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tv   College Sports Revenue  CSPAN  November 28, 2014 10:00am-11:29am EST

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program about small businesses and how they face the 114th congress. kevin coleman will join us for that discussion. another aspect of consumer safety. credit card information. you may recall hearing about the state of breaches. -- those data breaches. commerce and that i will government. -- commerce and the federal government. that and your phone calls and the papers too. 7:00 tomorrow morning. see you then. ♪ [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit] [captions copyright national cable satellite corp. 2014]
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♪ >> coming up today on c-span, a discussion about the future of college sports and pay for student athletes. look at early attempts to treat post-traumatic stress disorder. supreme court justices samuel alito, sonia sotomayor and clarence thomas reflect on the nation's highest court. later, her series of congressional -- our series of congressional retirement interviews continues. >> this thanksgiving weekend, we continue our four-day book tv in american history tv programming. saturday at 10:00 on book tv, jonathan ike on a history of the birth control pill. bill nye the science guy and why he thinks the teaching of evolution and creation together
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in size class is not only wrong, but dangerous. -- in science classes is not only wrong, but dangerous. george washington and benedict arnold. a glance of american life between 1914-1930. find our complete television schedule at and let us know what you think about the programs you are watching. call us, e-mail us or send us a tweet. join the c-span conversation. like us on facebook, follow us on twitter. >> up next, a discussion on the issue of money in college athletics. panelists including sportswriters and university officials discussed the profits made from sports programs compensation for student athletes and possible reforms at the ncaa. the big 12 conference hosted this event at the national press club in washington. it is 1.5 hours.
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>> thank you for joining us today here in washington. the numbers in college sports are staggering. that could easily be something we are talking in terms of points scored or yards gained or anyone one of a number of things measured quantitatively. attendance participation and money. according to filings with the department of education, in 2011 , college sports combined to generate more than 12.6 billion dollars. the university of texas took in more than $165 million last year.
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yesterday and is paying an excessive $600 million a year to televise the college football playoffs. the price tag for the ncaa basketball tournament, time warner and cbs paid $10.8 billion for a 14 year deal. athletic departments at many schools operate in the red. a star player on the change of team that won the men's fastball tournament last year said some nights he goes to bed hungry. where does the money go? there seems to be more of it than there ever has been before. not everyone agrees that its distribution has been wise or equitable. here with us today are a handful of men with significant knowledge and experience regarding the most visible sports in our culture and how they are run. steve berkowitz is a sports
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project reporter for usa today. he is dedicated to compiling newspaper's college of sports compensation and finance database. patrick sandusky is the chief communications and public affairs officer for the united states olympic committee. he is a former college athlete office of lineman at northern illinois. krystal conti is the director of athletics at tcu. steve patterson is the men's athletic director at the university of texas. he was previously in the same position at arizona state. he spent two decades and professional sports. he was the general manager of the houston rockets and portland trail blazers. pete is the senior writer for
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sports illustrated where he covers college football and basketball. he previously worked for the new york times where heis reporting was nominated for a pulitzer prize. the big 12 commissioner had planned to be here with us today but he is home recuperating from surgery. we want to wish him the best. all opinions expressed here today are expressly those of the panelists and do not represent the organizations with which they are associated. this is a time of tremendous of people in sports. -- of people in sports. northwestern football players should be allowed to form a union. the ncaa was founded in august to be in violation of antitrust law suit brought by the former ucla basketball player. that was only one day after the so-called big five athletic conference broke away from the rest of the ncaa.
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the common theme in all of these items is money. why don't we start their. let's start with the two men on the panel charged with responsibility of overseeing programs at universities. how does the commerce of college sports change? >> i don't know if it has really changed much over the years. for a long time, schools have competed. it is part of the american culture. there have been movements to regulate that going back more than 100 years. what we see are greater facilities, larger coaching contracts, biggerstaff we had in the past. we want to provide the best student services we can to have the best outcomes for student athletes.
