How Insiders Use the College Bowl System to Loot American Universities

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How Insiders Use the College Bowl System to Loot American Universities

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Started 4 months ago by the_linotypist
Latest reply from myliftkk

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the_linotypist
Olde North Columbus
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Article a Friend Sent Me--Required Reading for College Football Fans:

http://www.browardpalmbeach.com/2011-12-15/news/how-insiders-use-the-college-bowl-system-to-loot-american-universities/

Posted 4 months ago #
Twixlen
Westgate, Columbus
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Thanks for sharing this - that's a great article. I didn't realize that the bowl games were run as nonprofits - that's sort of a shocking piece of information.

Bowl executives defend themselves by claiming to run charities. That may be true in terms of their IRS status, but charity implies giving to someone other than yourself. In the world of college bowl games, that hasn't happened for more than 60 years.

Studies show that as far back as 1947, bowls were giving less than 1 percent of their receipts to the needy. Today, their benevolence ranges from just 1 to 3 percent.

By comparison, "most highly efficient charities will spend 75 percent or more," says Megan Davison of CharityWatch, a Chicago group that helps donors find the most effective charities. "A program that spends 60 percent will get a C grade from us."

........

The biggest scam is the bulk ticket purchases. So begins the seasonal hemorrhaging.

The deal starts with a presumption of failure. Even powerhouses like Ohio State rarely sell that many. When the Buckeyes played the Fiesta Bowl in 2009, they failed to sell more than 7,000 seats. Price for this bath: $1 million.

What year did tuition crank up?

Posted 4 months ago #
Coremodels
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What year did tuition crank up?

It was paid by Ohio State's athletics department, which runs at a profit because of the football team. So high a profit, in fact, that it also fully funds every other sport the university offers (more than most other schools) and contributes millions each year back to the academic side.

They also neglect to mention the BCS paid Ohio State 17.5 million dollars to play in the game.

That article is somewhat...well...bunk.

Posted 4 months ago #
Coremodels
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BTW, on the 7,000 unsold Ohio State tickets.

The Fiesta Bowl was played at the University of Phoenix Stadium with an attendance of 72,047. The year before, it hosted the Super Bowl with an attendance of 71,101.

I'm not sure I'm buying this whole 7,000 unused tickets thing.

Posted 4 months ago #
myliftkk
Columbus, OH
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Coremodels said:
It was paid by Ohio State's athletics department, which runs at a profit because of the football team. So high a profit, in fact, that it also fully funds every other sport the university offers (more than most other schools) and contributes millions each year back to the academic side.

They also neglect to mention the BCS paid Ohio State 17.5 million dollars to play in the game.

That article is somewhat...well...bunk.

Bunk why exactly? The article stipulates that 20 athletic departments are net positive earners for their schools. That's not at odds with the OSU's lack of ability to resell a forced bulk ticket purchase. The point the author was making was that even the most robust athletic departments couldn't move those bulk ticket purchases.

The current setup may be a boon to OSU, and a few select other schools. It doesn't look that way for the vast majority though unless you've got completely different numbers to counter the author's claims.

Posted 4 months ago #
Coremodels
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I'd say its bunk because it fails to mention two incredibly important aspects of the story:

1. A team can decline to attend. If Minnesota didn't want to play in the Insight Bowl they could have just said "no".

2. They fail to mention, at least in my fairly quick review, that teams are paid to be there...kind of important if you're going to talk about the profitability for the team.

Hell, 6-6 Minnesota got 1.2 million to play in that game they "lost" 700,000 on.

And yeah, again, I'm 100% questioning even their numbers based on the 2009 attendance of the Fiesta Bowl, Ohio State's proven ability to sell tickets nationwide, etc.

ETA: Also, since the Big Ten in particular takes in all the bowl revenue from its teams and splits it 100% equally among them, Minnesota benefits every year financially from the bowl system. Those same Gophers, at 3-9 this year, will be getting a chunk of the 22 million dollar Rose Bowl purse from Wisconsin,

Posted 4 months ago #
Coremodels
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Also, after doing a bit more research, it appears that Ohio State had to alter its policy as a result of poor sales of that particular Fiesta Bowl. The policy was to only sell to "insiders" (season ticket holders, students, faculty) and opened sales to the general public for any remainder instead.

That's a bit different than not being able to sell the tickets at all.

Posted 4 months ago #
GCrites80s
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Coremodels said:
BTW, on the 7,000 unsold Ohio State tickets.

The Fiesta Bowl was played at the University of Phoenix Stadium with an attendance of 72,047. The year before, it hosted the Super Bowl with an attendance of 71,101.

I'm not sure I'm buying this whole 7,000 unused tickets thing.

What may be going on is that they were "unsold" at face value by the schools, which then had to sell them to ticket brokers at a deep discount.

Posted 4 months ago #
Andrew Hall
Dennison Place (The Circles)
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Coremodels
I'm not sure I'm buying this whole 7,000 unused tickets thing.

Unsold by tOSU, but sold by the Fiesta Bowl.

This issue has been out for some time. A more detailed analysis from last year's bowls : http://www.thewizofodds.com/the_wiz_of_odds/2011/05/bowl-games-silly-extravagance-or-worthwhile-tradition.html

In short, money that should be going to (mostly) public universities who are providing the actual value is being skimmed by a sleazy bunch of pseudo-charities. .

A.

Posted 4 months ago #
Twixlen
Westgate, Columbus
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Andrew Hall said:
Unsold by tOSU, but sold by the Fiesta Bowl.

In short, money that should be going to (mostly) public universities who are providing the actual value is being skimmed by a sleazy bunch of pseudo-charities. .

A.

Exactly this. They, under the guise and federal boost of being a non-profit, are donating less than I'd guess the average household donates to charity/church in any given year. And the difference there is millions upon millions - not a few hundred or few thousand dollars.

Posted 4 months ago #
Cookie
Flyntonville
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Coremodels said:
It was paid by Ohio State's athletics department, which runs at a profit because of the football team. So high a profit, in fact, that it also fully funds every other sport the university offers (more than most other schools) and contributes millions each year back to the academic side.

Aren't those millions contributed to academics in the form of athletic scholarships?

Posted 4 months ago #
howatzer

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I read the article but must have missed the part about how the bowl organizers hold guns to the Universities heads to make them go to the bowl. If it's such a terrible deal financially, why participate? I'm sure Stanford could afford to say no to the Fiesta bowl folks if they felt like they were getting screwed.

I also find it hard to take the author as credible when the writing drips with sarcasm and hyperbole that reveals a deep and inherent disgust for college sports - it's very obvious we're getting one side of a (non)story.

Posted 4 months ago #
howatzer

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Cookie said:
Aren't those millions contributed to academics in the form of athletic scholarships?

that and, among other things, direct contributions for academic building construction and renovations.

I didn't go to a football school. I never had an understanding of the passion for football before coming to Columbus. Now that I'm here, I get the passion thing, but I what I don't get is the deep seated hatred of college football, by a small, vocal minority that wishes this 100+ year old institution would just go away. Especially when the program financially sustains itself, as well as the entire OSU athletic program, with money to spare.

Posted 4 months ago #
Coremodels
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In short, money that should be going to (mostly) public universities who are providing the actual value is being skimmed by a sleazy bunch of pseudo-charities. .

A.

On that part of the article I totally agree, and there's been a lot of BCS and bowl official scandals as a result. Painting the bowls as a losing proposition for the schools, however, is just bogus. Here's a breakdown of the bowls this year for the Big Ten:

Rose Bowl (Wisc): $17.5 million
Cap One Bowl (UNL): $4.6 million
Sugar Bowl (Michigan): $4.5 million
Outback Bowl (MSU): $3.5 million
Insight Bowl (Iowa): $3.35 million
Gator Bowl (OSU): $2.7 million
Meineke Bowl (NW): $1.7 million
Ticket City (PSU): $1.1 million
Little Caesar's Bowl (Purdue): $750,000
Kraft Fight Hunger (ILL): $837,500

Over 40 million, divided evenly by 12 teams (although not really, Nebraska gets kind of hosed as a new member). Based on AH's link "On average, a team spent $1.31 million on a bowl trip. Of that amount, $321,422 went to cover costs for absorbed tickets.", every school in the Big Ten roughly tripled their money if they went to a bowl game.

