Category Archives: It’s Just Bidness

Priorities aren’t free, people.

When you live in a world like this,

In the N.F.L.’s world, displays of principle and common economic sense are for chumps. Las Vegas and Nevada adopted the league’s preferred stance: They rolled belly up. Politicians raised taxes to provide a historic $750 million public subsidy.

This led to unremarked-upon cognitive dissonance in Las Vegas. Even as politicians increased taxes for stadiums, Clark County school officials voted last spring to increase public class sizes and to close a school for at-risk students. There was simply no money. “This is the last thing we ever want to do,” Linda Young, president of the school board, said at that time.

It’s a shame the school board did not build a football stadium, perhaps with a public school annex.

… is it really hard to understand why in most places the highest paid state employee is the college head football coach?

You almost feel like college presidents wish they could move their campuses so they could get in on some of that sweet bidding action for themselves.

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Filed under It's Just Bidness, The NFL Is Your Friend.

For some, you can never get enough “for love of the game” romance

Funny how student-athletes don’t always share that perspective.

Amateurism, in short, is whatever the NCAA says it is. More often than not, what the NCAA says has less to do with bedrock principle than whoever is currently shaming the association and its member schools on national television, or suing them in federal antitrust court.

While athletes wonder if it’s OK to eat a plate of gratis pasta, we watch our coaches, administrators, schools and conferences grow rich. Hell, even the football strength coach at the University of Iowa makes close to $600,000 per year. And since no one is allowed to simply pay us, we watch tens of millions of dollars flow into lavish athletic facilities that stand as pharaoh-shaming monuments of excess, complete with bowling alleys, barber shops, and arcades. Anything to lure the next class of coveted high school recruits, all of us who make the money spigot possible.

Oh, but the second we talk about trust fund payouts or maybe purchasing long-term health insurance for the injuries we suffer on the job, NCAA purists bleat about the slippery slope to corruption. We can’t be paid, because that would violate the academic mission of our schools.

About that mission: Two of my college coaches left my school for new gigs that paid multimillion dollar salaries annually. Until a couple of weeks ago, my final college coach was making nearly a million dollars per year, with a variety of salary escalators built-in—including a reported annual $80,000 bonus if the players hit their APR target.

In other words: he was paid for the work we did in the the classroom. Tell me again about corrupting the academy?

Ingrate.

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Filed under It's Just Bidness, The NCAA

It’s nothing personal. Really.

For those of you who think I’ve been a little too negative, a little too obsessive about Georgia’s athletic department and its seeming lack of appreciation for the majority of the fan base, here’s a dose of reality for you:

For years, Georgia’s head football and basketball coaches used to go on an extensive spring speaking tour, answering questions and shaking hands with fans who paid a small fee at the door.

Those days of extensive touring  around Georgia appear to be over. At least for now.

The university has planned five events this spring featuring Kirby Smart, but they will be private donor events – and for now only one will be in the state of Georgia…

In the past, Georgia football and basketball coach did as many as 12 spring tour stops, almost all in the state, from Columbus to Macon to Augusta and even smaller stops. But those tours have gradually dissipated:

In Mark Richt’s final year, he only went to seven stops. Last year Smart went to five stops, though four of the were in-state, the exception being a donor event in Dallas.

This year it’s going all-private, which someone with knowledge said evolved from Smart coming in with a new approach, and UGA wanting to do fundraising. There’s a feeling they don’t need the old model, where fans get a chance to hear from coaches and ask them questions, because of social media and other factors. Crowds at these events had also been going down.  [Emphasis added.]

“The university is trying to be strategic to generate the money that everybody needs to generate right now,” McGarity said. “The purpose of these events have changed, they’ve morphed over the years.”

And you thought Butts-Mehre couldn’t think strategically about anything.  When it comes to shaking the money tree as efficiently as possible, these guys make the Boy Scouts’ proverbial preparedness look lackadaisical.  Unfortunately, we fans get in the way of the new order.  The less time Smart has to deal with us, the more time he has for fundraising and recruiting, which is all that truly matters to the program now.

Have no fear, though, they’ve got plans for dealing with the rest of us, too.

The athletics department did seem to anticipate some fan blowback.

“As for our donors, I realize there may be some sensitivity to the majority of the events being out of state this year,” associate athletics director for development Matt Borman wrote in an internal e-mail earlier this month. “If donors bring this up to you please just say that we are excited to be in Atlanta with an event in July and we wanted to take an opportunity this year to visit some of our supporters who don’t have the opportunity to make it to Athens on a regular basis.

