West Virginia University president endorses splintering of NCAA’s top level

January 24, 2014

Athletics, Business

Gordon Gee endorses splintering of NCAA’s top level

Brad Wolverton
The Chronicle of Higher Education

Less than a week after college-sports leaders agreed on a preliminary plan to give the wealthiest NCAA conferences more autonomy while keeping Division I intact, E. Gordon Gee threw his support behind a different idea, suggesting that the 60 or so most-powerful athletics departments should form their own group.

Mr. Gee, president of West Virginia University, who has spent his career entrenched in big-time sports, said in an interview with The Chronicle that he would back a plan to create a fourth NCAA division or “leave the NCAA altogether.” And he suggested that Mark Emmert, the association’s leader, whose work he has long admired, had lost his footing.

Mr. Gee wouldn’t say whether he favored a fourth division or a breakaway. But he said that leaving the NCAA would give the wealthiest institutions the chance to “really reinvent the whole nature of the governance structure.”

Neither of those ideas was on the table at last week’s NCAA convention, where leaders across Division I showed support for keeping all 350 or so colleges under the same umbrella. The group also endorsed a proposal that would let the wealthiest five leagues provide more financial benefits to athletes and make rules more favorable to their interests. (Mr. Gee was not in attendance.)

But there are big questions to resolve about autonomy, including how much more power the elite conferences would have, and when they would get to use it—differences that could lead to an eventual splintering.

Mr. Gee, who stepped down last year as president of Ohio State University after making comments that criticized Roman Catholics and Southeastern Conference institutions, has been a leader in efforts to improve higher education nationally. Most recently, he led the American Council on Education’s work on the National Commission on Higher Education Attainment, which sought to improve retention and attainment at thousands of institutions.

Through that work, he said, he saw the challenge of grouping very different types of colleges together.

“There’s so many varied interests,” he told The Chronicle. “It’s not that they shouldn’t be in competition, but frankly, when they’re all under the same tent, they pummel each other to death—whereas when you have some segregation with connectivity, you can have a much more powerful stringed organization.”

Mr. Gee, who worked with Mr. Emmert at the University of Colorado in the mid-1980s, considers the NCAA leader a close friend. Mr. Gee was one of more than 50 college chiefs to attend a 2011 NCAA summit at which Mr. Emmert attempted to gather support for an aggressive set of changes.

Among other things, Mr. Emmert helped push through a controversial $2,000 expense allowance for Division I players. That change was rolled back by institutions that don’t have budgets like those at Ohio State or West Virginia.

Mr. Emmert’s failure to appeal to powerful athletics officials may have made it more difficult to effect true change in an entrenched bureaucracy, Mr. Gee suggested. And the NCAA leader has not been well served by an exodus of talent from the association.

“He was a very brilliant guy initially in some of the things he tried to do,” Mr. Gee said. “But if you’re going to have a very aggressive change agenda, you’ve got to have foot soldiers who really agree with you.”

Last year, as Mr. Emmert faced criticism, Mr. Gee advised him to “stay the course.”

“It’s a very fragile time right now for college athletics,” Mr. Gee said at the time. “Mark is reaping the reward of being very aggressive, and also the whirlwind of being very aggressive.”

On Thursday his words were more measured: “My view is that consultation and listening right now is very, very important.”

That certainly seems to be Mr. Emmert’s approach. At last week’s convention, he mostly sat quietly while a group of presidents led discussions about the pros and cons of change.

He made the same impression last fall, during meetings of the Division I Board of Directors and a presidential-advisory group, says one campus leader who attended.

“He was obviously trying to lay low and let the whole process play out,” said this person. “He came in heavy and recognizes the need to pull back.”

In an email, an NCAA spokesman said that conversations at last week’s convention underscored its member colleges’ desire to keep Division I together. And the NCAA’s executive committee, which oversees Mr. Emmert’s performance, continues to support his work.
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NCAA Players Pay

NCAA had record $71 million surplus in fiscal 2012

Steve Berkowitz
USA Today

May 2, 2013

The NCAA recorded a nearly $71 million surplus for its 2012 fiscal year, according to an audited financial statement the association released in 2013.

The surplus, an all-time best for the organization, increased its year-end net assets to more than $566 million, roughly double where they stood at the conclusion of the 2006 fiscal year.

Among the NCAA’s $530 million in unrestricted assets was an endowment fund that had grown to more than $282 million as of the end of its 2012 fiscal year, Aug. 31. That’s more than double what the fund was worth six years earlier.

The new financial statement — dated Nov. 29, 2012 – also includes a item that reiterates the NCAA’s oft-expressed confidence in its ability to prevail in an anti-trust lawsuit concerning the use of football and men’s basketball players’ names, images and likenesses.

The NCAA had nearly $872 million in total revenue in fiscal 2012, according to the financial statement, and nearly $801 million in total expenses. In 2011, it had nearly $846 million in revenue and $778 million in expenses.

Of the 2012 revenue, nearly $709 million came from television and marketing rights fees and nearly $102 million from NCAA championships and National Invitation Tournament events.

