29.4.09

THE INCREMENTAL COST OF VISIBILITY. The Northern Star follows up its report on nepotism with an analysis of a $154K overdraft on the Independence Bowl. That's right, overdraft. You read it here first.
Late Friday afternoon email? Those faculty who are checking e-mail then are probably corresponding with co-authors, dealing with editors (as referee or as writer) or otherwise working on their research. That's a population not particularly likely to be impressed with a bowl opportunity (which is likely to cost the university money once the travel and entertainment expenses for senior administrators and boosters is figured in) as the outcome of a game on a school night.
I was right about the travel and entertainment expenses, as we will see. What I did not anticipate is the bonus-trading that goes on to get a conference an additional bid. For supposedly amateur sports, that have nothing to do with money, the potential for side payments is great.

The 2008-2009 college football postseason produced a record 34 bowl games. When the regular season came to an end 72 teams were left as bowl eligible. This meant four bowl eligible teams would not enter the postseason.

Of these 72 teams, 13 teams had a 6-6 record, the minimum record to reach the postseason. One of these 13 teams was NIU.

The Huskies had hoped to win their final game against Navy, as this would have given them a 7-5 record. A 7-5 record would have improved NIU’s chances at a bowl game, as the NCAA restructured the manner in which at-large bids are selected a few years ago. Bowl games are forced to take a team with a winning record for an at-large slot, before inviting a 6-6 team. This meant teams like Western Michigan, with a 9-3 record, had to be selected for an at-large bid before a 6-6 team like Notre Dame.

And it was Western Michigan that proved to be the crucial piece of the puzzle to get NIU into a bowl game.

The Broncos ultimately accepted an invitation to the Texas Bowl in Houston. At first, however, WMU wanted to accept an invitation to the Independence Bowl. The motivation, it seemed, was money.

“The net payout in Shreveport was $330,000. In Houston it was $270,000,” said MAC commissioner Rick Chryst. “Prior to any bowl invitations we wanted to take the money part off the table. I think we felt Shreveport was the best opportunity for Northern.”

NIU agreed with Chryst, feeling that if it was going to make it to the postseason, it would be in Shreveport.

“Rick [Chryst], and his staff, we relied on them to be really the kind of conference voice for us as the negotiations occurred,” said NIU Athletic Director Jeff Compher. “We feel like the more teams from our conference that go the better. We didn’t want to be the one sitting out, but we didn’t want anyone else sitting out.”

In order to convince WMU to accept the invitation to Houston, NIU agreed to give some of its revenue from the Independence Bowl to WMU. This amount was finalized at $29,380.

The university achieved some economies in lodging and transportation. (Heck, compared to Our President asking his cabinet to find one-ten-thousandth of his annual deficit in their budgets, our athletic department overachieves.) In part, the economies reflect demand for the tickets.
The athletic department originally estimated $13,109.25 for lodging for students at the game. This was reduced to $6,435.72, but only because the department originally expected to bring two busses of students to the game, yet was only able to fill one bus.
A trip to Shreveport, at Christmas. Wonder why. No private jet charters.

The Northern Star also discovers that the Athletic Department is more generous to friends of the program than Our President is to the Queen of England. (Maybe not. Boosters didn't get autographed copies of Bill Baker's -- the professor, not the announcer -- work on Wilkie Collins.)

When participating in the Poinsettia Bowl, NIU went over this limit [on the value of presents], as it gave players, coaches, donors and friends team gifts. In 2006 these gifts were an iPod Nano, an iPod Nano case, men’s/women’s watches, sweatshirt and ski cap. These gifts cost $12,000.

At the Independence Bowl, all members of the NIU football team received a Timely Watch Co. watch, New Era cap and Trek mountain bike.

Meanwhile, some colleagues and I went recruiting at the job meetings and nobody in authority has thanked us for making the effort in a search that was later suspended, let alone given us an I-pod. They did reimburse us for our rapid transit rides to the airport.

The interview elicits an infelicitous comment from athletic director Jeff Compher that concedes a positional arms race is in progress.

When examining a bowl game, Compher said the financial matters cannot illuminate the entire situation.

“You can’t explain it with the bottom line,” Compher said. “It’s an investment. If you want to compete at this level you have to be willing to invest.”

According to Compher, a bowl game helps add spirit to the campus, create the college experience, helps in recruiting future players and coaches, and adds to the student-athlete experience.

That means it ultimately pays off on the bottom line. The problem, however, is that the rent-seeking inherent in recruiting, enhancing the experience, competing at that level, and the likely strategic complementarity of Northern Illinois's new weight room with Ohio's implies the investments will never be cost-effective. The sponsors of bowl games, who do face hard budget constraints, are likely to recognize this before the athletic departments do.

[Deputy athletic director Glen] Krupica said the main change that needs to be made for the future is the athletic department needs to be more prepared from a marketing standpoint. In order to achieve this, however, he said NIU needs to know that it will be participating in the postseason earlier than it did this year.

“Hopefully we’re in a little bit better position that we’ll know we’re playing a bowl game,” Krupica said. “Our fans will then be conditioned to going to a game and to be able to float out there are some pre-sale opportunities where people can lock into tickets regardless where we go. And then in early November we lay out five options.”

Krupica and Compher see this as one of the key ways of selling more of the required allotted tickets when accepting an invitation to a bowl game. By achieving this, the pair hopes the university will no longer have to use a majority of the payout to purchase the allotted tickets.

We owe the overdraft to ourselves. Chortle.

“Maybe someday you’re not worried about defraying, but maximizing your payout,” Krupica said. “I think that’s when you start getting at the point bringing five, six, 7,000 people to a game.”

In order do to this, however, Compher said a mind set has to be created at NIU where fans expect the Huskies to go to a bowl game. This may only be the case, however, if NIU can produce better regular season records in the future. [Vice President of Finance and Facilities Eddie] Williams [USNR] said he believes there will be a reduction in bowl games in the future, as games are now struggling to find sponsors.

“I am concerned about bowls in general. There may be too many of them. There may not be enough sponsors,” Williams said. “When you are in that situation the payouts may be smaller for the non-large bowls.”

You think? Chick-fil-A's ability to finance a bowl depends on the willingness of people to buy sandwiches. (That ability apparently exceeded the ability of the peach cartel). Athletic departments can increase student fees. (It might be fun to require universities to disclose all the fees the same way a settlement statement for a real estate closing does. The difference is that those closing fees bear some relation to problems that arise in the course of a transaction. Many of our students treat the athletic fee as a sunk cost, a point that sports columnists for the Northern Star never seem to grasp when they exhort their classmates to attend the games they're paying for.)

No comments: