Sportsgeekonomics

Musings on Sports Economics

Title IX in its own words

I get asked about Title IX a lot, and I also see people making claims that I think are false.  I also wrote about Title IX in my recent Slate piece, where I made clear that I’m not a lawyer or an expert on Title IX and that much of what I write about is not the law itself, but the empirical data as to how the world where Title IX holds sway actually works.

In this post, I thought it would be helpful to list the key legal points from the Department of Education (DoE) re: Title IX that I use as a framework when thinking about the economics of Title IX.  These aren’t my opinions — these are more-or-less verbatim statements by the DoE or a Federal Court.  I’ve sourced each one to the DoE policy letter or court case that is the basis for my assertions of how the law has been interpreted in the past.

Title IX (as applied to college sports) is primarily about equality of opportunity for athletic participation. 

The Title IX regulation provides that if an institution sponsors an athletic program it must provide equal athletic opportunities for members of both sexes. Among other factors, the regulation requires that an institution must effectively accommodate the athletic interests and abilities of students of both sexes to the extent necessary to provide equal athletic opportunity.

The DOE has made a three-prong test to determine whether a school is compliant.  The first prong is the simplest — is the male/female (M/F) ratio of the athletic department “substantially proportionate” to the M/F ratio of the undergraduate population? (as show below, the DoE interprets “substantially proportionate” to be within one percentage point of a comparison ratio).

Alternatively, two other prongs exist to show compliance.  One is that all of the demand for sports of the under-represented gender have been met.  This usually requires a survey to show that basically there is no member of the under-represented gender (typically a woman) on campus who wants to play intercollegiate sports but is not able to find a space.  And the other is a  “progress” standard, which basically seems to amount to a requirement that the number of women participating has been increasing (at least increasing monotonically, i.e., either flat or up) each year.

Anyway to see the original source material on the three-prong standard, head to http://www2.ed.gov/about/offices/list/ocr/docs/clarific.html#two which states:

The 1979 Policy Interpretation provides that as part of this determination OCR will apply the following three-part test to assess whether an institution is providing nondiscriminatory participation opportunities for individuals of both sexes:

  1. Whether intercollegiate level participation opportunities for male and female students are provided in numbers substantially proportionate to their respective enrollments; or
  2. Where the members of one sex have been and are underrepresented among intercollegiate athletes, whether the institution can show a history and continuing practice of program expansion which is demonstrably responsive to the developing interests and abilities of the members of that sex; or
  3. Where the members of one sex are underrepresented among intercollegiate athletes, and the institution cannot show a history and continuing practice of program expansion, as described above, whether it can be demonstrated that the interests and abilities of the members of that sex have been fully and effectively accommodated by the present program.

44 Fed. Reg. at 71418.

Thus, the three-part test furnishes an institution with three individual avenues to choose from when determining how it will provide individuals of each sex with nondiscriminatory opportunities to participate in intercollegiate athletics. If an institution has met any part of the three-part test, OCR will determine that the institution is meeting this requirement.

To relate this to my own summary above, (1) is the idea that participation must be proportional to the undergraduate population.  DoE expanded on this, saying:

Part One: Are Participation Opportunities Substantially Proportionate to Enrollment?

Under part one of the three-part test (part one), where an institution provides intercollegiate level athletic participation opportunities for male and female students in numbers substantially proportionate to their respective full-time undergraduate enrollments, OCR will find that the institution is providing nondiscriminatory participation opportunities for individuals of both sexes.

But the DoE makes it clear that proportionality of participation is just one way to comply with the laws requirement of nondiscriminatory participation opportunities:

institutions need to comply only with any one part of the three-part test in order to provide nondiscriminatory participation opportunities for individuals of both sexes. The first part of the test—substantial proportionality—focuses on the participation rates of men and women at an institution and affords an institution a “safe harbor” for establishing that it provides nondiscriminatory participation opportunities. An institution that does not provide substantially proportional participation opportunities for men and women may comply with Title IX by satisfying either part two or part three of the test.

