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Sunday, May 24, 2009

Athletic systems broken

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Gene A. Budig is a distinguished professor at the College Board in New York and a former college president at Illinois State University, West Virginia University, and Kansas University. He also served as president of the American League from 1994 to 2000.

University presidents with large athletic programs saw the beast coming.

Seemingly, there was no easy way to slow it, and the fears have been greatly magnified over the years, especially with the advent of the dreaded “arms race.”

What activist college presidents hoped for 25 years ago was some form of financial arrangement with professional football and basketball — the collegiate athletic experience was serving as the training ground for the pros, and the presidents wanted to retain balance, control, and academic integrity.

Even then few college football and basketball teams actually made money. Today fewer than 15 claim to be in the black while the others continue to spend, hoping that financial success is just around the corner.

Furthermore, college athletics has become an enormous factor in national sports entertainment, with rich cable and network deals, such as major conference television arrangements.

Given the fact that all major state and private colleges and universities will begin the 2009-2010 school year with seriously reduced budgets, perhaps it is time to explore, in a serious way, a financial arrangement with the NFL and NBA.

And beware of the lawyers from the leagues who will explain how that cannot be done, citing numerous interpretations of the law. Most of these specialty sports attorneys rarely lose when big dollars are at stake for their wealthy clients.

The truth of the matter is:

• The National Football League just drafted 256 outstanding players from our colleges and universities.

• The National Basketball Association will soon claim another 60 or more.

• Major League Baseball will select at least 50 to 60 players.

The drafts have become popular national events for cable TV, enhancing value for the players, teams, and the networks through advertising and attractive program time.

The point is:

All of these promising athletes received their training at their colleges and universities, without cost to the professional teams who are clear beneficiaries.

According to Alan Barra, who recently wrote a splendid piece for The Wall Street Journal on the timely subject, one of the major reasons for the professional leagues’ financial success, especially in football and basketball, is that they do not pay for the costs of training. MLB is somewhat different in that its teams do provide player development through an expensive system of minor leagues.

Despite high-profile attention to reform in college athletics, and there has been considerable progress on the academic side, the system remains pretty much the same. It is broken and most college presidents and chancellors know it.

It has become big-time entertainment for students, faculty, staff, alumni, major contributors, politicians and the general public. Many even associate it with state pride. In some parts of the country, college athletic programs are more popular than their professional counterparts. The horse has been out of the barn for a long, long time.

But given the staggering financial crises facing our colleges and universities brought on by depression, it might be the ideal time to open the conversation with the professional leagues for support for higher education. The pros certainly have the money, certainly enough to share.

A respected colleague and sports economist, Andrew Zimbalist, said in 1999 that colleges would be justified in charging pro football and basketball as much as $130 million annually — probably $170 to $180 million in today’s dollars. Others put the figure closer to $190 million.

Surely, the NFL, NBA, and MLB could afford to pay the educational costs of every athlete they draft. Such a move would be one stimulus package that would receive universal taxpayer support.

Comments

jfish126 10 years, 8 months ago

So should KU also then return its media, advertising, licensing, and ticket sale revenue to the professional leagues?

And, what's more, KU is going to outperform more than half of the teams in the NBA this year, from a P/L standpoint. I'm missing how it's appropriate to beg for more money; maybe Lew can tell me.

stravinsky 10 years, 8 months ago

Hmm, probably is appropriate based on the fact that then the University could maybe avoid laying off teachers and cutting programs. Which it's doing in a hurry.

I think it's fair for the university to be compensated for training athletes. In the scheme of athletics, 20k-40k a year compared to the million dollar contracts isn't that much. But that could pay for a lot at the university.

63Jayhawk 10 years, 8 months ago

There are some interesting and provocative comments in this article. First, it is suggested that fewer than 15 college and university athletic programs will operate in the black. Then, in the last paragraph, it is suggested that the pros pay for the college education of each player drafted. That idea is an interesting one which on the surface seems like a good one. Each time a school has a player drafted, the school would in essence receive funding for a scholarship for another player (by being reimbursed for the expenses of the draftee). Sounds great at first, but which college and university athletics programs are most likely to have players drafted by the pros? It seems to me that it is most likely that those top 15 schools mentioned at the first of the article are most likely to also be the ones with the most players drafted by the pros. Thus the bottom line is that those "financially healthy" schools would see their budgets increased with the concomitant opportunity to attract more pro prospects the their schools. The rich get richer and the poor get poorer.

kerbyd 10 years, 8 months ago

The other issue would be the corruption that would result from paying the university instead of paying the "student-athlete". There is already pressure on the schools to produce national and league champions. The middle men that help broker their athletes to certain colleges would also want their cut of the action. Sounds pretty scary to me.

