Category Archives: It’s Just Bidness

I am shocked, shocked to learn that there is spending going on in here.

To sum up the current state of affairs at the University of Arkansas:

  • Jeff Long has been fired.  The school owes him a buyout of $4.8 million.
  • Bert is not long for this world there, either.  I’ve seen various numbers tossed out for his buyout, ranging from $6+ million to (gulp) $15 million.
  • Bruce Feldman, who’s tapped into this kind of stuff, now reports that “Big-money boosters at Arkansas and members of the university’s board of trustees have been pushing for the Razorbacks to go after Auburn coach Gus Malzahn to be their next head coach.”  Aside from the salary they’d have to pay Gus to get him to jump, there’s also the little matter of his buyout, something in the neighborhood of a mere $7 million.

That’s a shitload of bucks to lay out for a program that’s still in the same division as Alabama.  And yet nobody is batting an eye.  Cost of doing bidness in the SEC, y’all.

So I have to chuckle a little when I see “how did we get here, anyway?” articles like this one.

How did we get to this point? It boils down to some combination of revenue going through the roof especially from television rights, powerful agents wielding tremendous leverage and university leaders giving in to increasingly one-sided contracts amid growing desperation to find a winner.

Notice anything missing there?  Oh yeah, that whole cheap labor thing.  There’s all that extra money out there as a by-product and it ain’t gonna spend itself.  The result is inevitable when you consider the basic ingredients:  stupid and desperate athletic departments with more money than sense waiting to be fleeced by agents who know how to play on that stupidity and desperation like a finely tuned instrument.  Which they do, again and again.

There’s so much money coming in with no place to go that it essentially becomes a cushion against irrational management.  Arkansas can afford to behave senselessly, so who really cares?

Welp, maybe Congress does.  The tax bill just passed by the House does away with the deduction associated with charitable contributions for tickets.  Honestly, it’s hard to argue with this kind of reasoning:

Going after the season-ticket donation deduction doesn’t come as a complete surprise. Many in political circles believed the deduction was unfair because the donation included the rights to get season tickets, which is something of significant value.

“I don’t believe the deduction was ever intended to apply to donations related to season tickets,” the bill’s author, Representative Kevin Brady (R-Texas), told ESPN.

Brady said that the majority of season-ticket holders in college athletics don’t have to pay for the rights to their seats; they just pay the cost of the ticket. Since deductions technically cost the taxpayer at large, Brady reasons that the average fan is actually disadvantaged by the deduction at the hands of the wealthy, who deduct the price of their large donation for the right to sit in the best seats.

That, of course, won’t stop the schools.

“While we certainly do not know the exact repercussions, we expect that it would have a damaging effect,” said Alabama athletic director Greg Byrne. “The philanthropic support of donors is instrumental, and although the amount of contributions from institution to institution varies, it is of equal importance across the board when you look at financial structures. Very few college athletics programs actually make a profit. Take that funding away, and it will be difficult to operate without making dramatic changes.”

The effect on not being able to deduct the donation might be more severe with the higher donations. NC State, for example, asks for a $25,000-per-seat donation for the best center-court seats for its basketball games for life. However, it comes with the promise of an additional donation of $7,200 per year, and that doesn’t even include the season tickets.

Duke’s White says that losing season-ticket donations could immediately affect scholarships in Olympic sports.

“We have over 500 student-athletes at Duke in 24 Olympic sports,” said White, who is a member of the United States Olympic Committee board of directors. “This would significantly compromise the opportunities for young people in those sports across the entire student athletics system.”

Or, for that matter, handing out obscene buyouts in contracts.  Cry me a river, Mr. White.

Advertisements

30 Comments

Filed under It's Just Bidness

Money for nothing

Jeebus.  Jeff Long, Arkansas’ former athletic director who’s got the school on the hook for something like a $15 million buyout for a football coach whose won-loss record is significantly underwater, has himself got a $4.625 million buyout.  $4.625 million!

I’m in the wrong profession.

Keep in mind, too, that there’s a decent chance the folks who ousted Long after giving him that deal will dump Bert and look for a replacement without hiring a new AD first.  Christ, every agent in America’s got to be lining up for some of that sweet action.  As the old joke goes, I’d call them morons, except that would be an insult to morons everywhere.

Too bad there’s no money for student-athletes’ compensation, although we should consider that Jeff Long’s name doesn’t appear on the back of a jersey.