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>> i concur with steve. you look at it as the evolution of college athletics from the time of the ncaa being formed to -- title ix is the greatest thing in college athletics. it has created parity in football. using think about the popularity of football today, you had a limited number of scholarships back in the day. the rise of florida state, organ, tcu baylor -- they have become relevant in the landscape of college athletics today. the popularity of college athletics is second to none. yet, we are running a business based on people's passion.
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for us, the evolution has changed, commerce has changed drastically. how we fund college athletics has changed. what are we providing for our student athletes echo it is be on a handshake. it is a 50 year decision. the demands of winning and keeping a coach and providing opportunity for young people are ever greater. it is always evolving. >> what i really meant is giving what -- given what has happened in the past years, within the last few months, the prospect has changed. do you foresee business being done any differently given the decision, the possibility that your model may change?
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>> a different question. one thing about college at, it is ever-changing. do i believe a student athlete should receive full compensation? i do. you think about the o'bannon case, that will put tremendous pressure on college athletics. for us at tcu, getting to the big 12 conference has been great. this newfound money everyone things about that we have received -- we lessen our burden on the institution. we are part of an institution. seven years ago, we had 7000 applicants for 1600 spots. the success of our robotic program and the rise of tcu going to the rose bowl ours --
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are 20,000. how does that affect title ix? you can't say we are only going to provide opportunities for two sports. we have to do that. how do you do that? with to realize this is an opportunity for everybody and we are prepared to do that. >> you have spent a considerable amount of time coverage and -- covering college sports and the numbers. how do you see the cost of attendance changing and affecting the way colleges and universities the business? >> it will be an interesting thing to see how colleges managed to do this. whether or not this is going to
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be the kind of thing that perhaps better justifies institutional involvement in supporting college athletics programs. the trend has been towards making athletic programs more self-sufficient. in a way, it seems to me that this is creating a perpetual motion machine that has resulted in increased pressure to increase revenue which has resulted in a situation where we have so much revenue being generated that the general public, people who are lawyers judges looking at this and going, well, there is so much money being generated here that something more needs to be done for the athletes. for the way they are participating the generation of that money. it is interesting questions as
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to how colleges want to deal with this, and what impact of that will be. we continued to further perpetuate this. >> patrick, chris mention the impact on title ix. scott was in here earlier, speaking about olympic sports, and i guess you could ask about the olympic sports, the nonrevenue sports. >> title ix was the greatest thing to happen to college athletics, and to the united states olympic team. if you go back and look at the women's games in the london games, they would have finished third in the medal count just by the women alone. we are benefited immensely by the inclusion of women in sport and i dare safe we are not the best culture of inclusion in sport, i do not think that anybody can say they are better than us. title ix has been fantastic for us. but there is a harsh reality. the stresses and finances of an unplugged program could come under.
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no one has ever lost their job because of the poor performance of their olympics or program. people pay attention to basketball, to football, and the metrics i which they get their donors and fanned raising done and their sponsorships and the tv contracts. there are a lot of implications of the event have negatively impacted supporting programs. increasing the cost for the universities for their student at leeds. you look at how many wrestling programs around the entry have shrunk over the years. the number of domestic programs that have shrunk to get that balance. make no doubt about it that the olympic sport programs are more under threat than they have ever been. >> the topic of this panel is supposed to be about morning. it certainly has been in the
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news, allegedly selling his autograph and should a player be allowed to sell his own likeness? >> that is a great question. there is a black market in college football. you basically have basketball fueled by boosters. you have a billion dollar business dedicated unfree labor, and this is to fuel the billion dollar beast.
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i think everyone is happy with the way it is working out right now, the black market existing in the shadows as it does. if you start to allow people to use their likeness to make money, which conceptually is very easy -- he should be able to make money all caps off intergraph -- off of his autograph, it opens onto pandora's box. how much, where does it go? when you sign with them, you can automatically get this much. so many unintended consequences of those who have not sat on the baseline and watched how the world works. they do not know how the reality is.
