It’s Going Down

[LSUDad]

Giddy Up

 

Woodward on fund-transfer policy: “We can not sustain what we’re currently doing”

July 29, 2019 Tyler Nunez 0

 

Times are changing around LSU athletics, as with a new athletics director comes new policy. 

And one new policy change under LSU’s new Athletics Director Scott Woodward will affect the university his department is connected to directly. 

Under an unprecedented fund-transfer policy initiated by former LSU athletics director Joe Alleva, the LSU athletics department contributed millions of dollars to the academic institution that is LSU. Between 2012 and 2017, LSU athletics contributed nearly $50 million to the university under this policy despite the initial guarantee being just $36 million during that time. 

But in an exclusive interview with Tiger Rag, Woodward said that policy will no longer continue under his watch, at least not as it has existed in recent years. 

“It’s something that’s very dangerous, when universities rely on recurring money, especially from an auxiliary like the athletic department,” Woodward said. “So no, I think, while I will always support the university in some form or fashion, we can not sustain what we’re currently doing.”

Woodward confirmed his belief that it’s not the athletics department’s responsibility to bail a state school out. 

He also eschewed any responsibility the Tiger Athletic Foundation might have to incentivize donors to donate to the LSU Foundation or the LSU Alumni Association. 

“I think that’s the wrong question,” he said when asked about that possibility. “I think the right question is ‘What are our current donors at TAF doing for the university?’ And I have a feeling that… in both places I’ve been (Texas A&M and Washington), on average they give 1.5 times more to the academic side. I’m sure that’s the case here. 

“You can’t just bifurcate or trifurcate our donors as TAF donors or LSU Foundation Donors or Alumni Association donors or Ag donors or whatever kind of donors you want to put in. You get a cross in all sorts of ways. We feed off each other, and it’s a very healthy, positive thing.”

That reasoning somewhat echoed the words of LSU President F. King Alexander, who vaguely addressed the controversy Wednesday during a ribbon cutting ceremony for the new $28 million football operations center. 

“I’d like to thank… all the TAF donors who made this happen,” Alexander said. “Many of you guys, probably the vast majority have supported athletics and academics on our campus, on both sides of Nicholson Drive. We’re proud that you’ve been able to contribute so much so consistently for our program and our university as we go forward.”

The announcement came during a week in which questions arose about the perceived disparity in quality between athletic facilities and those on the academic side of campus. 

LSU’s new $28 million renovation to its football operations and nutrition center sparked an outcry from students and faculty about a number of budget concerns the university itself is facing, including the state of Middleton Library, which currently has flood damage among other longer-lasting issues.

Woodward made a point to make perfectly clear his support of the academic institution he received his bachelor’s degree from, and he even added, vaguely, that when it comes time for a new library, LSU athletics will support the venture, though he did not specify how or whether that support will be monetary.

“There are a lot of good things going on, not only in athletics but across campus,” Woodward said. “I think President Alexander did a good job of explaining that. To take things out of context anecdotally sometimes is part of it, but in no way did it detract from what we’re doing. We’re very proud and happy with what’s going on.”

During the ribbon cutting ceremony, Alexander also broke down a list of approved capital projects funded for campus under the leadership of Governor Jon Bel Edwards and Commissioner Jay Dardenne. These included a renovations to the Huey P. Long Fieldhouse ($20 million), the university’s art studio ($13 million), Memorial Tower ($5 million) and the veterinary clinic ($5 million). 

“It is rare that we have this capital success,” Alexander said. “… In addition to being the best at what we are right here in football and athletics, we want to be the best at everything. We want to win Heisman Trophies and Butkus awards, but we also want to win Nobel Prizes.”

While the university will lose some funding from this project, it seems from the outside that Woodward and Alexander are on the same page. Both want LSU to succeed in both academic and athletic venues. 

“In my time here, whether I was a student or working here, I like the mantra that Mark Emmert told me: we’re going to be great at physics, football and everything in between,” Woodward told media at the football operations center Wednesday. “That’s what matters. That’s what we’re about here at LSU.”

LSU athletics may not directly contribute funds to the university any more, but Woodward doesn’t want that to result in a lack of revenue. He just feels it will be healthier if that revenue to come from other avenues. 

“We’re going to continue to try to get better, not only at TAF, but I know President Alexander is working on the Foundation doing aggressive and good things, which is a matter of all of us alumni to step up and give back to the university. I think you’ll see that going forward in a big way.”

[LSUDad]

A little more...

 

Athletics

Myth: College Sports Are a Cash Cow

 

 

 

 

 

Outside my office door, there it looms. Sanford Stadium, complete with its fabled privet hedges and 93,000 screaming fans on fall Saturdays, lies in the very center of the University of Georgia (UGA) campus, with the humanities and social sciences buildings on the hill to the north and Ag Hill to the south. It’s quiet this time of year, but the video advertising boards that flicker on periodically are an LED reminder of the South’s year-round love affair with college football.