The 2012 expenses include:

Nearly $504 million that was distributed to Division I member schools and conferences, up from $480 million in 2011.
More than $115 million on association-wide programs, down from more than $128 million in 2011. Association-wide program expenses include those for NCAA governance committees, the statement says.
More than $38.3 million in management and general spending, up from $35.7 million in 2011. On a percentage basis, that means management and general spending grew by 7.3% while the distribution to Division I increased by 5%.

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College Football’s Most Valuable Teams 2013

Forbes

1. University of Texas -Longhorns
Team value: $139 million
Revenue: $109 million
Profit: $82 million
Conference: Big 12

The Longhorns generated $34.5 million from ticket sales alone last year. The majority of the remaining revenue came from contributions ($30 million), royalties and sponsorships ($26 million) and distributions from the NCAA and Big 12 ($15 million). This is the second straight year that Texas has broken $100 million in football revenue; no other team in college football history has ever crossed the $100 million mark.

2. University of Notre Dame- Fighting Irish
Team value: $117 million
Revenue: $78 million
Profit: $46 million
Conference: Independent

Last year’s undefeated trip the BCS National Championship netted Notre Dame a direct BCS payout of more than $6 million. The Irish also hosted a seventh home game last year, up from six in 2011.

3. University of Alabama- Crimson Tide
Team value: $110 million
Revenue: $89 million
Profit: $47 million
Conference: SEC

Winning three of the last four BCS title games has paid off in a big way, pushing Alabama’s value up 20% since 2009. Even while leading all of college football in spending last year, the 2012 season was particularly profitable for the Tide thanks to increased ticket sales and a one-time $4.7 million payment for opening the season against No. 8 Michigan.

4. Louisiana State University- Tigers
Team value: $105 million
Revenue: $74 million
Profit: $48 million
Conference: SEC

The Tigers are no longer the SEC’s most valuable program, thanks in part to the team failing to make a BCS bowl since the 2011 title game, but LSU’s value is still strong thanks to a massive fan base. Almost half of the fans at every home game travel to Tiger Stadium from outside Baton Rouge, and those visitors inject nearly $10 million into the local economy each home weekend.

5. University of Michigan- Wolverines
Team value: $104 million
Revenue: $81 million
Profit: $58 million
Conference: Big Ten

Michigan’s value is down 13% from last year, the direct result of playing two fewer home games than in the previous season. The Wolverines also played two of their biggest rivalry games, against Notre Dame and Ohio State, away from home last year. Michigan spends more on football scholarships than any other public school on our list.

6. University of Florida- Gators
Team value: $94 million
Revenue: $75 million
Profit: $49 million
Conference: SEC

Only Notre Dame contributes more athletic money back to academic programming than Florida. Last year, the Gators athletic department gave $7.2 million back to the university, a gift that included $1.5 million earmarked for non-athletic scholarships. Despite going 4-8 this season, the team’s first losing record in more than 30 years, head coach Will Muschamp will keep his job in 2014; had he been fired, the school would have owed him $8 million.

7. University of Oklahoma- Sooners
Team value: $92 million
Revenue: $70 million
Profit: $45 million
Conference: Big 12

Oklahoma’s football revenue was up $10 million, or nearly 17%, over the previous season, thanks mostly to increases in ticket revenue and conference distributions. Since Bob Stoops took over in 1999, the Sooners have played in nine BCS bowls and have won at least 10 games in all but three seasons.

8. University of Georgia- Bulldogs
Team value: $91 million
Revenue: $66 million
Profit: $40 million
Conference: SEC

Last year the Bulldogs collected $22.5 million from ticket sales and another $28 million from contributions, highlighting how important a loyal alumni base can be to a team’s financial success. The athletic department contributed $4 million back to academic programming.

9. Ohio State University- Buckeyes
Team value: $83 million
Revenue: $61 million
Profit: $38 million
Conference: Big Ten

The Buckeyes soared up the list this year, with value increased 30% from last year, thanks to hosting eight home games, including the rivalry game against Michigan. A change in the school’s accounting practices also lowered team expenses last year. Ohio State’s athletic department contributed $5 million back to academic programming last year.

10. University of Nebraska- Cornhuskers
Team value: $80 million
Revenue: $56 million
Profit: $35 million
Conference: Big Ten

Nebraska joined the Big Ten from the Big 12 in 2011 but, because of the conference’s expansion rules, the school won’t receive a full conference distribution until 2017. That conference money, which consists of revenue from bowl games, TV deals and other sources, will reportedly be worth $26.4 million per full member school after 2013-14, and as much as $35 million in 2016-17.

11. Auburn University- Tigers
Team value: $77 million
Revenue: $75 million
Profit: $39 million
Conference: SEC

Only Alabama spent more than Auburn last year, but while the Crimson Tide went to the BCS title game, Auburn won only three games. Things turned around this season, with Auburn shocking Alabama in the Iron Bowl and making a run to the BCS National Championship, where it will face No. 1 Florida State. Last year, Auburn’s athletic department contributed $1.5 million to constructing a new, $10 million practice facility for the school’s marching band.