6 Comments

Filed under Arkansas Is Kind Of A Big Deal, It's Just Bidness

Today, in amateurism

Hey, lookie what’s going on sale!

In plain English, they’re hats promoting Notre Dame running back Josh Adams.  I don’t need to explain how much Adams will be making from this, do I?

I’m sorry… what was that you said about it being the front of the jersey that counts?

22 Comments

Filed under It's Just Bidness, The NCAA

The NCAA’s existential crisis

“We cannot go to the next basketball season without seeing fundamental change in the way college basketball is operated,” Emmert said. “The public doesn’t have sufficient confidence in any of us in terms of our ability to resolve these issues.”

The idea that Mark Emmert gives two shits about public confidence is almost laughable.

However, what he does care about is the NCAA’s revenue stream from men’s basketball.  It’s the organization’s lifeblood and if that’s taken away, well, there isn’t much need for the NCAA and even less for Emmert himself.  So don’t think this isn’t occupying much of his waking time right now (maybe even a few sleepless nights, as well).

Basketball is critically important to the NCAA because it gets most of its annual revenue — roughly $800 million — from television rights fees for its men’s basketball tournament. The college football playoffs, by contrast, are not run by the NCAA.

A failure to act, Emmert said, could lead to the end of the NCAA as a governing body and a move toward a “European model” under which football and basketball are entirely professionalized. That, he said, would have an undesirable ripple effect upon other college sports that are subsidized by football and basketball revenue.

Not to mention an even more undesirable ripple effect upon Emmert’s paycheck.  But I digress.

Read that second paragraph and ponder the implications.  The reality is that the NCAA and its member schools benefit tremendously from the current arrangement imposed by the NBA and NFL on player entry.  Yes, the pros get free player development and marketing, but the schools get an inexpensive talent pool that essentially has nowhere else to go to market its skills.

That’s not something they want to give up because it’s what drives their athletic department budgets.  Yet sitting back and doing nothing but waiting to see where events take them could be just as disastrous to their bottom lines.  That’s a tough call, especially for a bunch who aren’t nearly as sharp business-wise as they believe they are.

How this all works out I don’t know.  Some suggestions were offered,

Following Emmert’s comments, Knight Commission co-chairs Arne Duncan and Carol Cartwright outlined what some of those reforms could be: regulations for nonscholastic youth basketball; greater enforcement powers for the NCAA, including possible subpoena powers; a limited antitrust exemption that would give the NCAA protection from lawsuits in exchange for some federal control; and allowing athletes to benefit from the use of their names, images and likenesses.

… but the devil’s in the details, especially with an organization so resistant to changing its business model.  That being said, criminal indictments have an impressive way of focusing one’s mind.  On the other hand, this is Mark Emmert we’re talking about, so who knows?

7 Comments

Filed under It's Just Bidness, The NCAA

Still, the real problem is player compensation.

USA Today has published its coaches’ salaries database update.  The data is a doozy.

Even more eyeopening, there are twenty-six coaches with buyouts greater than $10 million.  That’s insane.

In my next life, I’d like to come back as a player at the World Series of Poker set up against a table of college athletic directors.  I’d never lose.

8 Comments

Filed under College Football, It's Just Bidness

Pay (each other) to play

This article about NCAA economics and the impact of paying student-athletes may be way over your head (hell, it’s way over mine in a lot of spots), but here’s the gist:

Okay, even gistier:

There’s a certain real world logic to that.  If schools have to pay players, they’ll suddenly discover there are a whole lot of less relevant budget items that can be revised downwards, like waterfalls and $10,000 lockers.  And that’s before you get to bloated administrative staffing.  (Which is really what this whole amateurism fight is about now…)

9 Comments

Filed under It's Just Bidness, The NCAA

You know who’s gonna have a great season?

No, Jimmy Sexton isn’t James Franklin’s agent.  But with the current crop of geniuses running athletic departments, ask yourself how much that matters.

By the way, it turns out Bert’s buyout figure is less than half what people thought it was, should he be canned at season’s end.  It’s kind of pathetic that a $5.9 million payout is a cause for celebration, but, hey, that’s the world the SEC lives in these days.

3 Comments

Filed under It's Just Bidness, Jimmy Sexton is the Nick Saban of agents and is Nick Saban's agent, SEC Football