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The NCAA's Radical Budget Proposal

When radical ideas come from a witty and entertaining blog, dripping with satire, that is one thing. When radical ideas are formally presented by an expert at the annual NCAA convention that is something else altogether.

Smith College economy professor Andrew Zimbalist's plan consists of three areas of concern:

  • Reducing coaches salaries
  • Cut football scholarships
  • Replace the BCS with an NCAA playoff

Currently, athletic expenditures are increasing at a rate four times those of the academic expenditures among NCAA members.  Budgets are being reduced, particularly in division II, by cutting the seasons of non revenue sports and reducing the size and duration of stay for travel parties. Zimbalist stated that these measures are not a permanent fix and present Title IX issues without addressing the core economic issues.

This message was reportedly well received by the university presidents, indicating an economically motivated shift in the political landscape for the BCS far more threatening than the growing congressional pressure looms on the horizon.

Some background on this presentation and a look at the details next...

Star-divide

This study was performed due to the current economic crisis but also addresses the Big 12's proposed watering down of the bowl eligibility requirements. The final ruling on that proposal will likely be unknown until the NCAA 2010-2011 football rule changes are published.

The Big 12 proposal inspired me to launch my tier based plus one two months ahead of the original plan, to be released with my most recent plan. This design was sent to the primary football contacts for all conferences and independents on November 3rd.

Now, lets look at the ideas presented by Zimbalist:

Reduce Coaches Salaries

I think we can all agree that the salary coaches (and a wide sector of entertainers and CEO's) receive has gotten ridiculous. Many teams, especially automatic qualifying conference bottom dwellers, find themselves needing to hire coaches whose fair market price tag takes them to the breaking point of their budget.

This escalation of cost and expenditures, which includes facilities and training processes, plays a large role in forming the reality that only 25 of the 120 FBS institutions produce revenue to support the institution. The majority of the remaining institutions are funded in part by the institution, adding to costs that are often tax funded.

The NCAA would need to be granted an anti-trust exemption from congress to restrict the free market value of coaches salaries.

This is the point I agree with most. I would go further and support the idea that coaches should be tied to investigations under their watch at prior institutions. (We can call it the Kiffen rule.)

Cut Football Scholarships

Currently, FBS teams are allowed 85 scholarships. NFL teams suffice with a roster of 61 players. This would further increase the parity of the league, improve pressures on Title IX and reduce costs, as less players would require less trainers and support staff.

This fails to account for the fact that NFL teams, unlike universities, can quickly replace injured players with available unsigned talent. Most successful teams also have programs that develop players into their system, typically making the freshmen class (1/4 of the players) unlikely to play.

If any reductions in scholarships occur I would like to see this balanced with rewards to those institutions that have the best graduation rates. The NCAA too often enforces change with a stick. Why not offer rewards to teams that excel beyond the minimum guidelines?

Why not cut scholarships to 75, but allow 10 additional scholarships to institutions ranking in the top 25 among the 120 FBS institutions in either the federal graduation rates or the GSR?

Replace the BCS with a Playoff

Zimbalist's economic argument against the BCS rests on three points. The BCS is a) flawed, b) unfair and c) anti-competitive.

In the 11+1 years of the BCS, 98 automatic qualifying conference members were invited while only six at large conference members were invited. The automatic qualifying conferences earn 85% of the revenue, allegedly robbing smaller schools of dollars needed to be competitive.

The NCAA runs tournaments in all other sports and football would generate tremendous revenue for the institution.

Or so the arguments presented go.

Compared with the numbers prior to the BCS this is a significant improvement, and current rules are far more progressive than the first eight years of the BCS. 85% of the revenue for teams that participated in 94% of the available openings hardly sounds like the BCS has unfairly cut them out of the revenue.

University of Nebraska Chancellor Harvey Perlman, the chair of the BCS Presidential Oversight Committee, testified before congress that the BCS actually subsidies the smaller schools. With 15% of the revenue going to teams that participated in 6% of the available openings he may have a point.

The BCS represents $140 million dollars of a $2.3 billion dollar industry, or 6.1% of the total FBS football revenue. The at large conferences receive 6.1% of their combined revenue from the BCS to distribute as they desire. The BCS appears to be as fair as TV revenue and booster donations to the at large conferences.

These conferences choose to preferentially distribute a majority of the revenue to conferences selected to participate and these conferences have so far awarded the participating teams a lions share of the generated revenue. The result is that teams from at large conferences typically receive more BCS revenue (and nearly equal total bowl revenue) for their appearance than the national championship participants in the years selected.

If teams really want to make it to the big stage they need to grow their booster support to provide the capital needed to fund improvements to their infrastructure. With increases in booster support, TV viewership and revenue will grow and the BCS will follow the market forces.

They are too greedy not to.

I will close with this one unasked question I had from this past summers' senate hearing:

Is Lincoln Nebraska really that much better of a market to fund-raise and rally fans for a team than Salt Lake City Utah?

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makes sense to me but......

grabbing hands, grabbing hands, all for themselves after all. everything counts in large amounts. depeche mode.

i'm all about covering the spread and moneylines. i was building a house, i don't deserve this, deserves have nothing to do with it. bang. "unforgiven"

by wolfmanshowlforever on Jan 24, 2010 3:12 PM EST reply actions  

Great article

excellent points.

You play fast, you play strong, you go out there and dominate the guy you play against, and make his ass quit! That's our trademark, that's our MO as a team, aight, that's what people know us as! - Nick Saban, 2008

by BamaReturns07 on Jan 25, 2010 1:40 PM EST reply actions  

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