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what university could afford -- it will become a bottleneck competition. everyone is looking for an average everywhere i go. in the reality of the application of the it could get very tricky. we see these autographed guys who look like you're are scum of the earth guys trying to make money off of kids. it would open up a lot of really scary doors. it is something that i think i'm a once you get to full cost of attendance, once you go past that marker it gets really complicated. >> this very complicated
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injunction behind the o'bannon decision, i think there is some sensitivity behind that. that is what makes the list next round of lawsuits, the ones involving martin jenkins, the player that is represented by jeff kessler, these big cases that could cost the school a lot of money in damages through retroactive to deferential between cost of attendance and grant aid, and what the future would be with the ability of athlete to get. this becomes a really big deal. i think that is why the judge was trying to create some ink -- something that was similar in between. it is a very difficult issue to
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balance. the lawyers that litigate that case even now are trying to decipher what the judgment in certain ways in the way the ruling and injunction were set up. >> cost of attendance describes on every campus, at our school it might be as much as $4000 or more per year. it is a calculated -- a calculation that is not easy to come to. i want to go back to something said earlier. there is this misperception that the labor is free in college athletics. that is not accurate. if you're a full ride football player at the university of texas, the benefit you get for room, board, books, tuition, training, and medical, it is
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$69,000 a year. that is tax-free. that puts you at the top third of the household incomes of the benign states. -- united states. if you're a basketball player it is $77,000 a year. i do not think that student athletes are being taken advantage of when they are in the top third or quartile of household incomes in the united states. >> tutoring, networking, alumni, things that benefited me in my career. i was not good at football. i was a backup. i realized that quite quickly. but the program itself was there for you to succeed, to have the tutors, to have the individual specialization.
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it's a network i rely on today nearly 20 years later, it is really hard to quantify some of those costs as a former and he -- former athlete who by looking at me you can tell i never went to bed hungry. you really get an opportunity to really do more than just playing football. to get an enhanced student fixed -- student experience, beyond what the normal student gets but it really is wonderful. >> i will back his point on this. we did a study several years ago, we looked at the value of the men's basketball scholarship. it is $120,000 when you look at all of the things that he pours in.
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there are other things that have actual real value that you can tally up with free admission to games and other things that people do not think about. >> 6:00 a.m. practices during spring break? [laughter] i would take that out. >> you know better than i do but in terms of the demands that are placed on the athletes, i think that is where the friction begins to come in. some of the things we heard in the o'bannon case, and that testimony of what the athletes do, what they feel they have to do, what they are expected to do, and the nature of that trade-off. how all of the works in the nature of the pressures and demands that are placed on the athletes in addition to the
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-- in relation to the amount of money that is being generated based on what they are doing. >> i agree with steve paterson and i let him down the road by saying free labor. these guys have it really good. i'm on the road at seeing different campuses. i see that they go to bed hungry narrative is one of the all-time full narrative that could ever be eventuated in the history of college. if you really parrot on the math -- pare down the math, there is no way, if he is going to bed hungry, that is his own fault. i've spent a week behind the scenes at mississippi state, and let it tell you i gained five pounds being in their building. these guys come off the field
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and may have shakes specifically made to their flavor taste weight gain, weight loss and they go into the practice facility and there is a snack bar. that headline became a toxic thing. these athletes should be fed, if there's one thing they should never limit it is feeding athletes, it is in of them with medicare. -- it is medical care. those basic rights. those things are changing. it is a great thing for everybody. i do not think you will get anyone around sports to disagree but it is a misuse of what they are giving. -- they are given. >> i think this narrative, that said, probably has something to do with it. the establishment is making millions and millions of dollars. in essence, there are kids who
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come from nothing and have their noses pressed up against the window and saying where's mine. that is not fair. >> you have to say -- outside of the g.i. bill, college athletics provides the largest need case in america and united days. i came from a children's home in taos new mexico. my outlet was through sport. the second year they dropped track and field to luckily santa barbara got my vision. last year we had 85 kids
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graduate from texas christian university. only one went pro. only one went pro. think about all those other kids who are going to go out and do phenomenal things, but we focus on one who did not have enough munchies. if you knew what we give them, holy cow, there is no way he is starving. you're giving him a full ride to go to war. to make a decision. a lot of time those kids are first-generation kids, never happened opportunity to do something. he got done playing in four, but we continue their education until they earn their degree. we lost our voice. what are we providing college athletics? we look at the 523 campus
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athletes and what they are doing throughout their lives, and that is part of the problem. the few with their nose pressed against the window are not talking for the masses. they say i cannot believe i have this opportunity. they say i cannot thank you enough. >> you guys have the greatest renown for doing things that create most of the revenue that support a lot of the other athletes. in some cases, they are also guys who are 50 years, it results in tough circumstances for these guys whether it is medical, whether or not they got an education that enabled them to get jobs that are useful or gainful.
