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Friday, April 28, 2017

Athletics: Follow the Money

Two weeks ago, I blogged about "Papa" John Schnatter's widely publicized comment that "Until you fix athletics, you cannot fix this university." As I wrote, local journalists and University of Louisville leaders reacted to that remark as if they did not see any problems with Athletics -- and could not conceive of them.

For example, in today's Louisville Courier-Journal, Athletics Board member Bill Stone was quoted offering "praise and support for [Athletics Director Tom] Jurich's leadership and said that other areas of the university are what needs fixing."
'Oh my god, our athletic department is the envy of the country," Stone said. "... We need to put our effort into University Hospital and bring that health care facility back to where it was, where it was the place of choice. That's where we need to spend our attention, not on what works.'
Local radio personality Terry Meiners was also puzzled: “'His comments at the board meeting made zero sense to me,' Meiners said. 'And I mean zero-point-zero.... Everybody’s a little baffled with this one.... I grew up here,' Meiners said. 'I’ve seen the difference in the growth of the school starting Day 1 with Jurich. It’s as if he’s built an entire civilization that we were thirsting for in our community.'”

Despite the apparent bewilderment of local elites, my post referenced some potential areas of concern and linked to several of my previous posts on the topic. Additionally, in the interim between the first story and today's, reporter Tim Sullivan did some research:
Stephen Clark, a tenured professor who has spent 18 years at U of L, perceives Jurich not as “invisible” but “untouchable.” 
Athletics is truly untouchable at this university,” Clark said via e-mail. “It has a different set of rules than all the schools within the university. That goes for things such as ‘conflicts of interest’ particularly. 
“... While athletics means so much to a university, the athletic director and coaches should be under the control of the administration of the university and should operate under parallel guidelines. I don't think that's true at U of L.” 
Student Body President Aaron Vance, whose office entitles him to a seat on the Board of Trustees, seconded Schnatter’s vague statements in a post-meeting tweet: “Papa gets it,” Vance wrote. “Something we have all been thinking here for years.”  
...The U of L Athletics Association operates independently of the university’s general fund and boasts at least 15 straight years of balanced budgets, but its spending patterns could be seen as extravagant in those departments with tightening belts and by those students dealing with rising debt.  Monday, Vance's Twitter feed included a copy of a 2011-12 student government resolution urging U of L to abolish its $50-per-semester student athletics fee.
This week, Athletics is firing back. Yesterday, as the C-J reported, Associate athletics director Kevin Miller "presented an information sheet detailing the amount of money the athletics department provides to the university and vice versa." First, Athletics did recognize that some of their costs are borne by the rest of the University:
According to the document, the athletic department receives a total of $7.344 million in benefits from the university and U of L student fees. Those benefits are $3.263 million in expenses, mostly related to the costs of utilities at the sports facilities; $1.323 million in gender-equity funding; $829,900 in assistance to boost student-athlete academics; and $1.928 million in student fees ($50 per student per semester). 
What about the other side of the relationship?
In turn, athletics reportedly accounts for $30.6 million in tuition, room, board and books for the university due to the presence of student-athletes, managers, spirit groups and the pep band at the school, according to the information sheet.   
The athletic department also provided $4 million to the U of L general fund ($2 million in 2013-14 and $2 million in 2016-17), according to the document.
I have previously mentioned the relatively paltry sums (a few million dollars) that Athletics has provided during particularly difficult years for the University. In reality, those mostly offset the student fees they collect.

The $30.6 million is a more interesting question. Does Athletics subsidize education for all of those students, or does this figure include funds paid by students enrolled in the University? I suspect the latter since the 2014 and 2015 Athletics audit posted online revealed only about $13 million in total athletic scholarships.

So what is missing from the figures Athletics provided yesterday?

First, if the discussion is going to consider revenues collected by one institution thanks to the spending of the other institution's students, then UofL should receive credit for ticket sales to students (and alumni). I haven't seen a breakdown focusing only on students and alums, but UofL athletics collected about $27 million in ticket sales in 2015. For 2016, media reports placed those revenues at just under $30 million.

Not all students or alumni attend games, of course, but many watch those events on television or listen on radio. UofL Athletics has been collecting significant sums from direct TV deals and shared payments from the Atlantic Coast Conference: about $13 million in media rights fees and $7 million from the ACC. That's $20 million more thanks to students, alumni and other fans of the University's teams.

UofL Athletics also collects about $29 million in contributions from donors. As I've blogged previously, some academic research suggests that those donors might otherwise give to the University if Athletics was not asking them for cash.

Finally, there is the matter of the University of Louisville name. When individual UofL athletes depart the campus, a few become stars in the NBA or NFL and help their franchises collect big profits. Presumably, the players are rewarded with lucrative salaries.

However, the largest portion of former UofL basketball players (which is UofL's most lucrative sport) toil in relative anonymity in development leagues or foreign leagues. The players are presumably more skilled and experienced once they leave campus, but they no longer generate nearly the same revenues for their new programs. UofL fans cheer these players, and pay for tickets, sweatshirts, and TV ads, precisely because they wear the cardinal red of the local sports team and perform their feats on local courts and fields.

Does UofL Athletics pay the University for this association? No. Instead, Athletics collected $23 million in licensing and royalties in 2013.

Literally, Athletics rakes in tens of millions of dollars annually thanks to its affiliation with the University.


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