Chapter 6 The Athletic Department and the University


Assignments/Internet Questions



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6.13 Assignments/Internet Questions

1. Go to the IndyStar.com database (www2.indystar.com/

NCAA_financial_reports/) and select a university. Scroll through the menu to find football revenue and men’s and women’s basketball revenue. Then scroll through expenses to find the amount of money spent on scholarships. Divide the scholarships figure by the program’s revenue.

2. Go to the IndyStar.com database and select any DI-A institution. Download the athletic department financial information (revenues) and compare it to Tables 6.1 and 6.2. Do the same with expenses and compare to Tables 6.7 and 6.8.

3. Go to the IndyStar.com database and select any DI-A institution. Download the athletic department revenue and expenses. Now go to the OPE database (www.ope.ed.gov/athletics) and find the revenue and expense data for the same institution. How similar are the two reports?

4. If your library subscribes to the Sports Business Journal, skim the last three issues and see what new marketing innovations are being used by pro sports franchises and by college athletic departments. Are any of the new pro innovations not yet at the college level?

5. Choose any three DI schools of your choice. Go the athletic department or athletics web page and see if there is a link to a booster club. Download the information for all three schools and compare and contrast.

6. Go to www.ballparks.com, select football and then NCAA. Choose a conference and then a particular stadium. Have there been any major renovations in the past ten years, including the addition of luxury boxes and other amenities?