(2) is the idea that opportunities have been generally expanding rather than contracting.  Per DoE:

OCR will review the entire history of the athletic program, focusing on the participation opportunities provided for the underrepresented sex. First, OCR will assess whether past actions of the institution have expanded participation opportunities for the underrepresented sex in a manner that was demonstrably responsive to their developing interests and abilities…. There are no fixed intervals of time within which an institution must have added participation opportunities. Neither is a particular number of sports dispositive. Rather, the focus is on whether the program expansion was responsive to developing interests and abilities of the underrepresented sex. In addition, the institution must demonstrate a continuing (i.e., present) practice of program expansion as warranted by developing interests and abilities.

(3) is the idea of meeting all demand.  According to DoE:

Under part three of the three-part test (part three) OCR determines whether an institution is fully and effectively accommodating the interests and abilities of its students who are members of the underrepresented sex — including students who are admitted to the institution though not yet enrolled. … OCR will determine whether there is sufficient unmet interest among the institution’s students who are members of the underrepresented sex to sustain an intercollegiate team. OCR will look for interest by the underrepresented sex as expressed through the following indicators, among others:

  • requests by students and admitted students that a particular sport be added;
  • requests that an existing club sport be elevated to intercollegiate team status;
  • participation in particular club or intramural sports;
  • interviews with students, admitted students, coaches, administrators and others regarding interest in particular sports;
  • results of questionnaires of students and admitted students regarding interests in particular sports; and
  • participation in particular in interscholastic sports by admitted students.

… An institution may evaluate its athletic program to assess the athletic interest of its students of the underrepresented sex using nondiscriminatory methods of its choosing. Accordingly, institutions have flexibility in choosing a nondiscriminatory method of determining athletic interests and abilities provided they meet certain requirements. See 44 Fed. Reg. at 71417. These assessments may use straightforward and inexpensive techniques, such as a student questionnaire or an open forum, to identify students’ interests and abilities. Thus, while OCR expects that an institution’s assessment should reach a wide audience of students and should be open-ended regarding the sports students can express interest in, OCR does not require elaborate scientific validation of assessments.

So that is how the DoE tests whether a school is providing equality of opportunity with respect to athletic participation.  Then, separately, there is a question of proportionate funding.  This is not part of the three-part test; rather it takes participation levels as a given (regardless of which prong was used to pass the equality of participation opportunity test) and then asks whether scholarship aid is being provided proportionally to those levels of participation. 

In 1998 Bowling Green State University (of Ohio) asked for clarification as to how the financial piece works.  The DoE responded that  regardless of how you manage to comply with the participation rules, whether by proportionality, progress, or meeting all demand from the underrepresented gender, you also have to ensure that your “scholarship aid” is “substantially proportionate” to your participation.   The specific DoE language was put into a letter available at http://www2.ed.gov/about/offices/list/ocr/docs/bowlgrn.html:

This is in response to your letter requesting guidance in meeting the requirements of Title IX, specifically as it relates to the equitable apportionment of athletic financial aid.,

The Policy Interpretation does not require colleges to grant the same number of scholarships to men and women, nor does it require that individual scholarships be of equal value. What it does require is that, at a particular college or university, “the total amount of scholarship aid made available to men and women must be substantially proportionate to their [overall] participation rates” at that institution. Id. at 71415. It is important to note that the Policy Interpretation only applies to teams that regularly compete in varsity competition. Id. at 71413 and n. 1.

Note also two items I often mention.  Title IX “does not require colleges to grant the same number of scholarships to men and women, nor does it require that individual scholarships be of equal value."  People make this mistake all the time.  But it doesn’t take a law degree to read the DoE’s own policy language and see that the claim that every man and every woman must receive a scholarship of equal value is simply not true.  (As I always mention to people, the moment you realize that all football players are on a “full scholarship” and most women athletes are on a “partial scholarship,” you know that isn’t a requirement)

When the DoE says “substantially proportionate” they mean a ratio within 1 percentage point of the other ratio:

In order to ensure equity for athletes of both sexes, the test for determining whether the two scholarship budgets are “substantially proportionate” to the respective participation rates of athletes of each sex necessarily has a high threshold. The Policy Interpretation does not, however, require colleges to achieve exact proportionality down to the last dollar. The “substantially proportionate” test permits a small variance from exact proportionality. OCR recognizes that, in practice, some leeway is necessary to avoid requiring colleges to unreasonably fine-tune their scholarship budgets.