12. University of Arkansas- Razorbacks
Team value: $74 million
Revenue: $61 million
Profit: $32 million
Conference: SEC

Team profit is down some $8 million from 2011-12 thanks to the Razorbacks failing to make a bowl game last year while also bringing aboard a new coaching staff. Just to get Bielema released from his contract with Wisconsin, where he led the Badgers to three consecutive Rose Bowls, Arkansas had to pay $1 million.

13. University of Southern California- Trojans
Team value: $73 million
Revenue: $58 million
Profit: $35 million
Conference: Pac-12

USC, as a private school, spends more than $5 million per season on football scholarships, which is more than any other team on our list not named Notre Dame. The Trojans’ value is up 7% over last year, a nice rebound from a dip caused by NCAA sanctions that included a loss of scholarships and a two-year bowl ban.

14. Texas A&M University- Aggies
Team value: $72 million
Revenue: $54 million
Profit: $36 million
Conference: SEC

The Aggies are the one new team to the list this year. Though the school has claimed Johnny Manziel’s Heisman-winning season only netted the school about $20,000, the football team’s revenue increased by $9.4 million, or more than 20% over the previous season. That increase may not be entirely due to Manziel – Texas A&M also moved to the SEC and played in the Cotton Bowl – but the freshman quarterback’s historic season certainly couldn’t have hurt.

15. Pennsylvania State University- Nittany Lions
Team value: $71 million
Revenue: $59 million
Profit: $30 million
Conference: Big Ten

Penn State was once a lock for a top-three spot on this list, but the Jerry Sandusky child abuse scandal has taken a toll on the team’s finances. Team revenue fell $7.5 million last year due to a loss of Big Ten bowl money, a decrease in contributions and diminished gameday sales of tickets and concessions. In October, the school said it agreed to pay $60 million to 26 victims in the child sex abuse scandal.

16. University of Wisconsin- Badgers
Team value: $70 million
Revenue: $51 million
Profit: $19 million
Conference: Big Ten

Expenses went up for the Badgers last year due to the team hiring a new coaching staff while also spending big on renovations to Camp Randall, which include a new scoreboard, weight room and academic center. Despite only going 7-5 in the regular season, bowl bans to Penn State and Ohio State let the Badgers play in the Big Ten Championship, where they blew out Nebraska and claimed a third straight trip to the Rose Bowl.

17. University of Washington- Huskies
Team value: $66 million
Revenue: $56 million
Profit: $33 million
Conference: Pac-12

Team profit was up $5 million despite playing one fewer home game last season. The Huskies accomplished that feat by receiving additional contributions and TV revenue, while more than $1 million in severance payments came off the books.

18. University of South Carolina- Gamecocks
Team value: $65 million
Revenue: $49 million
Profit: $24 million
Conference: SEC

Gamecocks athletics contribued over $2.2 million to non-athletic scholarships last year. A trip to the Outback Bowl last year also netted the SEC a $3.5 million payout, one of the biggest for a non-BCS bowl.

19. University of Oregon- Ducks
Team value: $64 million
Revenue: $54 million
Profit: $33 million
Conference: Pac-12

Despite hosting one fewer home game than the previous season, the Ducks’ revenue was up $2 million thanks in large part to increased ticket prices. A recent economic impact report suggests that out-of-county visitors spend over $4.5 million per Oregon home game.

20. University of Tennessee- Volunteers
Team value: $63 million
Revenue: $55 million
Profit: $28 million
Conference: SEC

The Volunteers suffered the biggest drop on our list, down 25% from a value of $63 million last year. The dip in value has a lot to do with the team buying out former head coach Derek Dooley and his staff, which could cost more than $9 million over four years. The athletic department has also greatly restricted its academic contributions while it stabilizes its finances. Tennessee’s athletic department, formerly one of the biggest funders of academic programming with annual contributions over $6 million, gave just $1.3 million back to its university last year.

Sources: the BCS, US Department of Education, university athletic departments and various economic impact reports.

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Video: Dr. E. Gordon Gee
After more than three decades as a college president at 5 institutions, E. Gordon Gee has become one of the most recognizable names in higher education.
In 1981, he became president of West Virginia University, at 37, making him the youngest university president in the country at the time. He previously served as Dean of WVU’s Law School.
After 4 years as president of WVU, Dr. Gee was hired as president of the University of Colorado. Stints at Brown University, Vanderbilt University and Ohio State University (twice) followed. Along the way Gee gained a national reputation as a dynamic leader and a relentless fundraiser. He is credited with raising $1.6 billion for Ohio State.

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Video: Panel on the O’Bannon v. NCAA Case and the Future of College Athletics
On November 5, 2013, University of New Hampshire Law’s Sports and Entertainment Law Institute and Sports Illustrated co-hosted a Town Hall on Ed O’Bannon’s class action lawsuit against the NCAA and the Future of College Athletics. The Town Hall examined how a class action lawsuit against the NCAA could radically change college sports as we know it. Through legal arguments sounding in intellectual property and antitrust, O’Bannon—a former basketball star at UCLA—contends that current and former Division I men’s basketball and football players should be paid for their image and likeness on television broadcasts, video games, trading cards, apparel and other commercial ventures.

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