Category Archives: It’s Just Bidness

Why we need a rainy day fund.

From 2003-4 to 2015-6, UGA’s athletic department revenues increased 163.7%, from $46,971,058 to $123,841,268.

I can see how that would keep Greg McGarity up at night.

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Filed under Georgia Football, It's Just Bidness

War is hell (on the reserve fund).

Chip Towers issues a call to arms.

I’m sure you’ve seen and read a lot from us regarding the Georgia football facilities situation lately. The truth is, I don’t think any of us likes writing that much about it. But the reality is it’s a very big part of what’s happening right now, not just with the Bulldogs but throughout the SEC.

There has always been a bit of an ongoing facilities arms race going in the conference — and in college football in general — but it’s as though they’re waging World War III on that front these days. And while it could be argued it wasn’t engaged for a long time, UGA is fully engrossed at the moment…

Not coincidentally, Smart made sure to thank the TD Club members for all their financial contributions and encouraged them to continue to donate. Because, he said, Georgia needs to “keep the momentum going.”

And, you know, I used to scoff at such talk. But I don’t anymore. I’m starting to see the reality of the facility arms race that’s going on in college athletics. I don’t like it, but I know it to be the real deal these days…

Now for brevity’s sake, I’m not going to get into the argument about UGA currently having $77 million — at least — in unallocated funds sitting in its athletic reserves. I’ll just say based on the landscape I’m seeing, the Bulldogs need to break it out and start spending that cash like it’s going out of style! Georgia is, after all, a non-profit, or at least that’s what it says on the tax forms I’ve seen.

He goes on to say that’s not literally practical, but that McGarity can easily afford to reorient his thinking.

But I still don’t think Georgia is thinking big enough, especially with the financial climate such as it is. Athletic director Greg McGarity keeps talking about needing to hold fast to that hefty reserve fund in the case of a “rainy day.” But if 2007-10 weren’t rainy I don’t know what it is. And right now it is quite bright and sunny in the SEC.

Every time you turn around the SEC is backing up a dump truck of money and pouring it out on its “member institutions.” That’s to the tune of about $40 million a team this year, and $32 million last year. With that kind of income and the obvious unwavering support of its donors, Georgia could have easily built a basketball/gymnastics facility downtown or over on East Campus and plopped down a whole new baseball stadium somewhere…

… I see what South Carolina has done and Clemson has done and Florida is now doing. It’s not just the Alabamas of the world that are living large and spending lavishly anymore. Everybody is.

The Bulldogs better get on board — fully — or get left behind. It’s either that or you’re really going to be in for a rainy day. And based on the dearth of championships I’m seeing at the moment, it’s looking pretty cloudy in Athens.

I doubt you’d find a single UGA coach who would disagree with Towers’ sentiment.  In real life, though, I suspect all this boils down to in practical terms is a new message for Butts-Mehre to send donors as to why they need to pony up extra funds to make things happen.

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Filed under Georgia Football, 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