When evaluating each scholarship program on a case-by-case basis, OCR’s first step will be to adjust any disparity to take into account all the legitimate nondiscriminatory reasons provided by the college, such as the extra costs for out-of-state tuition discussed earlier. If any unexplained disparity in the scholarship budget for athletes of either gender is 1% or less for the entire budget for athletic scholarships, there will be a strong presumption that such a disparity is reasonable and based on legitimate and nondiscriminatory factors. Conversely, there will be a strong presumption that an unexplained disparity of more than 1% is in violation of the “substantially proportionate” requirement.

The other item embedded in this interpretation is that the policy of financial proportionality talks specifically about “scholarships” and “scholarship aid.”  Because the issue has never been addressed, there is no specific language (at least that I am aware of — if you know if, by all means, let me know!!) that says anything about payments to athletes outside of “scholarship aid.”  So, for example, if athletes were hired as employees and paid a salary, I do not believe Title IX would necessarily require financial proportionality there.  Indeed, when Marianne Stanley sued USC because her salary as the women’s basketball coach was lower than the salary of her men’s basketball coaching counterpart, George Raveling, a Federal Court said that as long as the duties of a male coach differ from those of a female coach, unequal pay is ok.  Included in this logic was the idea that different levels of revenue-generation can create different pay scales:

We agree with the district court in Jacobs that revenue generation is an important factor that may be considered in justifying greater pay. We are also of the view that the relative amount of revenue generated should be considered in determining whether responsibilities and working conditions are substantially equal. The fact that the men’s basketball team at USC generates 90 times the revenue than that produced by the women’s team adequately demonstrates that Coach Raveling was under greater pressure to win and to promote his team than Coach Stanley was subject to as head coach of the women’s team….

In the instant matter, the uncontradicted evidence shows that Coach Raveling’s responsibilities, as head coach of the men’s basketball team, differed substantially from the duties imposed upon Coach Stanley.

Coach Stanley contends that the failure to allocate funds in the promotion of women’s basketball team demonstrated gender discrimination. She appears to argue that USC’s failure to pay her a salary equal to that of Coach Raveling was the result of USC’s “failure to market and promote the women’s basketball team.” The only evidence Coach Stanley presented in support of this argument is that USC failed to provide the women’s team with a poster containing the schedule of games, but had done so for the men’s team. This single bit of evidence does not demonstrate that Coach Stanley was denied equal pay for equal work. Instead, it demonstrates, at best, a business decision to allocate USC resources to the team that generates the most revenue.3

Other DoE policy statements also focus specifically on “Financial Assistance” and specifically say this only applies “To the extent that a college or university provided athletic scholarships.”  

FINANCIAL ASSISTANCE

To the extent that a college or university provided athletic scholarships, it is required to provide reasonable opportunities for such awards to members of each sex in proportion to the participation rate of each sex in intercollegiate athletics. This does not require the same number of scholarships for men and women or individual scholarships of equal value.

However, the total amount of assistance awarded to men and women must be substantially proportionate to their participation rates in athletic programs. In other words, if 60 percent of an institution’s intercollegiate athletes are male, the total amount of aid going to male athletes should be approximately 60 percent of the financial aid dollars the institution awards.

Similarly, there is no language discussing the payment of royalties, such as for (say) the use of players’ photographs on trading cards.  This doesn’t mean Title IX could be interpreted to mandate equality of royalties (or as two Title IX experts have suggested, perhaps equality of royalty RATES), but it also means that there might be no Title IX implications at all.  It is, as they say, an open question.

In any event, to summarize,

  • Title IX offers three ways to comply with respect to participation,
    • Substantial proportionality with the male/female ration on campus;
    • Continued progress in offering opportunities to women;
    • Meeting the demand for opportunities of all interested women on campus.
  • Title IX does not require that individual men’s and women’s scholarships be equal.
  • Title IX does not require equal overall funding to men and women’s sports.
  • Title IX does require that scholarships/financial aid be substantially proportional to participation.
  • Title IX is silent with respect to issues of athlete royalty.
  • Title IX has been ruled not to require equality of pay, esp. when the payment involves different duties or “a business decision to allocate… resources to the team that generates the most revenue.”