“After this year of events we will reevaluate and definitely consider bringing some of these events back into Georgia.”

They will, if you make it worth their while.  Otherwise, they’ll keep right on morphing — and counting on your acquiescence in the process.  Hell, it’s worked nicely for them so far.

I know I felt better after reading that.  And you?

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Filed under Georgia Football, It's Just Bidness

The cutting edge of business decisions

If you’re unhappy about seeing fewer star players take the field for their college team’s final bowl game, you may have a new villain to blame, the insurance industry.

Former Notre Dame linebacker Jaylon Smith has become at least the fourth highly-rated player in the last 18 months to collect on his loss of draft value insurance policy, two sources told CBS Sports.

But that is less of a story than the implications of Smith’s payout — believed to be $700,000. Will the increasing availability of such insurance and seeming frequency of payouts make it more likely that more players will be skipping bowl games?

“What you saw is the tip of the iceberg,” said Bryan Fisher, a Baton Rouge, Louisiana-based attorney who works with college players vetting insurance. “You’re going to see a lot of kids skipping.”

Much was made of Stanford’s Christian McCaffrey and LSU’s Leonard Fournette skipping their teams’ bowl games because of injury concerns.

Their loyalty was questioned by some even though McCaffrey touched the ball more than 800 times at Stanford. Fournette had been nicked up at LSU but was considered a workhorse himself.

Meanwhile, a cottage insurance industry has grown up around top-rated college football players in recent years. CBS Sports reported last year Fournette had separate $10 million policies for total disability and loss of value.

Even if Fournette collected on those policies, he’d get a fraction of what he would earn as long-time healthy NFL player. So does this mean the less football played, the better?

“I would probably say more young men will be cognizant that that is a reality,” said Ronnie Kaymore, CEO of Kaymore Sports Risk Management, who advises players on such matters.

It’s not like anybody can do much of anything to stop it, either, unless, I guess, the NCAA revokes its current policy of allowing players to borrow against their future earnings to buy such coverage.  That would send one helluva negative message, though.

In the meantime, though, notice this bit at the end of Solomon’s story:

In the last four years, schools have begun exploiting in a loophole in NCAA rules that allows them to pay those premiums. The Student Assistance Fund at each school is stocked by NCAA money. Typically, there is $300,000-$350,000 in that fund.

The practice of paying for premiums has become so common, that it has become a recruiting tool.

“You would have a difficult time managing recruiting without paying the premium for insurance for players,” Oklahoma State coach Mike Gundy said. “If I had a son that I thought could be that good, if you’re a school that can’t pay the premiums, he’s not going there.”

Before you ask, even Georgia’s gone there.  As long as those funds can’t be clawed back into the reserve fund, their existence will be useful for Smart in that regard.

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Filed under It's Just Bidness, The NCAA

All that money’s gotta go somewhere.

When you don’t have to pay the hired help a market wage, the rising tide will just have to lift somebody else’s boat.

In 2006, former Kentucky coach Tubby Smith made $2.6 million. In the decade that followed, as Kentucky athletics earnings climbed from $68 million to $132 million, pay for the leader of its flagship team skyrocketed. In 2016, John Calipari made $8.6 million, an amount Kentucky officials justify as fair market value for a coach whose team will generate tens of millions of dollars.

But as more money has surged into Kentucky athletics, records show, Calipari isn’t the only coach cashing in, as the athletes remain amateurs. From 2006 to 2016, pay for Kentucky’s track and field coach climbed from $108,000 to $429,000; men’s tennis coach pay jumped from $122,000 to $230,000; and gymnastics coach pay rose from $112,000 to $252,000. Every coach made more than the school’s average full professor’s salary. In a phenomenon playing out across the country, salaries are soaring for coaches of lower-profile college sports largely subsidized by lucrative football and men’s basketball, whose annual national tournament opens Tuesday.

At the University of Kansas, men’s golf coach pay jumped from $84,000 to $201,000 over the past decade. At the University of Virginia, pay for the women’s volleyball coach rose from $94,000 to $221,000. And at West Virginia University, men’s soccer coach pay jumped from $66,000 to $188,000.

(All 2006 figures in this story have been adjusted for inflation.)

Not bad work if you can get it.

“I certainly don’t think anyone’s overpaid; I think the salary has risen for that position,” said Sam Seemes, chief executive of the U.S. Track and Field and Cross Country Coaches Association. “If these schools weren’t bringing in the revenue that they are, the coaches wouldn’t be making as much money. . . . In the United States, the companies that do the best pay more. It’s just fundamental.”

For some, anyway.

