Take that example and add millions and millions in revenue streams not available to that college. The expenses at UAB are considerably higher but the additional revenue to pay those expenses is much, much greater.
Ray takes a good meeting with the players