So, on the internet, people sometimes say “Correct me if I’m wrong,” but they don’t really mean it.  But I really do.  If you know a lot about Title IX, and you can point to legal precedent or DoE policy statements or even the policy as implemented by specific schools to contradict or improve any of this, please correct me if I am wrong.  I really, really would welcome it.  If I am wrong on any of this, help me fix it.  With that said, as I am pointing to specific and fairly clearly DoE policy statements and legal precedents, I don’t think I am wrong.  But I truly welcome help in refining and improving my understanding, and I will welcome it even more if it can point me to the specific source language on which your interpretation is based.  If there is a court decision or DoE policy letter to back up your view, get in touch and I will make an update to this post and give you public thanks and credit.

Update:

Welch Suggs, Professor of Journalism at University of Georgia, and expert on college sports issues, pointed out (down in the comments) that while I’ve addressed the participation and financial aid portions of Title IX as it related to college sports, I did not address what he calls the “catchall of ‘treatment.’”

In Professor Suggs’ words:

Treatment covers a wide variety of topics, but the reg basically states (I’m too lazy to look up the exact language) that male and female teams must be treated equitably. This is measured on what’s called the “laundry list” of issues, including access to facilities, practice times, uniforms and equipment, coaching (including coaching salaries), access to tutors, etc.

Prof. Suggs is right, and this is the so-called laundry list from the Title IX regulations:

(2) Provision and maintenance of equipment and supplies;

(3) Scheduling of games and practice times;

(4) Travel and per diem expenses;

(5) Opportunity to receive coaching and academic tutoring;

(6) Assignment and compensation of coaches and tutors;

(7) Provision of locker rooms, practice and competitive facilities;

(8) Provision of medical and training services and facilities;

(9) Provision of housing and dining services and facilities; and

(10) Publicity

(I don’t know why, but point (1) is blank in the original)

Now, those of you out there who have seen the waterfall locker room at Alabama, or know that in 2009-10, men’s sports coaches at Alabama earned an average of $1.1 million while the average salary for coaches of women’s sports was a bit less, $153,181, might wonder exactly how the actual practice in the world matches these regulations.  Or, for example how “publicity” is the same between the Kentucky men’s basketball and women’s basketball teams.  But  Welch is correct to point out these regulations exist and may be important to any future analysis.

Prof. Suggs then added:

Participation has always been the major issue in Title IX complaints and litigation at the college level, although there have been cases brought that involved treatment issues (the LSU case comes to mind). Treatment, however, has been a major issue in high school cases. A number of complaints have been brought over disparities between baseball and softball fields, for example.

If you need a resource on Title IX, at the risk of tooting my own horn I’d suggest my book A Place on the Team: The Triumph and Tragedy of Title IX. It came out in 2005, but there haven’t been many changes in Title IX policy and practice since then.

I just ordered Welch’s book from amazon (http://www.amazon.com/Place-Team-Triumph-Princeton-paperbacks/dp/0691128855/ref=sr_1_1_bnp_2_pap?ie=UTF8&qid=1389500626&sr=8-1&keywords=A+Place+on+the+Team%3A+The+Triumph+and+Tragedy+of+Title+IX  ) and  I plan to read it next week!

Posted by
Andy Schwarz

Because I can’t help myself, 4 years worth of BCS attendance figures

image

I saw a discussion among Stewart Mandel, Andy Staples, and Dan Wetzel about BCS attendance being up 3%.  Mandel clarified that it was calculated as year-over-year growth, except for the National Championship game (which moves around among stadiums of different capacity), where they compared 2014 to 2010, to get a Rose Bowl-to-Rose Bowl comparison.

Anyway, I was curious what it would look like w/o the national championship, so I grabbed data from here http://www.bcsfootball.org/news/story?id=4809856 and then looked up the 2014 games attendance individually.

The answer?  A fairer press release would have said “Rebound from last year’s poorly attended Sugar Bowl more than compensated for large drop in Fiesta Bowl attendance, with the rest of the games more or less even.”

The main reason 2014 is up so much is that the 2013 Sugar Bowl was pretty bad.  Sugar Bowl attendance in 2014 was up 30.1% because the 2013 game between Louisville and Florida drew only 54,178 to the Superdome.  The Fiesta Bowl was down 7.2%.  The Rose Bowl was up 1.9% and the Orange Bowl was basically unchanged (7 more people, 72,080 rather than 72,073).  The National Championship was up as well, 17.6%, but as mentioned above that’s a trick of the venue.  Compared against 2010, the current championship was slightly down by 0.7%.