The debate over whether the men’s basketball and football players who fuel all this spending and earning should be able to make some money for themselves — either through paychecks or endorsements — remains the subject of litigation that threatens to overturn the economic structure of college sports.

“It’s a system that takes money that should be rightfully going to athletes, many of whom are minorities from underprivileged backgrounds, and reallocates it to coaches and athletic directors, many of whom are middle-aged white men. . . . How can you call that just?” said Andy Schwarz, an economist who has consulted for several lawsuits against the NCAA and college conferences.

Kentucky Athletic Director Mitch Barnhart, whose salary rose from $480,000 to $695,000 in a decade, said the raises he has paid out reflect the market for good coaches in each of those sports. Kentucky athletics is one of the few self-sufficient departments in the country, and recently did something that may be unprecedented in American higher education: paid for a building that will not benefit athletics in any way. Kentucky athletics contributed $65 million for a new $112 million science building on campus.

“I get a bit disheartened when I find people who keep trying to find the bad in what we do,” said Barnhart. “I’m not a lawyer, I’m not an economist, I don’t know all of those pieces, but I know that what we do is good.”

In his heart, he knows he’s right.  What else matters?

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Filed under College Football, It's Just Bidness, The NCAA

Pity the poor McGarity.

[Ed. note:  I gotta tell you… that never gets old.]

Chip Towers rises to defend the beleaguered Georgia athletic director.

Look, I realize it’s cool to bash on Greg McGarity right now. That certainly seems to be the trend judging from commentary I see on my social media feeds. And some of it is justified, at least based on the overall performance of Georgia’s sports teams. I’m sorry, but with the exception of a few Olympic sports, we’re not in the midst of glory days when it comes to this period of UGA athletics.

That said, I can’t get on board with the meme that McGarity is cheap. I certainly can’t when it comes to the facilities arms race that is currently raging full bore throughout the SEC. The Bulldogs are in there slugging it out when it comes spending money on buildings and “stuff.” And they’ve been at it for a while now. But they’ve also had a ways to go.

If you want to point fingers over how Georgia got so far behind with respect to facilities, you’d be better served to direct them toward McGarity’s predecessors. It was during the administration of Damon Evans and his CFO Frank Crumley that the Bulldogs fell behind, in my opinion. UGA has been playing catch-up ever since those guys left.

Hmmm… I didn’t know I was being cool griping about bathrooms and tailgating.  I just thought I was pissed off.  Neat trick.

There’s something both obvious and curious about Towers’ argument.  But before I go there, I have to start with his pointing a finger at Frank Crumley, who Towers mistakenly references as McGarity’s predecessor.  Crumley was indeed at his position before McGarity triumphantly returned from Florida, but he stayed at his position in the aftermath.  Crumley was let go afterwards, but not because his new boss walked in one day, cried “begone, thou foul skinflint!” and hustled him off the premises.

No, Crumley and Georgia parted ways because he got caught with his hand in the Butts-Mehre cookie jar, spending athletic department revenues to promote a married female employee with whom he was having an affair.  (Okay, maybe another part of the anatomy, too.)

What made things so special from McGarity’s standpoint was that it took him more than a year — and an open records request! — to work up to the step of actually canning Crumley.  As I referred to it at the time, the Butts-Mehre Way.  (The Georgia Way has many rooms, my friends.)  You’d think a guy who leaped into action when Todd Gurley got a few bucks from a shady autograph dealer could have moved with more alacrity when it came to an inside job like Crumley’s, but I guess it was more important to protect amateurism than the house.

Anyway, as Marlon Brando alludes, Chip is right that it’s not totally fair to Greg McGarity to call him cheap, when he’s clearly following orders from others as to how athletic department moneys are being spent.  It could be argued that it’s also not fair that those who give him direction as to the reserve fund leave him hanging with having to make absurd defenses about rainy days that may never happen, but, hey, them’s the breaks and that’s what they’re paying him for.

That being said, let’s not make McGarity out to be nothing but a helpless pawn, either.  After all, it wasn’t the nameless powers behind the throne whom Jeremy Pruitt called out when he made his pitch to the media for an IPF and it wasn’t them who were publicly embarrassed by it.  If you want to choose to believe that the about face on the status of the facility that occurred shortly thereafter was purely coincidence, be my guest, but that explanation strains credulity.