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we did a story for years ago that talked about guys who talk to us about getting degrees the -- that resulted in them not being qualified to do something meaningful in their lives. there is a plot -- there is a flip side to it as well. i understand on a broader basis that there are a lot of people who are in sports outside of football and basketball who would tell you this is the greatest thing. >> my job is to tell you it is half full. you are half empty. from a critique point of view -- i'm a sociology major. what was he doing echo?
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it was a phenomenal major for me. in tcu, there is not a major you can hide in. we are a bit different. the opportunity for that individual to leave their place and go to school and get whatever degree come are they better off? that is the question. are they better off than where they were, and can become a productive member of society? 27% of the net states have a college degree -- of the united states have a college degree. -- does not have a college degree. is that individual better off? >> i remember being an offensive
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lineman, and he asked us what our majors are were going to be. i said i was going to major in english, and he said are you sure you got that right? i said yes, and he said the new better not get any bad grades this semester. i said i think i will be all right, copy, thanks for asking. but there were guys that mailed in in academically, without a doubt, and there were guys that went onto get engineering degrees and business degrees and got 0.0 grade point averages and got kicked out of school. i saw the whole gamut of that, and you are given at least the opportunity. and i know there's a lot. reasons why or why not people choose or don't choose, i'm not trying trying to say that everyone has the same situation. but while that can happen, there's also opportunity for the athletes as well. >> we're just seeing the general
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competitiveness at american colleges and universitieses just spiking at an all-time high. i saw a statistic at a major football college that the senior class that's graduating now, a third of them wouldn't get in as freshmen now. so you have the admissions competition being as tough as ever, but the football team is essentially on a plane here and here. that's why you're seeing the stuff at notre dame and other places. i think it's incumbent on the university -- a lot these places have million dollar centers, but that gap is not getting any smaller. it's going to be harder to get into school and if you want to be competitive in major college football you'll still need to get to qualify. that will create a lot more situations than we've seen now, at the places who are actually end indicating the kids, who aren't just putting them in i believe studies and pushing them through. the places that have a little academic soul, and you can debate how many do and don't, you're going to see kids failing
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and you're going to see the pressure, kids cheat, kid do different things. because i think that's inherent to the situation. you have 850 s.a.t. kids in the room with 1400 s.a.t. kids, they don't fit. so that's one of the problems we see on the bottom line. >> you don't hear athletic directors saying they should be allowed to major in football. you go to school for dance, you major in dance. you go to school for art, you major in art. you go to school for football, they want to know why you're putting them in organizational studies. not that anybody here is an organizational studies major. but they're actually advocating for them to be part of the students experience, and to your point of 85 graduates, one went pro, you're not saying guys this shouldn't be part of your routine.