So it wasn’t false when they said the aggregate was up.  But, just to be clear, if you take out the Sugar Bowl from the total, this is the historical trend:

image

In other words, given that the National Championship itself was slightly down, the real answer is that the Sugar Bowl was so poorly attended in 2013, it’s rebound back to normal made up for the poor attendance at the Fiesta Bowl.  The rest is pretty much just noise, a slightly more popular Rose Bowl, slightly less popular National Championship and an even Orange Bowl. 

Posted by
Andy Schwarz

Price vs. Cost as a measure of Value

So you drive into a town, looking for a hotel room.  You see, I don’t know, maybe 350 hotels in this town.  Each one offers you a room (and board, and some educational opportunities as well, maybe a book on tape) for the same price — $10,000 a night.  Whoa, you say, that seems pretty steep!  Well, says each of the hotel owners, we’ve gotten together to set a common price to make sure you don’t make your selection based on money issues, but rather on which hotel and which book-on-tape best fit your accomodation-and-education needs.

Oh, and by the way, at $10,000, staying in our hotel is a great value.  after all, if you were to try to build yourself a little house for the night, the cost of construction workers, materials, building permits, etc., would cost way more than $10,000.  That’s how you should value the room.

Then a guy in a furry alpine cap he inherited from his grandfather steps in and says, actually, these hotels compete for other guests all the time and they charge between $99 and $199 per night.  A better measure of the value of a good or service is the market price b/w willing buyers and willing sellers, in the absence of collusion, not the cost of a non-participant in the market of replicating the services in an inefficient way. 

The guy in the alpine hat then he adds that if price were equal to the cost of self-assembly, then rides in airplanes would be extraordinarily expensive, cars would costs far more then they do now, when you include what it would cost to hire a skilled craftsman to make a one-shot engine, etc.  That indeed, the theory that value is measured by the cost of self-provision is more or less anathema to modern economics.

But the hotels keep the price up. They point to Forbes magazine, where an economist  who doesn’t have a problem with the self-manufacture theory of value writes: http://www.forbes.com/sites/jeffreydorfman/2013/08/29/pay-college-athletes-theyre-already-paid-up-to-125000year/

Which do you think is the right way to measure value?

Posted by
Andy Schwarz

Think of a partial scholarship as a coupon

In 2011, I analyzed the decision on Nebraska-Omaha to cut wrestling  and decided that one huge flaw in the accounting of schools for minor sports is that they missed the fact that partial scholarships are more like coupons than actual expenses, at least at school that are trying to grow their enrollment:

However, in addition to determining the true costs, it is also critical to determine whether there are any revenues left off of the athletic department’s books that stem from the granting of a GIA.  At some level, this would seem impossible – how could giving a scholarship result in revenues, above and beyond the sports-related revenues already recognized on the athletic departments P&L?[9]  But the critical thing to remember is that the UNO, like most schools, grants most of their scholarships (across all sports) in the form of partial GIAs.  UNO differs from major programs in that it uses partial scholarships for football as well as the Olympic sports, such as wrestling, where the practice is fairly universal.

As any product manager will tell you, if giving a discount can increase total purchases, what looks like an expense (e.g., a 10%-off coupon) is really revenue (the 90% of the price that the consumer paid, but would have spent elsewhere without the coupon).  But nothing in the NCAA accounting on which the UNO relies credits the athletic department for any of that revenue.  Thus it is critical to properly calculate not just out-of-pocket costs, but also any inflows of cash directly related to the granting of GIAs to football players and wrestlers.

