High-dollar college sports: Columnist says it's time for Congress to take a look | Arkansas Blog

Friday, November 27, 2015

High-dollar college sports: Columnist says it's time for Congress to take a look

Posted By on Fri, Nov 27, 2015 at 7:15 AM

click to enlarge JEFF LONG: Says books balance at UA.
  • JEFF LONG: Says books balance at UA.
Sally Jenkins drew some attention in the Washington Post yesterday for an opinion column about the explosion of spending by major college athletic programs thanks to TV contracts and the fact that a number of schools run a deficit despite the huge cash flow. She was inspired by a project earlier in the week by the newspaper about sports spending.

Over the last decade, the collective income of the top 48 college sports powers has virtually doubled, to about $4.5 billion dollars tax-free, yet the majority of them still manage to lose money. Who is running these places? Marcus Prinz von Anhalt and the Duke of Saxony?

For years, athletic directors have styled themselves as CEO-types and moaned about the difficulties of managing costs. But a Washington Post project published earlier this week shows that these so-called executives are about as fiscally responsible as Gabor sisters serving sevruga in chinchilla capes. The truth is, their deficits aren’t a necessity. They’re a choice.

Athletic departments take in more money than ever — and spend it just as fast

.... The median athletic department in a Power Five conference has seen earnings balloon to $93.1 million thanks in part to massive new TV contracts, yet 28 of 52 state schools are in the red, including seven in the Pacific-12 and a half-dozen in the ACC, led by Virginia at a whopping negative-$17 million. The reason is not complicated: It’s sheer excess and improper self-reward by athletic directors. Over the past decade, pay for administrators has risen by $300 million.

As matters stand, athletic departments aren’t answerable to anyone, budgeted separately from the university and almost completely unregulated. Their only real oversight comes from high-dollar donors. The reason for this is that years ago college presidents tried to wash their hands by allowing them to become stand-alone entities that raise and spend funds however they wish. Author Gilbert Gaul, in his new book “Billion Dollar Ball,” likens them to hedge funds or entertainment divisions rather than academic entities. As one Texas administrator put it to Gaul, “We eat what we kill.”

Jenkins said it was time for Congress to ask athletic departments to explain their spending habits.

The University of Arkansas doesn't run a deficit nor does it tap students for income, but its spending has exploded thanks to the SEC football contract. It, too, keeps a lot of its financial activities off the public books by washing income and outgo through the Razorback Foundation.  Athletic Director Jeff Long got asked about the Jenkins article on Twitter yesterday and he responded.

screen_shot_2015-11-27_at_6.46.29_am.png

(I commented on Twitter in response that the big TV contract made it easier to balance the budget. That factual flat comment seems to have gotten me blocked from following or commenting on Jeff Long's Twitter account. I'll now have to follow him Rapert-style, from a separate pseudonymous Twitter account. Long, who makes $1.1 million a year, must be a touchy short. UPDATE: Kevin Trainor of the Athletic Department says Long did NOT block me from following his Twitter account yesterday and would appreciate if I corrected this item. All I know is what the Twitter page shows — and still at 2:30 p.m. Friday.)

click to enlarge longscreenshot.png

It happens that I'd inquired about the TV deal on behalf of a reader a few days ago. Kevin Trainor of the Athletic Department provided this information on the income and how some of it finds its ways outside the Athletic Department:

The  SEC’s annual distribution as approximately $31.2 million last year. The majority of that revenue distribution is from television revenues from the various networks (CBS, ESPN, SEC Network) while also including revenues generated by bowl contracts, appearances in the NCAA men’s basketball tournament etc. The dollars are budgeted and received in the Athletic Department.

Beginning in 2009, Razorback Athletics committed $1M to campus from new television revenues at that time. Recently, another $1.25M commitment was made to campus for Champions Hall is from additional revenues received from the SEC Network. This year, in total, Razorback Athletics has committed $2.25M ($1M + $1.25 champions hall) back to campus from revenues generated through SEC television agreements. In addition, the department contributes to other initiatives and programs on campus including ASG, Sports Journalism, and ACT Initiatives.

The Athletic Department budget in 2014-15 was almost $90 million, up almost 20 percent over a two-year span. But that budget forecast SEC income $6 million less than recently reported. Arkansas Business showed the spending in major categories. (The Washington Post project, which gathered updated figures, put Arkansas at $94.9 million, a middling amount in the SEC. It operated in the black (by $200,000), unlike South Carolina, Ole Miss and Auburn.) 

click to enlarge screen_shot_2015-11-27_at_6.56.19_am.png

Here, by the way, is the link to the Washington Post inspection of college spending and the 28 colleges operating at a deficit.

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