5/27/2011: The Senate Intercollegiate Athletic Committee has posted a little data on the Senate website. This year *all* arena bond repayments come out of the legacy fund. They are predicting a nearly 4x increase in arena revenue over the next 4 years, from $3.7 million to $12.2, at which point they predict they will be able to start accumulating a little cushion.
I’m no economist, but this seems unlikely. I predict they continue to blow through the legacy fund, padding their salaries, then go back to Uncle Phil for more cash – at which point he will jerk the chain of whoever is President and call for still more craziness, presumably a covered football stadium or some such.
Meanwhile I hear from the sports reporters that AD Rob Mullens is still claiming UO Athletics is self supporting. When asked about the Jock Box subsidies, he just pats the $2 million in his back pocket, and gives them that smile.
Hello UO Matters, and since I didn’t have a chance let me say welcome to the IAC. A note on “The some data on athletics” post: The 3.7M revenue number was for revenues at Mac Court. One big point of opening Matthew Knight Arena is that it should bring in much more than that, both in basketball and in outside events (I for one am going to the circus next week). We discussed things a bit on the IAC this year, and the $12.2M estimate seems reasonable based on experience so far. We’ll look forward to having your input on numbers discussions in the coming years.
Thanks Dev – but do you think that extra revenue will go anywhere but to AD salaries? For example, to pay for the jock box tutoring, legal fees, etc?
Have fun at the circ, I’m a monster truck guy myself.
The revenue will go to supporting what it usually does: infrastructure, scholarships (over $10M worth), coaches salaries, administrator salaries, travel, compliance officers, accountants, a heck of a lot of employees counting the ones who just work a few times a year, etc. Running Autzen for a single game is a huge, expensive undertaking (which of course brings in a lot more money, but the point is that when you back out fixed costs needed to make the money, the $70M budget doesn’t seem so big).
The $12M is what is needed for them to be in line for making their budget. If they make less, they’d need to make cuts or find $ everywhere. If they make more there and hit the marks elsewhere, it would probably first go to getting back in line with the Legacy Fund plan (drawing down less). They could also spend it on more travel, salaries sure, adding another womens’ sport in a decade, etc. I don’t think it would go to SSA (a control matter) or legal fees.
As for AD salaries, they seem in line with the industry, but if you’re really curious and think it is likely they are out of line, we could ask for a study. Yes, they earn more than professors, but to my knowledge of the private sector not more than people with similar skillsets elsewhere.
Seriously? You don’t think the AD should start paying down the subsidies the academic side gives them?
Add up the Jock Box operating costs, rental cost of the land, parking, legal fees, lottery fund money, etc – you get over $4 million pretty quick. UO paid the DOJ close to $100,000 just for the Grier/Bellotti investigation. The donations to the athletic side, including Knight’s legacy fund donations, are tax-deductible only under the argument they serve UO’s academic mission. But athletics *costs* us money. And as Dennis Howard shows, it probably also costs the academic side donations.
The only way to get this under control is to take the money off the top, before the AD gets a chance to spent it on salaries and bonuses.
I’m not against sports – I think UO athletics can help the academic side – but they aren’t going to do it without some pressure!
Rob Mullens’s old department at Kentucky gave $1 million a year towards academic scholarships. This seems like a good target for the IAC to shoot for, for starters. Can’t hurt to try, can it?
At this moment, I do not think they are in a position to send over monies to the general fund. Given how ambitious the arena plan is and how much growth there has been, it will be a feat for them to stay within their means in paying for athletic events.
Yes, donations to the athletics are tax-deductable insofar as they serve the UO’s academic mission. If we believe that an NCAA athletics program does not serve that mission intrinsically, then those should not be tax-deductible, and as I have said elsewhere on UOMatters we should shut down the athletic department. Athletics costs all but a handful of schools millions of dollars per year – schools ranging from MIT to SOU to UNC. In some cases in big-time division one sports, university presidents feel squeezed by the pressures to keep the programs high-profile. But I think President Lariviere made his views on this clear through hiring a fiscally-minded leadership team for the department.
Why can’t schools agree to limit the arms race going on? Just cap how much can be spent by any one sport, for example. I suppose programs on the rise would be worried they wouldn’t be able to get ahead of established programs, but fans would still be fans even if the coaches were paid $2 million a year instead of $3 million. I would love to see a cap tied to turning student-athletes into student employees and giving them some spending money for their hard work.
UO football makes millions. Much of it goes to the coaches – I think there are 8 UO football coaches making more than $200K. The rest goes to subsidize other sports.
If we cut back to football, basketball, track, and a couple of women’s sports to get the necessary gender balance, there would be plenty of money to pay the coaches top salaries, and have a large surplus available for the academic side.
If Rob Mullens and Jamie Moffitt are right about how tight the athletic budget is, they need to put a proposal to cut some sports on the table.
Taking millions from the academic side to subsidize their budget is just not sustainable. If they aren’t ready to make tough decisions, Lariviere needs to make them.
The dog actually has a lot of knowledge on the inside workings of the NCAA in this regard and was an occasional consultant to its past president, Myles brand. There are a few ways to address this issue and I will try to be brief.
1. This is a little like Tenure – tenure can be regarded as a poor system if it generates too much deadwood (Dog has been deadwood for so long dog can’t remember when dog was not). Now, which university is going to be brave enough to give up Tenure? Will any potential faculty even apply for a job there.
2. There is much sentiment in the NCAA that things are out of control and getting worse.
The one viable, uniform mechanism that has been proposed is a uniform “tax” on all athletic gifts of some percentage that goes directly to the University’s general fund. The problems are
a) it is perceived that donors would not give in the face of this tax and b) it might directly be prohibited in terms of donor policy (i.e. directed donations can’t be shifted). The real issue is the size of the Tax – when I did my math consulting to the NCAA on this issue in 2004 I suggested a 5% TAX would be enough to start a precedent. However, University administrators that were consulted on this all wanted a tax of at least 1/3 – that is just not going to happen.
3. Most recently, TV supercontracts have reinforced the arms race. This essentially was the incentive to form the PAC-16 (only got as far as PAC-12). Its very hard to agree to limit when suddenly hundreds of millions of dollars are dumped in to some conference and its really the rise of these conferences that have dragged everyone into this arms race. Remember, Notre Dame has their own football channel.
So in sum – there is widespread recognition that
the arms race is bad – but just like grade inflation, what the hell can you really do about this system wide?
In addition, UOmatters point about subsidies to fund other sports has long been one of the drivers and that particular driver is necessary.
Finally, there has been some talk about a “Salary Cap”, similar to what is in the NBA, that would be put on conferences – but so far its just talk.