6.14 References

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Adams, R. (2006a, March 11). College basketball: Pay for playoffs. Wall Street Journal, p. P1.
Adams, R. (2006b, August 12). Deep in the pocket. Wall Street Journal, p. P3.
Adamy, J. (1997, October 17). Coporate sponsors invest in ‘U’. Michigan Daily. Retreived January 12, 2006 from http://www.pub.umich.edu/daily/1997/oct/10-17-97/news/news2.html.
Adidas says it won’t make Arkansas player wear its shoes. (2005, October 20). Retrieved August 12, 2006, from http://www.sportsline.com/collegebasketball/story/8987679
Alabama banned from bowl games for two years. (2002, February 1). Retrieved September 8, 2006, from http://espn.go.com/ncf/news/2002/0201/1321198.html
Alexander, C. (2004, September 18). Tutors serve as a new recruit tool: Sports ‘arms race’ touts academics. News & Observer, p. XX.
Armstrong, D. (2005, March 14). Winning by losing. Wall Street Journal, p. R10.
Autzen Stadium. (2006, August 31). Retrieved September 5, 2006, from http://www.goducks.com/ViewArticle.dbml?SPSID=3802&SPID=252&DB_OEM_ID=500&ATCLID=22175
Autzen Stadium & Moshofsky Center. (January 14, 2006). Retrieved September 5, 2006, from http://www.goducks.net/sports/football/autzen.shtml
Baade, R., & Sundberg, J. (1996, December). Fourth down and gold to go? Assessing the link between athletics and alumni giving. Social Science Quarterly, 77, 789-803.
Bachman, R. (2005, April 30). NCAA fears sports departments getting too big for own budgets. The Oregonian, p. A01.
Bachman, R. (2006a, January 29). E-mails: To measure the interest of prospects, coaches are turning to companies that utilize modern technology. The Oregonian, p. C01.
Bachman, R. (2006b, January 29). UO’s creative recruiting. The Oregonian, p. C07.
Bachman, R. (2006c, July 31). Building costs drive up price tag for splashy arenas. The Oregonian, p. D01.
Bailey, B. (2005, October 23). Sooner born, Sooner dead. Retrieved August 10, 2006, from http://www.oudaily.com/vnews/display.v/ART/2005/10/13/434f2a222197a
Beseda, J. (2006, July 30). Bob the builder. The Oregonian, p. B1.
Bolt, G. (2001, May 31). Athletic department subsidy at university to be phased out. The Eugene Register-Guard, p. XX.
Brady, E., & Upton, J. (2005, November 17). NCAA recognizes growing problem with costs. USA Today. Retrieved XXX XX, XXX, from http://www.usatoday.com/sports/college/2005-11-17-financial-report_x.htm
Brand, M. (2005). NCAA president calls for value-based budgeting for intercollegiate athletics programs. Retrieved December 6, 2006 from http://www2.ncaa.org/
media_and_events/press_room/2005/january/20050108_soa_speech.html).
Buker, P. (2005, September 6). Broncos’ bid to take it up a notch takes a hit. The Oregonian, p. D01.
Casanova Center (n.d.). Retrieved September 5, 2006, from http://www.goducks.com/
ViewArticle.dbml?SPSID=3802&SPID=252&DB_OEM_ID=500&ATCLID=22183
Coroner examining brutal death of Alabama booster. (2006. April 12). Retrieved September 10, 2006, from http://www.cstv.com/sports/m-footbl/stories/041206aao.html
Duderstadt, J. J. (2000). Intercollegiate athletics and the American university. Ann Arbor, MI: University of Michigan Press.
Earl, J. W. (2003, August 10). The athletics arms race. The Oregonian, p. F01.
Fish, M. (2005, October 22). The Crimson Hide: How Vols boosters dug up the dirt that sent ‘Bama’s biggest braggart to the big house. Retrieved July 18, 2006, from http://sports.espn.go.com/espn/eticket/story?page=crimson
Forestry dean at Oregon State U. draws fire for role in research controversy. (2006, May 19). The Chronicle of Higher Education News Blog. Retrieved May 25, 2006 from chronicle.com/news/article/464/forestry-dean-at-oregon-state-u-draws-fire-for-role-in-research-controversy
Frank, R. (2004). Challenging the myth: A review of the links among college athletic success, student quality, and donations. Knight Foundation Commission on Intercollegiate Athletics. Retrieved May 10, 2005, from http://www.knightfdn.org/
default.asp?story=publications/2004_frankreport/index.html
Fulks, D. (2005). 2002-2003 NCAA revenues and expenses of divisions I and II intercollegiate athletics programs report. Indiana, IN: National Collegiate Athletics Association.
Gaul, G., & Fitzpatrick F. (2000a, September 12). Academic-support efforts helping to win recruiting wars. Philadelphia Inquirer , p. A21.
Gaul, G., & Fitzpatrick F. (2000b, September 12). On campus, an edifice complex. Philadelphia Inquirer, p. A01.
Gaul, G., & Fitzpatrick F. (2000c, September 10). Rise of the athletic empires. At schools such as Penn State, corporate sponsors and boosters fund an athletic juggernaut. Philadelphia Inquirer, p. A01.
Gerdy, J. (2006). Air ball: American education’s failed experiment with elite athletics. Jackson, MS: University of Mississippi Press.
Goff, B. (2000). Effects of university athletics on the university: A review and extension of empirical assessment. Journal of Sport Management, 14, 85-104.