This is the most visible symbol of the UGA Athletic Association, a not-for-profit organization that in fiscal 2011 recorded operating revenues just shy of $90 million. That money enables the association to send its golf teams to Puerto Rico, track teams to Washington State, and Gym Dogs to Utah. Here and there, the Athletic Association also endows professorships and funds a few campus-wide projects.  

As munificent as this is, this kind of spending is typical of big-time college athletics programs at universities across the country. The Chronicle of Higher Education recently estimated that college athletics is a $10-billion marketplace. What sets UGA athletics apart is that it can pay for its expenses without turning to the university for help.

Only seven other athletics programs at public universities broke even or had net operating income on athletics each year from 2005-2009, according to data provided by USA Today to the Knight Commission on Intercollegiate Athletics (for which I consult). The others were Louisiana State University, The Pennsylvania State University, and the universities of Iowa, Michigan, Nebraska, Oklahoma, and Texas at Austin.  

Like these peers, Georgia’s athletics department is flush because it can depend on donations, ticket sales, royalties from rights fees and sponsorships, and distributions from lucrative television contracts. It is no surprise that the other members of this elite fraternity belong to the Southeastern Conference, the Big Ten, and (at the time these data were collected) the Big 12. 

For almost every other university, sports is a money-losing proposition. Only big-time college football has a chance of generating enough net revenue to cover not only its own costs but those of “Olympic” sports like field hockey, gymnastics, and swimming. Not even men’s basketball at places like Duke University or the University of Kansas can generate enough revenue to make programs profitable.

As a result, most colleges and universities rely on what the NCAA calls “allocated revenue.” This includes direct and indirect support from general funds, student fees, and government appropriations. In other words, most colleges subsidize their athletics programs, sometimes to startling degrees. 

The six elite leagues in Division I are those that participate in the Bowl Championship Series: the Atlantic Coast, Big East, Big Ten, Big 12, Pacific-10, and Southeastern conferences. Even with bowl-game revenues and television contracts, however, public institutions in those conferences provided an average of $5.9 million to athletics in fiscal 2009, including $2.4 million in direct general-fund support and another $2.4 million in student fees.

In other Division I conferences, public institutions subsidized athletics programs with $9.6 million on average in 2009. In the Mid-American Conference, for example, average institutional subsidies rose from $12 million to $16 million between 2005 and 2009. Direct institutional support nearly doubled, from an average of $4 million to $7 million annually, while student fees contributed an average of approximately $7 million.

Why? Cornell economist Robert H. Frank applied his concept of the “winner-take-all” market to college sports in a 2004 white paper for the Knight Commission. “Suppose 1,000 universities must decide whether to launch an athletic program, the initial cost of which would be $1 million a year,” Frank wrote. “Those who launch a program then compete in an annual tournament in which finishers among the top 10 earn a prize of $10 million each… How many schools will decide to compete?”

In other words, 10 programs will have a net income of $9 million, and the remaining 990 will lose $1 million. Despite the almost certainty of substantial loss, in the past decade only two institutions have left this marketplace—Birmingham-Southern College and Centenary College of Louisiana. In fact, Division I has added 21 member institutions since 2000, bringing its total membership to 337.

Of course, athletics programs foster other, less-clearly defined but important benefits for their institutions. At liberal arts colleges like the one I attended, varsity sports drive enrollment. Should that count as profit? Any number of UGA students will tell you they came here because of the football team. What about goodwill generated among legislators and donors?

These are important considerations. Significant athletics investments may indeed be a good value proposition for building community, spirit, and support. However, no good measures exist for assessing these less-tangible achievements. Most studies find no link between winning teams and measures of institutional success like number and quality of applications, fundraising dollars, or state appropriations.

Justifying institutional spending on athletics is becoming a much more pressing issue for most programs, especially in Division I. Institutions with Football Bowl Subdivision programs have seen subsidies of athletics rise by 53 percent at the median from 2005-2009, according to the Knight Commission. Meanwhile, spending on education and related functions rose only 22 percent. There are similar gaps at other Division I institutions. 

If such trends continue, athletics subsidies will continue to grow, both in real terms and as a percentage of institutional budgets. For college presidents and academic leaders, it will be necessary to assess such investments in athletics in terms of opportunity cost. How else could general funds and student fees be spent?

College sports can be a marvelous value experience and a focal point for community-building. But only a few colleges have programs that can provide such benefits without imposing significant costs on their institutions

[Fishhead]

Scott knows we need to beat Alabama, which is his job. He's not responsible for what occurs across campus