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Sunday, May 20, 2018

Girod: Athletics important to KU, but there is a “disconnect” too

University of Kansas Chancellor Douglas Girod attends a Kansas Board of Regents meeting Wednesday, Nov. 15, 2017, in Wichita.

University of Kansas Chancellor Douglas Girod attends a Kansas Board of Regents meeting Wednesday, Nov. 15, 2017, in Wichita.

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When University of Kansas Chancellor Douglas Girod thinks about his university’s athletic department, a number sometimes comes to mind. It is not one you’ll find on the scoreboard or in the record books, though. Rather, look through enrollment records.

The number is 40 percent, and that roughly is the share of KU students who come from outside the state of Kansas.

“That will continue to be a critical part of our enrollment strategy,” Girod said in a recent interview with the Journal-World.

About this series

When KU announced in September plans to build $350 million in new facilities, primarily for football, it marked the beginning of one of the biggest financial bets the program has ever made. The Journal-World decided to study the financial books, talk to leaders and give readers a better understanding of the money game that is constantly a part of big-time college athletics. To see more articles go to: ljworld.com/kuath

In some ways, out-of-state enrollment has become a necessity. Kansas’ population growth has been stagnant for years now. Counting on there being enough Kansas families with enough tuition dollars to support KU’s rising costs is risky.

So, you try to grow the pie by getting kids from Chicago or Omaha or China to choose KU as their university home. Sure, hopefully KU’s academic pedigree seals the deal, but first you have to get them on the showroom floor. Kansas’ mountain views and world-renowned beaches are going to be of no help in that effort.

What may be? The Jayhawk. It has a national brand, and that is largely thanks to college athletics.

“You can’t buy the type of advertising that having the Jayhawk on national TV provides right now,” Girod said.

David Ridpath is familiar with the argument. Ridpath is an associate professor of sports business at Ohio University and board president of the Drake Group, an organization that advocates for more financial responsibility in college athletics. He said a common argument of chancellors and university presidents is that athletics is the front porch of the university.

At $100 million, which is about the amount KU spent on athletics in 2017, it is a gilded front porch. Ridpath said the entire analogy is built too much on anecdote and not enough on research. He said the research behind whether athletic spending produces more enrollment, better graduation rates, and more financial support for academic purposes is flimsy. Instead, leaders point to the general notion that the prominence of a school’s athletic teams naturally will lead to positive results for the rest of the university.

“They will tell you that the games are three-hour commercials for the university,” Ridpath said. “My response is, if they saw KU football play Ohio, that is not a commercial people want to watch.”

Point taken. KU’s football program hasn’t been very competitive recently. But Girod doesn’t see how spending less money on the program is going to make it better. Girod said he does believe facilities play an important role in attracting quality recruits who can improve the fortunes of the team. He thinks football facilities are particularly important for KU right now.

“When you don’t have that legacy of winning every single year, I think facilities come into play even more from a recruitment standpoint,” Girod said.

Critics don’t necessarily agree with that either. Some note that many of the $300 million-plus improvements proposed for KU have to do with fan amenities rather than facilities student-athletes will use, with the $26 million indoor training facility being the exception.

But university leaders and college athletic critics could disagree all day on a number of topics. There is, however, at least one point where they can find agreement: It is frustrating how academics is treated compared to athletics.

Girod said the academic side of the university operates on a completely different business model than the athletic side of the school. He worries that the disconnect can create fractures in the university community.

“I think it already is hurtful for morale,” Girod said. “There is a disconnect that doesn’t make sense. It does from a business standpoint, but it doesn’t make sense from a philosophical standpoint. It doesn’t make sense that the athletic side of the house is valued more by society than the academic side of the house. It is disappointing.”

Catching up

When Kansas Athletics Inc. announced in September its Raise the Chant campaign to raise funds to build about $350 million in athletic facilities — with more than $300 million being for football — the Journal-World decided to review the finances of the athletic department as it prepared to make one of the bigger bets in its history.

The review found that the finances of the department were unbalanced in some regards. Expenses have been increasing at a rate significantly faster than revenues, both over the last decade and more recently. Pressure to generate donor money is immense. In fiscal year 2017, the department used about $19 million in donor funds to cover basic operating expenses.