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i give them a lot of credit, not just advocating for doing away with classes or making all the classes specific to your sport. >> so steve -- >> it easy to have the discussion revolve around the less than 1% of student athlete that can go onto be pros. even if they go on to the pros they have an average career of less than four years much they then have to figure out how to live for 50 years on average after that. the university of texas has been one of the top three baseball programs in the country, we average less than one stoot athlete a year that goes onto play in the major leagues. in all the years we average about three, maybe four that get a chance to be on an nfl roster. so out of the 500-plus kid that we've got on our campus every year, there might be a couple,
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three, four, five that go on to play. our job is to man positive outcomes for our student athletes. folks come in with all kind of scores, we do have minimums now, we do have core courses that are required. one of the things we don't talk about here is the problems in education leading up to college. you compare us to other countries in the planet we're in the 20%'s, so we're not doing a great job there, frankly. so you're right. as the g.p.a. and a.c.t. and s.a.t. scores go up, i cone get into the university of texas today. i went there twice, graduated twice. my son is there, my daughter. i couldn't get in today. that's what's going on at universities awe over america. >> what i wanted to get to before was how do you manage that. what do you do as administrators now? >> we make sure that we hire the
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right kind of people that can provide the kind of services to our student athlete, whether it's academic support, we spend more money than any other university in the country in academic support. we make sure we got one-on-one support, we make sure they get through and stay on track to gr on time if they can. we provide services for them to come back if they don't graduate on time, say they're a baseball player and want to try to make it after their third year, they can come back and finish their degrees. and we make sure we have career counseling for them when they leave the place, we make if they get injured we provide medical services for them, up to two years after they leave to make sure they're healthy. so we provide these kind of services to make sure we manage positive outcomes for our student athletes. >> i think you left out pep talks. >> the reality is we laugh about it somebody like a matthew mcconaughey, it's oftentimes much more important than a chance to meet somebody like red
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mccombs who is a great entrepreneur and can help kid get a job and start and foster their careers. that's the kind of thing you mentioned earlier that you get at universities, you get those kind of tools and meet those people and go on with your career. chris, you wanted to add something? >> no, we're good. >> do we need the ncaa? >> you need something. it always amused me that the idea of these schools are going to break away from the ncaa, to which i respond what are they going to do? there is inevitably going to be some type of a structure, i think, that schools will want, and once you create a structure the whole thing is geared around the idea of everybody trying to keep everybody else from cheating or doing something to get an advantage over somebody else. and so whether it is under the
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ncaa's office or some other entity that we haven't thought of a name of, seems like there's going to be some sort of underlying governance, something to hold the enterprise together. >> back to the ncaa, the institutionings make up the ncaa. they've done a great job for us in terms of academic reform, the mission of what we're all about. it really started out with safety at one time. the things that have happened, we've needed them and they've been great for us, but we've done a poor job of talking about why we need the ncaa, when they do for us. we make them up, our leadership is on the board of directors.