Grimes, P. W., & Chressanthus, G. A. (1994). Alumni contributions to academics: The role of intercollegiate sports and NCAA sanctions. American Journal of Economics and Sociology, 53(1), 27-40.
Heuser, J. (2005, January 20). Massive renovation for Michigan Stadium. Ann Arbor News. Retrieved August 15, 2006, from http://www.mlive.com/wolverines/aanews/
football/index.ssf?/stories/wolverines/20050120_mainstory.html
Johnson, C. S. (2005, November 10). U-system athletics makes $3 million profit in ‘05. Retrieved December 18, 2005, from http://www.montanaforum.com/
modules.php?op=modload&name=News&file=article&sid=4089&mode=thread&order=0&thold=0.
Johnson, G. (2006a, July 31). The Flutie effect. NCAA News, p. 5.
Johnson, G. (2006b, December 22). Football success gives schools reason to cheer. Los Angeles Times. Retrieved December 24, 2006, from http://www.latimes.com/sports/
college/football/la-sp-bcs22dec22,1,4920072.story?coll=la-headlines-sports
Lombardi, J. V. (2003). The sports imperative in America’s research universities. Gainsville, FL: University of Florida, TheCenter. Retrieved April 10, 2005, from http://thecenter.ufl.edu/TheSportsImperative.pdf#search=%22The%20Sports%20Imperative%20in%20America%E2%80%99s%20Research%20Universities%22.
Lovaglia, M., & Lucas, J. (2005, Winter). High visibility athletic programs and the prestige of public universities. The Sport Journal, 8. Retrieved December 17, 2005, from http://www.thesportjournal.org/2005Journal/Vol8-No1/michael_lovaglia.asp
McCormick, R., & and Tinsley, M. (1987). Athletics versus academics? Evidence from SAT scores. Journal of Political Economy, 95, 1103-1116.
McDonald, B. (2003, Spring). The “Flutie factor” is now received wisdom. But is it true? Boston College Magazine. Retrieved May 12, 2004, from http://bcm.bc.edu/issues/spring_2003/ll_phenomenology.html
Michigan fan demographics. (n.d.). Retrieved February 20, 2006 from http://www.mgoblue.com/document_display.cfm?document_id=10571.
Munsey, P., & Suppes. C. (n.d.). Autzen Stadium. Retrieved December 6, 2006, from http://football.ballparks.com/NCAA/Pac10/Oregon/index.htm
Naming opportunities. (2006).. Retrieved July 8, 2006, from GoPSUsports.com web site: http://www.nlclub.com/naming.cfm
National Association of College and University Business Officers. (2006). 2005 NACUBO endowment study. Washington, DC: Author.
NCAA Division I update for Longwood University. (2003). Retrieved May 5, 2005, from http://www.longwoodlancers.com/Sports/gen/2003/Division%20I%20Update.asp
NCAA Division I reclassification timeline. (2005). Retrieved August 10, 2006 from http://www.longwoodlancers.com/Pdfs/gen/2005/11/6/NCAADIReclassification.pdf
Novak, M. (1994). The joy of sports: Endzones, bases, baskets, balls and the consecration of the American spirit (Rev. ed.). Lanham, MD: Madison Books.
O’Neil, D. P. (2006, August 8). Blackberry whine: Text messaging by overzealous recruiters getting out of hand. Philadelphia Daily News. Retrieved August 20, 2006, from http://www.philly.com/mld/dailynews/sports/15225729.htm
Oregon State Board of Higher Education. (2005, January 6). Fiscal status of intercollegiate athletics as of June 30, 2005. Other info??
Orszag, J. M., & Orszag, P. R. (2005). The empirical effects of collegiate athletics: an update. Washington, DC: Competition Policy Associates.
Osborne, E. (2004). Motivating college athletics. In J. Fizel and R. Fort (Eds.), Economics of college sports (pp. 51-62). Westport, CT: Praeger.
Perkins gets raise of $20K. (2006, August 3). Lawrence Journal-World. Retrieved August 10, 2006, from http://www2.ljworld.com
Pickens donates record $165 million to Oklahoma State. (2006, January 10). Retrieved December 5, 2006, from http://sports.espn.go.com
Pittman, Alan. (2001, June 21). Inflated Ducks. Eugene Weekly. Retreived December 6, 2006, from http://www2.eugeneweekly.com/2001/06_21_01/coverstory.html.
Slater, J. (n.d.) Sneak attack: Exploring the effects of Nike and Reebok sponsorships on two college athletic programs Unpublished manuscript. Retrieved July 30, 2006, from http://oak.cats.ohiou.edu/~slaterj/sneak.htm
Sperber, M. (1998). Onward to victory: The creation of modern college sports. New York: Henry Holt.
Sperber, M. (2000). Beer and circus: How big-time college sports is crippling undergraduate education. New York: Henry Holt.
Stern, C. S. (2003). The faculty role in the reform of intercollegiate athletics: Principles and recommended practices. Academe, 89(1), 64-70.
Stinson, J. L., & Howard, D. R. (in press). Athletic success and private giving to athletic and academic programs at NCAA institutions. Journal of Sport Management.
Texas A&M University Center for Student-Athlete Services. (n.d.). Retrieved August 5, 2006, from http://www.aggieathletics.com/academics/index.php
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Zimbalist, A. (1999). Unpaid professionals: Commericalism and conflict in big-time college sports. Princeton, NJ: Princeton University Press.