As far as whether McGarity is cheap, well, cheap is a relative term.  Internally speaking, it’s nice to give McGarity a pass on increasing spending, as Towers does, in comparison with what went on before that fateful night of the red panties, but to do so glosses over the fact that athletic department revenues have also increased over that time, from “just shy of $90 million” in fiscal 2011 to nearly $100 million two years later to more than $116 million in fiscal 2015 (with the likely odds that number increases significantly for the following fiscal year).  So, yeah, when you’ve got more coming in than before, you can spend more, too, especially when you’ve got donors who are willing to step up and participate in the funding for big capital projects.

In other words, let’s not throw any ticker tape parades yet.

Cheap is contextual in a macro sense, too, as a look at those 2015 finances in comparison with the rest of the SEC will quickly tell you.  Of the thirteen conference schools listed (remember, as a private institution, Vanderbilt doesn’t report) Georgia was eighth in total revenues, but tenth in expenses, resulting in the third-largest surplus of the group.

Now if that got you wins because it was wisely managed, or if Georgia were both fiscally prudent and first-tier as far as facilities go, then there would be little room for griping.  The reality, of course, is quite different.  Georgia, as Towers acknowledges, has been in a catch up mode with its peer athletic departments for years, as complaints from both Richt and Smart would indicate.  And as for the other little matter,

Now as for how things are going in the fields of play, McGarity is probably rooting harder than anybody else for some good things to happen. In fact, on Monday he sent out a rare direct email message to fans and donors lauding the men’s and women’s track teams for their recent fourth- and second-place finishes, respectively, in the National Indoor Championships this past weekend. And he’ll point with pride to Georgia currently being ranked No. 5 in women’s gymnastics and perennially highly-rated programs in golf, tennis, softball and swimming.

But you won’t hear much talk about volleyball, which has been a disaster and is now under the direction of the second coach under his watch. And it’s in the high-profile sports of football, men’s and women’s basketball and baseball that McGarity really needs some good things to happen.

Football just lost to Ole Miss, Tennessee, Florida, Georgia Tech and Vanderbilt in the same season; baseball continues to struggle in its fourth season under his hire, coach Scott Stricklin; and men’s and women’s basketball both missed NCAA Tournament play for the second straight season.

Yeah, that’s going well.

The problem isn’t so much that McGarity is cheap — the Georgia Way’s gonna Georgia Way, y’all — it’s that he lacks the vision to make the most out of what he’s been dealt, which, let’s be honest, isn’t inconsiderable.

A perfect example of that is evident in how taken by surprise he was with the fan base’s reaction to the announcement of the Sanford west end capital project.  It’s as if he was completely unaware of the grumbling that’s gone on for years regarding the bathrooms and concessions.  At least now we’ve moved on to the hinted promise stage.

More importantly to you fans, I’m hearing that there’s an announcement forthcoming — possibly as early as this week — on restroom improvements at Sanford Stadium.

Be still, my heart.

Hey, if I’m wrong, it seems there’s an easy way to prove it.  As we discussed before, there’s a long list of items that would cost relatively little in the vast scheme of things, all of which would serve the fan base’s interests.  All it takes is a little openness.  And a little vision.  Anybody at Butts-Mehre listening?

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Filed under Georgia Football, It's Just Bidness

The Rutgers Way

Meet the Bizarro Butts-Mehre.

All of which brings us to the athletic department’s 2016 financial report to the N.C.A.A. The Star-Ledger obtained this document recently; it showed a blood-red deficit of $28.6 million. The 64-page report had a one-line notation: “Other Operating Revenue: $10,495,912.”

It turned out that the university bank quietly lent $10.5 million to the athletic department to keep it afloat and pay severance costs for expensive and failed coaches. That loan came weighted with an interest rate of 5.75 percent; the cost of repaying it will run north of $18 million, according to university documents.

Rutgers also diverted $11 million in student fees and $17.1 million from its general fund to cover the athletic shortfall. The average undergraduate now pays more than $300 in activities fees exclusively for the university’s N.C.A.A. teams…

Late last month, I requested an interview with the athletic director, Patrick Hobbs. A day later, I also asked to speak with the president, Robert Barchi. These requests were met with silence.

On Thursday, I asked again, and a spokeswoman offered an off-the-record interview with Hobbs. I declined. An email statement soon arrived, saying in part, “Rutgers Athletics will be in a position to generate a positive cash flow for the university after we receive our full share of Big Ten revenues in 2021.”

Let me translate: That the athletic department has been run with no regard for sound financial practice is a trifle. Soon enough, piles of dough from the Big Ten’s billion-dollar-plus television contract will be deposited on the front steps of the athletic department. Its take could amount to $40 million.

This is like handing Jesse James the keys to Fort Knox.

Yeah, Jim Delany sure can pick ’em.

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Filed under Big Ten Football, It's Just Bidness