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a lot of our membership serve on the ncaa. they're a necessity. conferences really took power, if you will, when the tv contracts, in 1983, and the president said -- football. college football is not part of the ncaa. part of it's eligibility and compliance, that is it. football is outside and conferences are taken over that realm. there was a void that was left through the antitrust of television way back when. now we're put in a position we have two different entities, the college football over here and the ncaa. they're still governed by us as members. and today we're looking at the economic model of it which is big numbers. and if we would have been back i want to say, in 1985 they talked about adding the cost of attendance to the membership. we had to go to full cost of
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attendance, and our membership couldn't agree, because at the time the ncaa bodies -- we were division ii. division ii and were going to division i at the time, we had the same legislative power that u.s.c. had. they're two different schools. but you're asking them to vote on a bill about the cost of attendance. they couldn't agree on it now. >> that seems like a perfect opportunity to transition into a discussion with the big five and this new model that we're going to see. so the college football national championship, we mentioned it before, and i'm not sure if i've got the numbers exactly right, i they it ways over $600 million a year from espn. how is going forward with this big five model, how is that going to affect the economics
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with big pieces like this television contract for the football playoff and for march madness? what's the future world going to look like for your schools and perhaps for schools like the one that you used to work for, san luis obispo? >> texas christian university -- we've been in five conferences in 16 years. we're like nomads. the southwest conference broke up and at that time we did everything we could to get back in the big 12. that was our goal. we hit a perfect storm, we hired a chancellor that has a vision that's second to none, we hired a football coach that we're 1-11 and we go to the rose bowl, and our campus has grown, and we're in. and that is fantastic. yet it is daunting, because i thought once we got in, boy, it
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would be a calm ocean. there's more turbulence now than ever. they're saying hey, what about us? i was just there a year ago. and i understood their plight. in our place, our faculty wants to be harvard monday through friday. texas christian, on sunday. and i suffer from adult a.d.d. so i cannot serve all three masters well, but think about that. and you're running a business based on people's passion. it's crazy. >> what do you say to a school like fresno state which is a highly competitive football program, but now is on the outside looking in? >> for the next tranche of schools -- our television revenues for the college playoff went up a little less than double. for those schools -- >> big five.
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>> yes. for those more resourced conferences it went up a little less than double. for that next tranche of five conferences, their tv revenues enoughs went up five times what they were before, so they've caught up in terms of the amount of revenue. >> percentage or dollars? >> it takes a lot less money to get five times, $10,000, than it does if you have $200 million. that may be $200 million. that may or may not be a valid way of looking at it. i'm not disputing that there's more money there for everybody. but, you know, the impact of that and how much more there is outside and how those schools then make up that gap, i think is going to be an interesting question.
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this is what was touched on earlier. how will the money be allocated and what will be the impact of that on athletics programs? . >> all the distributions are 22% of our revenue. what i am saying is, if you look at the relative allocations, it is about twice the rest of them. the reality is if you look at where the eyeballs are generated, it is the top five conferences. so i think those schools cutting the deal, and they are better off today than they were before. >> i think the gap has always
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been there, and this power five branding has just perpetuated the perception a little more. the financial gap has always been huge, and while i do have some empathy because those power five, recruiting wise, are going to have to fight. they were have-nots two years ago. they just weren't quite at the fined as have-nots. what i'm saying is i think they've actually done a poor job in the football playoff if -- of letting somebody know if a boise is a 3-0, they can still get in and again i'm not going to say that doubled the access but the whole point is their lot
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in life is pretty similar now. what they're fighting more is perception. and i agree with steve that you can parse numbers and say five times as much. it's easy to be cynical about that kind of stuff. but at the end of the day they're about where they were before. >> they're going to get more difficult over time for that gap to be overcome. the gap that's occurring now between texas' budgeting and other schools in the fbs or within division i, every year that gap grows wider. does that mean it's impossible for savannah state to be able to compete on any level? maybe yes, maybe no. there have been teams that have done some pretty cool things. and how those -- and for sure all those opportunities will be there. i happen to think and there are
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a lot of people who have bet a lot of money who are really smart businessmen that the the schools like texas at the moment believe it or not are actually still underleveraged as business propositions. companies like i.m.g. are wagering a lot of money that those businesses are underleveraged. people running i.m.g. are not in the business to lose money. they're paying these schools a lot of money thinking that they will then be able to commercially recoup that and get even more money. how does that cycle continue to go and what is going to be the impact i think is a really i interesting question. >> if you look from us -- and i have a unique perspective of where we were in terms of the economics. >> where would you rather be? >> of course.
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steve just told you how great life is at fresno state. would you rather be in the mountain west or big 12? >> big 12, thank you very much. you look at from this perspective though. economically when i was in the mountain west conference and things were happening to the place where we are today, one is perception. two, the big boys. but i was the new york yankees of the conference. we had the biggest budget, we won, we were it. today i'm in the big 12, i have the lowest budget. there's a huge gap. the economics within the 64 are still great. but we're in a position now where we wanted to be from our particular institution in the big 12. that was the biggest, and best conference in our region. it made sense.