(full article here: http://sportsgeekonomics.tumblr.com/post/45761374835/making-riches-look-like-rags)

(See also this Paula Lavigne ESPN piece: http://sports.espn.go.com/espn/otl/news/story?id=6488960)

Anyway, I’ve made this same case when I talk to people about why I think the recent decision by Temple to cut some sports may be more about, say, real-estate usage (e.g., boat house on prime riverfront location) than actual reduction of expenses.  And now, I see the coach of the men’s gymnastics teams is making the coupon argument too.  It’s always interesting to see the people affected by bad accounting try to convince the rest of the world that the economics and the accounting are telling different stories:

Turoff has four scholarships at his disposal to apportion among the 19 gymnasts on the men’s team. He slices off a half-scholarship here and a quarter-scholarship there, but that leaves the equivalent of 15 full-tuition students who are at Temple solely because of the gymnastics team. That tuition by itself offsets the approximately $300,000 annual budget of men’s gymnastics, which is about what the football team spends on chin straps every year. Turoff also does his own fund-raising to meet a required annual goal of $29,000. For the 2012-13 year, he raised $59,000.

Posted by
Andy Schwarz

Dan Wetzel on the Principal/Agent problem underlying the BCS

http://sports.yahoo.com/news/chuck-the-bcs-175022477.html

Wetzel (and co-authors Josh Peter & Jeff Passan) were most insightful when they asked the WHY question — why does something so unpopular persist.  The answer they gave was bascially what economists call a Principal/Agent problem, namely that the people who had been delegated decision making were acting in their own private interest rather than in the interest of their employers:

The truth we tried to elucidate was a story as American as it comes: Men in power refusing to give up what they believed was theirs because they told themselves that lie so many times it became their truth.

A survivalist through and through, Junker threw an opulent multiday party every year in Scottsdale – The Fiesta Frolic – for all the important decision-makers in college sports, picking up travel costs, meals, drinks, golf, everything. ADs and commissioners came with hands out, bellies ready to be filled and swings grooved.

And so the BCS stayed as the ice slowly melted in single malts on the veranda.

Junker was just one of many. The Orange Bowl doled out free Caribbean cruises. The Sugar Bowl had a “subcommittee” on golf. Every bowl director walked around flashing plastic, buying favor with anyone and everyone. The BCS was an exercise in cronyism and hypocritical corruption. The same people with their palms out – college sports leadership – wrote and enforced rules that would excommunicate any of their athletes that took even a fraction of what they did.

When the outside pressure for a better system came, the bowl industry tried to wage a PR campaign, hiring lobbyists, media spokesmen and even Ari Fleischer, the former White House spokesman for President George W. Bush.

The PR assault was a disaster, of course, because not even the most brilliant spinmeister could squeeze such a heaping lump of coal into a diamond. Fans grew to hate the BCS even more with each laughable justification. By the end it wasn’t the crime, it was the comedy.

Eventually, no one wanted the BCS around except the people paid directly by the BCS. Fear of being left behind drove unnecessary conference realignment. Everyone got tired of it. The new generation of college athletic directors make a lot of money, so complimentary rounds of golf don’t hold the same allure they did for the old guard.

Read it all here: http://sports.yahoo.com/news/chuck-the-bcs-175022477.html

Posted by
Andy Schwarz

Just read your post on the Colleges losing money from bowl games and other myths, and it sparked a question or two. So, how does the net revenue break down for teams within the conference top to bottom. Wake Forest gets the same check from the conference that VT gets from bowl payouts. If VT exceeds the "expenses" allotment then they would net less than Wake. In that analysis it is more profitable to stay home.

Asked by
medley32

maybe in the very short-run, and from a pure accounting perspective, yes, but that misses all of the off-the-expense-sheet benefits of attending a bow: boosted donations, higher attendance, etc.  I think if Wake were consistently more profitable than Virginia Tech, we’d see more schools imitating Wake.  I am a big believer in what economists call “revealed preference,” meaning that when you see an economic actor choose b/w two options, you can infer it preferred the option it chose.  Everytime you see a coach get a raise to stay at his current program, it’s telling you that school thinks winning is worth spending more, not less, on.

