Can we justify College Div-1 Football’s Current Economics? Is BCS an obvious scam?
I have always wondered about the claim justifying expensive college athletic departments, that coaches make more than university presidents; the claim that athletics makes it back in ticket sales, alumni donations, etc.
This article is very revealing. Its long, but even if you read half, you will get the gist, or I’ll also summarize.
This as Husky stadium undergoes a multi-million dollar renovation, while the legislature cuts support to the university, tuition rises much faster than inflation, and this year a hullaballoo was caused by a decision to nudge up the percent of out-of-state students so as to get a little more tuition income for the school (translated, harder for WA residents to get in).
Article mentions that probably only a few college athletic departments in the country, from just the most power-house sports-oriented schools, even break even. Rest are money losers. The initial subject of the article is University of Minnesota, which has not won a Big 10 championship in 42 years, and was out over $1M for being in the Insight Bowl last year. The Bowls are apparently a huge scam that just funnels money into the pockets of the insiders. For being CEO of a “bowl corporation” (incorporated as a non-profit), the pay is $400K to $800K/yr. To play in the Insight Bowl, Univ of Minnesota had to by 10,000 tickets (presumably to resell). The amount they actually sold was about 900. So, there’s a few hundred K out of pocket for the school. And, with the other expenses, including a guarantee that the team and band would arrive at least one week before the game, the total out of pocket was over $1M. Some of these “bowl corporations” donate as little as 3% of the proceeds, making them a very poor “nonprofit” and also in some cases even threatening their tax status (good charities donate up to 75% of thier proceeds).
Article mentioned that if insiders did not control it, it would not have to be this way. The public does want to see bowl games, in person and on TV. There is money to be made. If the universities took control of the process and made it more like a post-season playoffs, it is capable of making a large profit that could indeed go back to the schools. Instead it goes to the pockets of overpaid so-called CEO’s, and other insiders in on the deal.
Very disappointing, tho perhaps not the world’s greatest problem.