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we were brethren -- we have been playing texas since 1900. but the idea we have been playing these schools for a long time. and when the conference shifts we're now playing san diego state, they have no regional draw to us. yet the television, the american eyeball has determined that these five conferences drive all the traffic. think about that. they drive all the traffic. we're a little bit david and goliath. that was a one-off. the terms on any given saturday look at the ratings who is driving that traffic. and if you're school running a school, an athletic program, based on people's passion and wanting to do what's right for your institution, for us to get in the big 12 is the right move for what we wanted. for our president, for our student body, everyone who wanted this, yet i can look gack and media will back at this. and media will say, there's only two schools that made it into the power 64, if you will. us and utah.
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that is it. it's an interesting dynamic when you think about our brethren going, where would you rather be? every one would rather be in the big 12 today. >> it comes down to those institutions deciding what kind of investment, how much they want to invest. it could be from the school, it could be from the alums, it could be from other donors from the student body, from businesses. you know, northwestern is not a big school, tcu is not a big school. we're going to have a heck of a battle on thanksgiving. i don't know who's going to win. but if the schools want to create an environment over who's going to invest in athletics because they perceive there's a value for the university they can decide to make that investment. what they can't do is not make that investment and sit on the outside and criticize the
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system because there's plenty of schools who have made the decision we are not going to invest. and some of the most successful universities in the country. the ivy league is not going to dry up and blow away. chicago hasn't disappeared. so it's a matter of where you want to make your investment. >> what does the future look like then for the schools that choose not to make the investment that the 64 making? >> i don't think they're going to be in a position to take advantage of the eyeballs that chris is talking about to drive the interest in their university the same way the schools are that decide to make that investment. >> that's a chicken or egg discussion. >> no, no. >> but how am i supposed to make that happen? do i run up student fees? do we take institutional money
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and drive more of that into the program? those are the kinds of questions that schools are having to start to grapple with. are you going to ask the government of the state to do this? you look at the program in hawaii -- i realize that is an outlier program on a variety of levels. that program is facing unbelieveably difficult choices. and there are state legislators in that state who felt the solution is that the state government ought to help support the athletics program there. and you can debate that on a public policy level and whether or not that's a good investment by the state of hawaii or whether it isn't, but there are a lot of these decisions that get made that create financial situations for people who don't have a say in it. for example, on a student fee basis. whether or not the fee structure for university, for students
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ought to be driven by those kinds of conversations. you know, i think that raises some really legitimate questions. >> it's getting a little too either/or. of course they wanted to get back into the big 12. that's where their roots were from. we can trade notes later for thanksgiving. the fact of the matter is when you look at my school they left the maac thinking they were going to do bigger and better things. they went independent and then they traveled through the midwest. they came back to the reality that the maac was the perfect fit and they wanted to focus on being part of a strong mid-tier conference. it fit. they've been focusing on that as a school, and one of the downsides is that a school that size don't have the robust programming of sports beyond to
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the number of levels let's say texas or texas christian does. but they did feel comfortable that was where they wanted to be as a school and they've been pretty successful in terms of winning football games and being part of what felt right for their brand and for their university. they don't have ambitions to be the next big 12 expansion school or part of the big 10. so i don't know if every school is trying to be in or out. >> to steve's point in terms of an investment. i was at rice university athletic director from 2006 to 2009 and i remember being interviewed. this is my fifth-year anniversary. they asked me two questions. can you raise money for a football stadium and can you get us into a bcs conference? now, i will agree to anything.
