Born to Lose

Ashlen Dube
Other Side Sports
03/01/10

The idea of losing isn't very popular in sports.  Everyone wants to focus on the winning team or athlete, but the reality is that there are a lot more losers in sports than there are winners.  Each year, there are 29 losing teams in Major League Baseball, 31 losing teams in the National Football League, and 346 losing teams in NCAA Division I men's basketball. 

There are more money losers in college sports than there are money gainers.  This is true of all sports in all divisions.  This may be surprising to many because a lot of attention is focused on the revenue sources in big-time college athletics.  Today, a handful of athletic squads, mainly football and men's basketball teams in the BCS conferences, enjoy many high payout revenue sources.  This is the era of billion dollar television contracts, conference owned cable networks, multi-million dollar branding deals, bowl payouts, and boosters with seemingly endless bank accounts.  Like the on-the-court action, however, many people focus on the money winners, revenue, rather than the much more numerous money losers once expenses and revenue are both considered.

The same schools that receive all the revenue have many football and basketball related expenses.  The biggest expenses are the facilities and their frequent renovations designed to help the team stay competitive.  Only a handful of athletics departments are profitable without subsidization, but the bulk of facility costs are paid for outside the athletics department budget even though the athletics department gets the revenue from ticket sales.  If the facilities expenses were put under the athletics department budget, where it belongs, the budget sheet could be considered crime scene evidence with all the red ink.

Naturally, there are other losses.  More often than not, football and men's basketball head coaches in the BCS conferences make over a million dollars.  In some cases, like Texas football coach Mack Brown, they make well over four or even five million dollars per year.  Assistant coach salaries are now starting to push the million-dollar barrier.  Not only that, but there are many, many assistant coaches and coordinators at these programs.  Non-BCS Division I head coaches frequently make over a million dollars per year as well.  These salaries will continue to rise because the coaches know that schools are desperate to win in football and men’s basketball.  Elite coaches are practically handed a blank check with a large base salary, cupcake bonuses, and frequent contract extensions even though coaches are often fired with years remaining on those multiyear deals indicating that schools seem more than willing to pay millions of dollars for multiple people even though only one person is actually coaching at one given time.  

The television networks would not sign billion dollar contracts if the schools and conferences offered a poor on-the-field or court product.  Thus, we now have a situation where not only are coaches flying private jets to meet recruits, but they fly helicopters to recruit's high school games to impress the recruit, their family, friends, and classmates.  It is not unheard of for schools to build their football and men's basketball locker rooms with big screen televisions in each locker in order to impress recruits.   

Even football bowl games, the games so protected by the schools because of their payouts, are often money losers.  It seems that fans are starting to understand that a berth in a no-name bowl game is quite meaningless.  Thus, the fans no longer travel to the games.  Still, however, schools have to buy a certain number of tickets in order to accept a bowl invitation.  Many of those tickets go unsold at a major loss.  The schools feel like they have to attend the no-name bowls because they get extra practice time and because they perceive that there is a recruiting advantage by attending a bowl game.  Even the schools that make it to major bowls, like the BCS bowls, can and have lost money on the bowl game.  This is because they feel compelled to fly, house, and dine important stakeholders at the bowl games like administrators and boosters.  As you can imagine, administrators and major boosters aren't going to settle for lodging at the motor inn and pork and bean dinners.

As illustrated above, boosters aren't always a positive to a program's bottom line.  Yes, boosters can provide much needed funds (which are tax deductible making college sports even more subsidized by the public), but their demands can end up costing a school money.  For example, a booster may put up a large sum of money for a stadium renovation or athletics hall of fame bearing the donors name, but the booster will want the facility to be top class.  After all, the booster wants their name represented by the best.  Also, they want the program to have as many recruiting advantages as possible.  Unfortunately, the large sum of money put up by the booster isn't always enough to pay for the best facility in the nation.  Therefore, the university has to pay the difference.  Add that to the loss column.

College sports are a lot like a professional auto racing team.  Racing teams almost completely rely on sponsorship money.  However, when a company sponsors a team, they want all their money to be spent on making the race team more competitive.  Thus, the racing team cannot save money for future use.  After all, the sponsor wants the team to win now when their name is on the car, not years down the road when their name isn't on the car.

In college athletics, the schools and boosters are the sponsors in addition to the corporate sponsors.  Some boosters have philanthropic reasons for donating, but obviously there are those trying to sponsor the winning team.  Clearly schools are not sponsoring sports because they are sound monetary investments.  Instead, they sponsor sports to keep politicians, alumni, board members, and many others from getting angry to a point of firing the university administrators.

It is commonly believed that the so-called revenue sports, football and men's basketball, fund the non-revenue sports.  This may be true at a few schools, but it is not uncommon for football alone to lose more than multiple non-revenue sports combined because of the competitive demands detailed above and the large squad sizes that leads to high scholarship and travel expenses.  On top of that, football necessitates the need to have additional non-revenue women's sports to balance out the scholarships.  This leads to a situation where men's non-revenue sports and expensive women's non-revenue sports are cut to make sure the sports that put administrators in a pressure cooker, football and men's basketball, receive as much money as possible.  The non-revenue sports exist to keep schools compliant with NCAA and Title IX regulations that allow the schools to participate in the deeper money pit of revenue sports.  Calling revenue sports a deeper money pit may not make sense at first glance, but it makes perfect sense once expenses and motivations are considered.          

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ASHLEN dUBE

Ashlen Dube operates the Other Side Sports website.  Other Side Sports is dedicated to studying the interaction of sports and education.  Visitors of all experience levels are encouraged to contribute their opinions on the new Other Side Sports forum.

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