Again, I'm not going to disagree with the bogus charity aspect of the article, but the idea that teams are forced to go to a bowl game, forced to buy tickets they can't sell, and saddled with huge losses just doesn't seem to add up.

Posted 4 months ago #
Coremodels
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Cookie said:
Aren't those millions contributed to academics in the form of athletic scholarships?

http://www.cleveland.com/datacentral/index.ssf/2011/10/ohio_states_athletic_departmen.html

Pretty good breakdown of how special Ohio State is compared to most schools on this.

Posted 4 months ago #
hugh59
Aboard the ultimate power in Olde Towne East
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Twixlen said:
Thanks for sharing this - that's a great article. I didn't realize that the bowl games were run as nonprofits - that's sort of a shocking piece of information.

Bowl executives defend themselves by claiming to run charities. That may be true in terms of their IRS status, but charity implies giving to someone other than yourself. In the world of college bowl games, that hasn't happened for more than 60 years.

Studies show that as far back as 1947, bowls were giving less than 1 percent of their receipts to the needy. Today, their benevolence ranges from just 1 to 3 percent.

By comparison, "most highly efficient charities will spend 75 percent or more," says Megan Davison of CharityWatch, a Chicago group that helps donors find the most effective charities. "A program that spends 60 percent will get a C grade from us."

........

The biggest scam is the bulk ticket purchases. So begins the seasonal hemorrhaging.

The deal starts with a presumption of failure. Even powerhouses like Ohio State rarely sell that many. When the Buckeyes played the Fiesta Bowl in 2009, they failed to sell more than 7,000 seats. Price for this bath: $1 million.

What year did tuition crank up?

Yes, that quote caught my attention too. The bowl committees should have their tax exempt [501(c)] status revoked. I assume these organizations are "charitable organizations" which, as per Title 26 USC Section 501(c)(3), "no part of the net
earnings of which inures to the benefit of any private shareholder or individual." Of course, if they are some other kind of exempt organization under Section 501, that limitation may not be present in the statute (but there is still a general rule against personal enrichment).

UPDATE

I checked the website. The Insight Bowl is run by The Fiesta Bowl organization which describes itself as a 501(c)(3).

Posted 4 months ago #
Cookie
Flyntonville
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Coremodels said:
http://www.cleveland.com/datacentral/index.ssf/2011/10/ohio_states_athletic_departmen.html

Pretty good breakdown of how special Ohio State is compared to most schools on this.

I understand that, but outside of admittedly substantial contribution to the library renovation, let's be honest, the athletic department money is spent on the athletic department.

Posted 4 months ago #
Twixlen
Westgate, Columbus
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howatzer said:
I read the article but must have missed the part about how the bowl organizers hold guns to the Universities heads to make them go to the bowl. If it's such a terrible deal financially, why participate? I'm sure Stanford could afford to say no to the Fiesta bowl folks if they felt like they were getting screwed.

I also find it hard to take the author as credible when the writing drips with sarcasm and hyperbole that reveals a deep and inherent disgust for college sports - it's very obvious we're getting one side of a (non)story.

The problem is that there isn't any incentive for them to say no, since the money that is lost doesn't come out of their personal pockets. And they are actually incentivized to go, considering how it's possible for them to personally profit (even if it's just to have an expenses paid vacation). It's leaving the fox in charge of the hen house.

Posted 4 months ago #
myliftkk
Columbus, OH
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Regarding university's turning down bowl bids, who exactly is going to do that? The athletic department certainly wouldn't, and most university's don't cross the athletic department all that often seeing as how most aren't run by accountants (who probably would put a stop to this).

Most critics aren't anti-college football at all. I agree with the idea that a NCAA run playoff system would be vastly superior to the participation trophy bowls that litter the tv landscape for the next couple of days. Legimate hate for the bowl system goes back to high school when we'd stand around waiting for school to start in the morning and bitch about how terrible the ranking and bowl system were in college ball.

These bowl charities (and I didn't even realize they were setup that way), probably should be socked and fined by the IRS. They sound more akin to the George's Human Fund than any real charity. Maybe we could close our deficit by retroactively stripping their exempt status and collecting back taxes for all that years they should have been providing charity works.

Posted 4 months ago #