During a recent interview with the Journal-World, though, Girod did not express concern over the finances of the department. He believes athletics at KU is going through a period of “catch-up” necessitated by KU not investing in a number of athletic facilities for “a lot of years.”

The increased spending levels at the department have been necessary to try to catch back up, but Girod is assuming that, at some point, KU will catch up. At that point, the finances of the department may look different.

“Historically, it may change,” Girod said. “At some point you can only spend so much on facilities, and then you have what you need.”

To be clear, Girod said nothing to indicate he thinks KU’s athletic department is facing financial trouble. Indeed, if you were making a list of athletic departments with the most red ink, Kansas wouldn’t be on it.

But $350 million in new spending on facilities creates questions about what the future will hold. Girod said he’s confident KU will manage future spending wisely.

“I’m comfortable that we are living within the budget,” Girod said. “I’m comfortable knowing that we are not going to borrow $300 million to build a project. That is just not going to happen. There is no reason to take major risks here.”

Donor money is expected to fund the bulk of facility improvements in the future. But debt is expected to play a role too. Kansas Athletics officials have been reticent to talk about how much debt could be in play. Girod offered a little more guidance. Girod said the university would have to “look really hard” at taking out even $50 million in debt for facility upgrades.

Even at that level, though, the impact on Kansas Athletics’ finances would be significant. A $50 million debt issuance likely would take KU’s debt and long-term lease obligations to more than $115 million.

Sharing the riches

Maybe 2013 could have been the glimpse of a new future.

That was the first year after the Big 12 Conference announced its lucrative television deal. Conference and media revenues jumped by more than 30 percent and totaled about $27 million for Kansas Athletics.

Yes, as reported last week, the department did boost spending significantly that year, with support and administrative salaries increasing by more than 40 percent in a single year. Even with that, though, there was still plenty of money left over. The department had revenues that exceeded expenses by about $13 million, according to NCAA reports.

Maybe this new era of big television money would create a world where athletics had all the money it needed and even could financially help the academic side of the university.

“I thought there was so much money coming in that they couldn’t piss it all away,” said Murray Sperber, a professor emeritus at the University of California-Berkeley and a longtime author on the excesses of college sports.

Indeed, the money kept rolling in. KU conference and media rights totals grew from about $7 million a year in 2006 to $32 million in 2017. But the money never did flow to the university’s general fund, and that wasn’t just at Kansas.

Both Ridpath and Sperber said university presidents simply don’t take money from athletic departments to fund academics, not even when windfalls of TV money appear.

“Nobody says the very rational thing: 'That $25 million you just got? How about $15 million of that comes to undergraduate education?'” Sperber said.

There’s also a rational reason why university presidents don’t say that. What would make university presidents think they could order that and still keep their jobs?

“When you have a coach making $5 million or $6 million more than a president, when you have offensive line coaches making more than some presidents, you have shifted the power structure," Ridpath said. "They don’t want to stand up to that.”

Girod didn’t get into those details with the Journal-World, but he did talk about how athletics, its spending and its place in the world really isn’t the big problem facing higher education right now. It is the public’s change in attitude toward higher education.

“The bigger perception shift is one away from higher education as a public good and a public responsibility to one that is more of a personal benefit and a personal responsibility,” Girod said.

For evidence of that, look at the decline in state funding.

That puts more pressure on private fundraising. Girod has been on enough fundraising calls to know that athletics helps in that regard.

“The major way in which people stay connected to the university is by keeping in touch with what happens with the athletic department,” Girod said. “I hear that again and again.

“It is a valuable tool. It is one you really couldn’t replace with any other mechanism.”

Folks like Sperber — who is old enough to remember watching Gale Sayers as a Jayhawk — worry where it all will end.

“In the beginning, when Dr. Naismith blew up that first basketball, he truly though it was for students,” Sperber said. “Now, he was interested in including the students who were best at his game, but he couldn’t conceive of the commercial world it has become.

“There doesn’t seem to be any way of putting it back in the box. It has increased exponentially in the last 25 years. I don’t know where the ceiling is.”

In September 2017, when KU announced plans to build $350 million in new facilities, primarily for football, it marked the beginning of one of the biggest financial bets the program has ever made. The Journal-World decided to study the financial books, talk to leaders and give readers a better understanding of the money game that is constantly a part of big-time college athletics. These are the resulting stories from spring 2018.



April 29 — A look at the finances of Kansas Athletics: Rising revenues, soaring costs, big bets

April 29 — KU basketball saves athletic department budget, allows leaders to dream of ‘blue sky potential’

May 6 — KU football ticket sales down about $6 million per year; some question whether $300 million in new facilities will help

May 13 — Administrative salaries jumped by 42 percent in a single year at Kansas Athletics; KU salaries top K-State’s

May 13 — How much does KU spend on athletics? More than the city spends on police, fire and roads, but returns are big too

May 20 — Girod: Athletics important to KU, but there is a “disconnect” too

May 20 — Should KU be worried about getting dumped from a Power 5 Conference? The financial stakes are huge

May 22 — Rock Chalk Park started as $39 million deal for KU; now it may top $100 million after KU allowed lease to be changed

Comments

Brett McCabe 6 months, 3 weeks ago

There is no such thing as "catching up" or being caught up. Someone will always be upping the ante in some way or another.

I would never argue that KU doesn't benefit substantially from the success of the men's basketball program. However, other than women's volleyball, it would be difficult to state that any other sport annually creates enough buzz to keep alums and donors connected to the university in any meaningful way.

It's also difficult to argue that a football program which has lost to South Dakota State at home, Central Michigan at home, a 1-11 Baylor team at home, and Ohio at home has lost those games because of inferior facilities. I haven't toured SDSU's football facilities, but I'm guessing that their 65 scholarship players, mostly from the upper midwest, didn't go there because of the JackRabbit facility advantage.

I would also argue that cutting a gash in the side of the hill next to the stadium, after adding two outdoor fields on the other side, and a new training facility on the third side, seems to be out-of-proportion with the results on the field. What's next? Sorry Campanile hill, we need a new state-of-the-art wiggly-wham to keep this 3-33 freight train rolling down the tracks.

I would say that a better approach for KU right now would be a general stand-down on football spending. The AD should have already been flushed, as well as the HC. Get in a new, competent regime - maybe just bring the entire NDSU staff down at once - start showing some discipline and some minimal form of success, and go from there.

And please don't cry that river about KU can't win at football. A non-P5 school in a remote Idaho location can do it year-in and year-out and we can't? Wyoming, under a competent coach, can do it and we can't? NDSU can beat both KU and KSU, on their fields, but we can't build a program without an ugly renovation of a perfectly fine stadium?

Enough with the excuses and the whining. Start doing something. There's always an excuse for incompetence, it's just only at KU does it require a $350-million fix.

Robert Brock 6 months, 3 weeks ago

KU just keeps digging itself deeper in the hole. Sad.

David Robinett 6 months, 3 weeks ago

“The bigger perception shift is one away from higher education as a public good and a public responsibility to one that is more of a personal benefit and a personal responsibility,” Girod said.

Red State thinking.

Jeff Coffman 6 months, 3 weeks ago

Dated article from a couple years ago, but this fully supports the commercial theory. This is why I have said that Dr. Girod is remiss in retaining Dr. Zenger. Poor performance is killing us and extending these coaches that are awful is hurting KU.

NY Times article outline the success of Alabama academics , enrollment, and education fundraising.

https://www.nytimes.com/2015/11/07/sports/ncaafootball/alabama-crimson-tide-football-marketing.html

Kenny George 6 months, 3 weeks ago

Despite poor football performance, Zenger inherited a bad situation of decades of neglect to our athletic facilities. He has been able to orchestrate upgrades of most facilities and also has the new Jayhawk Park on his resume. Now is time to focus on football facilities 100%. If his performance is measured only by football wins, then he hasn't done well. If his performance is measured by being able to raise money for facilities then his performance is much better. My question to all is what percentage of his job is measured by football wins? I think it is worth debating.

Ray Winger 6 months, 3 weeks ago

I definitely think that Athletics should find a formula by which they could support academics. What would Chancelor Murphy have advised? What will be the attraction of our great professors? What will be the value of the diploma in the future?

Waylon Cook 6 months, 3 weeks ago

KU being successful in athletics helps enrollment(ask the Cinderellas in the dance). Which means more money for everything else.

Imagine if Girod had taken a marketing class and knew how to build the brand.

2 cucks in a pod.

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