1 According to Orszag and Orszag (2005, p. 2), approximately three percent of a DI-A university budget was spent on athletics in 1997. By 2001, spending on athletics had increased to approximately four percent. It is important to note that their estimates did not include capital (i.e., facilities) spending. Frank (2004, p. 3) notes that during the period 1995-2001, spending on athletics rose about two and one-half times as rapidly as overall institutional spending. Bachman (2005) reports that “In the Pacific-10 Conference … seven athletic departments doubled their budgets between 1997 and 2003. Three — California, the University of Southern California and Oregon State — tripled theirs.”


2 For example, University of Oregon Professor Jim Earl suggests there is a “big clash of values” between the megabucks athletics at Oregon and the core academic mission of the university (Pittman, 2001).


3 As Brand (2005) noted, “[i]t is critical to note that these budgets have risen at the same time higher education has gone through a series of economic downturns. The financial pressures of maintaining and enhancing large physical plants, competing for, hiring and retaining faculty and staff, and increased technology demands have exacerbated the problem.”

4 Frank (2004, p. 3), claims student fees generally generate 20% of athletic department revenue. About 60% of all DI institutions rely on student activity fees.


5 A more complete treatment of third degree price discrimination in college sports would include the effect of capacity constraints and the fact that the cost of providing a seat for an additional fan is essentially zero until the point of capacity is reached.

6 See, among others: (Fish, 2005) and (“Alabama banned,” 2002). Young was murdered while awaiting sentencing (“Coroner examining,” 2006). Means played one season for Alabama and transferred to Memphis where he finished his football career.


7Does your school have its own College Barbie? See some examples at http://www.rbdolls.com/dolls/college.html.

8 Information about the WRC is available at: http://www.workersrights.org/


9 For a partial list of naming rights for professional and collegiate sports facilities around the world: http://en.wikipedia.org/wiki/List_of_sports_venues_with_sole_naming_rights


10 For an extensive list of expenses that are often omitted from athletic department budgets see Lombardi (2003, p. 21).


11 . Of the 50 schools included in the article, roughly one half had expenses rising more rapidly than revenues.


12 Here’s proof of excess capacity: http://www.nacacnet.org/MemberPortal/ForStudents/

2006SpaceAvailabilityResults.htm

13 In a free market, a rising price will eliminate any temporary shortage. In the case of the latest hot toy, by not choking off the shortage with a higher price the manufacturer can actually encourage even greater demand. A gift that required a great deal of effort to buy may mean more to a recipient, who can proudly show off their new toy to their envious friends.

14 The IndyStar.com information is the most up to date and detailed for public DI institutions. Data are available for football, men’s basketball, women’s basketball, all other sports combined, and the total. Revenue categories include ticket sales, student fees, guarantees, donations, government support, institutional support, NCAA and conference distributions, media rights, concessions, advertisements and sponsorships, and endowments and investments. The expense categories are scholarships, salaries, guarantees, severance payments, recruiting, travel, equipment, games expenses, promotions, sports camps, facilities maintenance, spirit groups, medical and memberships. The database is at: http://www2.indystar.com/NCAA_financial_reports/.

15 Also, publicly supported institutions must broach the issue of the extent to which taxpayers should finance the expansion of athletics departments rather than academic programs or facilities.