Posted by
Andy Schwarz

FBS Entry and Exit since 1984

FBS Football Entry Since 1984

Year School

  1. 1987 Akron
  2. 1989 Louisiana Tech
  3. 1992 Arkansas State
  4. 1992 Nevada
  5. 1994 Louisiana-Monroe
  6. 1995 North Texas
  7. 1996 Boise State
  8. 1996 UAB
  9. 1996 UCF
  10. 1997 Idaho
  11. 1997 Marshall
  12. 1999 Buffalo
  13. 1999 Middle Tennessee
  14. 2000 Connecticut
  15. 2001 South Florida
  16. 2002 Troy
  17. 2005 Florida Atlantic
  18. 2005 FIU
  19. 2009 Western Kentucky
  20. 2012 Massachusetts
  21. 2012 Texas State
  22. 2012 UTSA
  23. 2013 UNC Charlotte
  24. 2013 Old Dominion
  25. 2013 Georgia State
  26. 2013 Georgia Southern


FBS Football Exit Since 1984 
Year Schools

  1. 1986 Texas-Arlington
  2. 1987 SMU (resumed 1989)
  3. 1987 Wichita St.
  4. 1990 Lamar (resumed as FCS in 2010)
  5. 1992 Long Beach St.
  6. 1993 Cal St. Fullerton
  7. 1996 Pacific

Posted by
Andy Schwarz

The Brave New World of Journalism

So, no sooner did I publish something with a broad audience than I discovered one of the perils of having people actually read my work.  I made a mistake.  Not a huge one, but one I want to correct and explain.  I got a very nice email from Brent Schrotenboer, the reporter who wrote the USA Today article on Florida State’s complaints about having to pay full-price for tickets that had to compete with other tickets sold at a discount through Groupon.

I was focused on the article’s explanation that having to pay for Orange Bowl tickets caused Florida State a “exceed its expense allowance by $1.4 million” because:

"FSU sold a small portion of that allotment and needed help from the Atlantic Coast Conference to pay $2.1 million for unsold tickets. The loss caused FSU to exceed its expense allowance by $1.4 million"

After that, I threw in a paragraph saying that Schrotenboer had added “a caveat that if you take the money the ACC teams get from other bowls, Florida State came out ahead.”

I narrowly focused on this sentence: “The bowls are profitable overall for the major football conferences when the revenue and expenses for all games are combined.”

But Brent very politely pointed out to me that’s not what he was saying, as I would have seen if I’d read a bit more carefully: “Last year, the conferences collected a record $210 million profit from the bowls. But that profit was largely driven by the five games that constitute the Bowl Championship Series: $202 million from the Rose, Sugar, Orange and Fiesta Bowls plus the national championship game.”

So that’s my bad, and I apologize to Brent.

But fascinatingly, in Brent’s email, he also told me that UConn insists it lost money on the Fiesta Bowl, which he attributed to a narrow focus on a single-year’s worth of revenue-sharing agreements and accounting.  So, without saying that Brent Schrotenboer believes this (b/c I don’t think he does), this actually gets right at the heart of my point, which is that bad accounting can fool some people (including UConn itself) into thinking the Fiesta Bowl is a money-loser, when in reality it’s the nature of a conference agreement that causes the paper losses.  If accounting has any purpose at all, it should be to inform businesses to make smart financial decisions, but UConn appears to have been fooled by its own accounting.

And so it is my small hope that by pointing out the difference between solid economic analysis and an expense report, I can help people sort out the difference between a school exceeding its conference reimbursement amount and actually losing money.

Posted by
Andy Schwarz

Accounting for Profit, BCS Style

Have you ever wondered why college football programs seem to throw so much time, money and effort into reaching a bowl game when their accounting statements show losses when they play in the post-season?  The answer is that the accounting is masking the truth — Bowl Games, especially the biggest ones, are very profitable.

Turns out it’s a combination of factors that creates the illusion.  The biggest and most shocking is that those accounting statement everyone focuses on sometimes zero out the Bowl payout before starting — not hard to lose money if you assume the revenue is zero!  The rest, though, is a complex economic engineering effort, balancing each conference’s long-term desire to maximize total revenue potential, with the very real short-term incentive to minimize costs competing amongst itself for an already-guaranteed BCS slot.  AQ Conferences don’t want to outright kill their schools’  incentive to win, but they do want to tame it a little.  Maybe even more than a little.

Think of it as the college football version of Odysseus lashing himself to the mast to avoid the siren’s call of “overspending” on football.

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 Want to read more?  Check out my inaugural post for Deadspin’s “Regressing” website, a reprint of the final Sportsgeekonomics post of 2013.  Read it all here at http://regressing.deadspin.com/teams-in-the-orange-bowl-dont-make-any-money-and-othe-1494130032.

Posted by
Andy Schwarz