Marcia Parsons 10 years, 8 months ago

I think he was talking about an arbitrary dollar amount charged for the training of the college athletes, not the cost of their education. And if they did that, I suspect they would do it through the conferences. In other words, if the Big 12 had twelve players taken early, all the years those 12 guys spent learning to play college basketball would be added together and that amount would go to the conference to be split 12 ways. So if we lost three or four players, same for Texas and Oklahoma, we'd only get a portion back. That seems to be the way they do bowl games, etc., so the rich wouldn't get richer, they would just support the poor teams. No matter how they set it up, the whole idea seems like a bad thing to me. It does gripe me, though, that the NBA uses colleges for a free farm club system.

jayhawker85 10 years, 8 months ago

If you could find a way to do this correctly, it might be a good idea. The only thing is that all Division-I programs should receive money, not just the good ones that turn pros.

If the money could be given to the schools in the way that school's athletic departments use the money to fund all sports, not just football and basketball, then the money that football and basketball make could then go towards academics.

This would be ideal, but I would imagine that the athletic programs would just use it to pump up their facilities and coaching salaries and academics would receive nothing. I know that KU Athletics is separate from the university, but if there were excess money coming in, some would have to be turned back over to the university that educates these students.

rockemchalkemrobots 10 years, 8 months ago

Are these the same chancellors and presidents who decry a football playoff and give phony reasons for its non-existence? This blatant money grab idea is ridiculous. Your focus should be on developing relationships with these players, so they decide to give back to the institution that gave them a scholarship.

Chad Waetzig 10 years, 8 months ago

So by Budig's reasoning, shouldn't the university presidents also require corporations (both small and large), non-profits and governmental agencies to have a financial arrangement with universities, as they "draft" (that is, recruit, interview and hire) graduates in accounting, engineering, journalism, marketing, information technology, etc.? These promising students received their training at their colleges and universities, without cost to the companies who are clear beneficiaries...

Such a silly argument...

justanotherfan 10 years, 8 months ago

The system has been broken for a long time, but having professional leagues compensate colleges will not fix the system.

This is just another money grab in an attempt to avoid budget constrains by generating revenue. It's unfortunate, but the honest truth is that higher education in this country has been poorly run from a business perspective for decades now. Their answer for every crisis the last decade has been to increase tuition. And we aren't talking about modest increases either. Check what the cost was for the Regents schools here in Kansas four years ago (Fall 2005). http://www.kansasregents.org/download/news/062305fy2006tuition.pdf

Check the prices they are proposing for this fall (Fall 2009). http://blogs.kansas.com/gov/2009/05/21/state-universities-propose-tuition-and-fee-increases/

Now that some students have nearly been priced out of a higher education, they are looking to generate revenue by having the pro sports leagues chip in? Really? Secretly, some schools would love to cut athletic programs, but the combination of Title IX and alumni backlash won't allow that. Quite simply, they are seeking to tax the professional leagues to make their bottom lines work since they can't raise tuition much more, especially in a shaky economy with tight credit markets.

Eric Williams 10 years, 8 months ago

Think of a scenario outside college sports.

We'll call the person "employee a" for argument's sake.

Employee A spends 4 years earning a salary and valuable work experience out of college at Company A. Should Company A pay the salary AND the university?

Employee A then decides to transfer to a competing company (Company B) to move UP the ladder AND receive an increase of pay. Should Company B be required to pay Company A for the 4 years of work experience.

The answer to both is NO.

Perhaps it would benefit the universities to attempt to budget academics and athletics separately. Not to say that Athletics is allowed to retain all its profits, but often the academic and operations departments tend to budget based on PROJECTIONS and when the athletics departments fail to meet those projections, the academic and operations have to make cutbacks.

The universities made their bed, now they should adapt and learn how to manage the BUSINESS that they turned college universities into.

jcepp 10 years, 8 months ago

Under the Budig manifesto, how much do NCAA universities owe to the high schools that have trained the players that generate the existing levels of revenue?

Joe Baker 10 years, 8 months ago

OMG...What kind of crap is this? Who thought of this hair brained idea? This is classic spreading the wealth!! This is not free enterprise...("cough") this is that nasty little word BO hates to hear when referring to his administrative ideas...SOCIALISM

Does this sound familiar? Hello...GM, Chrysler, Ford...BAILOUT!! The universities need to stop it...balance and manage their budgets, they can do it.

Why why why? Do we want to penalize one area to bail another failing area? I'm so sick of these business ideas and I know one thing, it's not Capitalism!!

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