16 Goff (2000) mentions that when more transparent, and theoretically sound, accounting estimates were applied to the athletics budget at Western Kentucky University, a $1.2 million surplus was reduced to $300,000. An apparent $700,000 loss at Utah State was actually a $366,000 profit.


17 Some exceptions exist. For example, men’s and women’s ice hockey at Wisconsin–Madison and women’s basketball at Connecticut are profitable programs.


18 Recruits are not the only ones who are impressed. Mitch Barnhart, Athletic Director at Kentucky, recounts a trip he made while he was working at Oregon State. Barnhart and Bob De Carolis, Oregon State’s Athletic Director, went to Eugene, Oregon to look at new athletics facilities on the University of Oregon campus. He said they were “amazed” and wondered “[w]hat have we got ourselves into …” (Beseda, 2006).

19 In a few years, basketball recruits at Oregon should be able to tour a new arena, designed to seat 12,500 and with construction costs estimated at $160 million (Bachman, 2006c).

20 Here’s the math. EV=(.0.01)(+$10,000,000)+(0.99)(-$1,000,000) = –$890,000.

21 Sperber (1998) quotes a university official at a school with a “big-time” program: “We certainly can’t give our students a quality degree … but at least we can encourage students to have fun, and identify with our teams while they’re here … Football Saturdays are great here, and so are winter basketball nights. In our Admissions Office literature, we’ve stopped saying that we provide a good education — our lawyers warned us that we could get sued for misrepresentation” (p. 509).


22 A recent study by Lovaglia and Lucas (2005) buttresses Sperber’s survey. However, there is evidence to the contrary. A survey of 500 high school seniors in 2000 (“Intercollegiate athletics,” 2000) suggested that only 10-15% considered intercollegiate sports to be a significant consideration in their choice of college or university. Of greater weight were job and internship opportunities, student organizations, community service opportunities, and intramural sports. The report also suggested that students who most considered intercollegiate sports to be an important consideration had “significantly lower SAT/ACT scores and household incomes than those who did not” (p. 3).

23


 In fairness to high school seniors everywhere, they might choose a school based partly on its athletic programs even if they have no intention to party before, during and after big games. A record of winning sports teams may convince the general public that all of the university’s programs are of high quality, including academics. If employers are influenced by a school’s reputation as a winner or loser, even subconsciously, then it makes sense for prospective students to take this into account. Sperber’s survey did not ask students why they valued athletic success.


24 Rarely mentioned is that if you can show that you can pay list price tuition, especially if you are an out-of-state student, you will be admitted to virtually every public? college or university in the country regardless of your GPA or your SATs.

25 Sperber suggests that a beer and circus campus environment may be necessary for the Flutie effect to work. Economist Victor Matheson argues that the Flutie effect may operate in a manner similar to “loss leaders” at retail stores, schools use athletics to get prospective students “in the door” (see Johnson, 2006b).

26 See, e.g., McCormick & Tinsley (1987), Grimes and Chressanthis (1994), and Baade and Sundberg (1996).


27 Grimes and Chressanthis (1994) found that bad publicity, especially major violations of NCAA rules, cause donations to fall. This literature is summarized in a study by Stinson and Howard (n.d., p. 16). They differentiate between alumni and non-alumni donations to academic and athletics. Their results point to some of the complexities involved in attempting to predict how athletic performance will impact giving. They suggest that variations in athletic success tend to impact alums and non-alums giving about the same, “team success does appear to influence donors to athletics programs more than donors to academic programs.”


28 Sperber does mention some exceptions; here’s one: “In my four years at Michigan State, I have had exactly four classes under twenty-five students and a real professor in charge. All the rest of my courses have been jumbo lectures with hundreds of students, and a professor miles away, or classes with TAs, or not regular faculty, people who come in off the street and teach a course or two” (Sperber, 2000, 78).




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