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whatever you say. why do you want to do that? because you in this room are going to build that football stadium. that football stadium is $164 million raised. no debt. donors decided this is what we are going to do. >> if you have the donor base and you can do that. >> but this is just my story. this is our story. we had six people who gave us $15 million each, and i referred to we nickle and dimed $1 million, $2 million, $5 million. >> a lot of nickles and dimes. >> yes, sir. a you've got to love oil. but the idea was this is way before the big 12 -- we were in the mountain west conference. we were heading to boise in the festival. this is the ambition of what we needed to do. that was so awe inspiring to have a board with this audacious goal was fantastic. but donors, not knowing what
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lay at the end of the tunnel. we dipped our toe for a month and that went out we were fortunate to get in the big 123. but the same thing we're building a new basketball arena donor funded. and our chance lors challenged is the athletic program will not be an incumbrence. we will raise that money. that is a choice. our donors have really inspired and grappled with. it's been fantastic. and the university now has a $30 million gift for a business college. donors say we're a great institution. but they've made that investment. that was their audacious goal. i can't speak for others but that was the university our size. >> that's great. that speaks well to the donors to the universities, to your ability to convince those people do donate. but you look at a school like
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university of california which just has dumped hundreds of millions of dollars into their facilities, and some of that was simply they had to seismically retrofit a football stadium built over a major earthquake fault. so there's a certain amount you've got to deal with. but the way that kind of financing works is a different setup than you're talking about and where that money comes from. and the california athletics department has a model that works for it great now. but if it doesn't and something craters, where is that money coming from? is that coming from the state? from the students? what kind of impact is that going to have on the bond rating for that university? and the downstream impact on students and the bills they're having to do all that stuff. i think to me again, as you look down the road, those are the
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kinds of questions that i think that you guys have having to deal with and administrators are going to deal with and students are to some extent have a voice in and to some extent as customers of the universities are having foisted upon them in order to do that. >> that's not true. >> how many -- >> wait. the department of education said you can't do that any longer. at the university of texas, we had to go market to our students what's now the big ticket at the university of texas that replaced what used to be called the bed tax that everybody had to pay and we wound up with a better revenues, more students buying them, and better product for the students because we had to ask them what they wanted and go sell to them. so it's not fair to say you're imposing something on the student body. the reason cal had to replace their football stadium is because their board of regents said you have to fix it now. and it was a difficult construction projuct.
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-- project. out of the $300 million they spent they spent about $175 million doing seismic which got them no revenue. they could have potentially made a different decision. they could have said maybe we'll go play where the 49ers, where the raiders play. we're not going to have football any more. they made the decision to keep and fix it. that's their decision. >> i'm not disagreeing that's their decision but there are implications and situations where students have a very moderate -- a small voice in whether or not, for example, student fee increase is imposed, where those decisions are made at the governing board level. >> i think you're misinformed on that. they have to go to a vote. student body votes on that. >> that's not true. there are state institutions where the fee structures at schools are decided on by
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governing boards. there may be student representatives on those governing boards, but that's going to be one vote. or perhaps there are different vehicles for students to do things. but i think there have been plenty of instances where these kinds of fee increases have occurred where -- and there is no perfect way. you can't canvass 70,000 students and make a decision. >> i think every case is different. from our perspective we're only talking about where we are today. we have chosen to be great in all endeavors. if you look at recruiting a faculty -- and i use this all the time. if we're going to recruit the great chemists and students, we can't use 1950 bunsen burners. you have to evolve. you have to build, you have to recruit the finest students.
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at tcu, we're trying to compete with texas, harvard, yale, princeton for the finest students in the country to come. big businesses -- colleges and universities are big business. where is my little johnny going to school? we had a chancellor -- we were not ranked academically. today we are ranked 72nd in the country. we're recruiting some of the finest kids to come to our campus. but you have to invest in chemistry, physics. and we don't talk about that part of the business. we focus on athletics. we make up 90% of the media, but we're only 3% of the entire budget, and in some cases maybe 10%. but the focus is a small focus when you look at the totality of what a university business is. we focus on that little piece.
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>> so we've established the fact that you're on one side of the fence or the other. what's the ante if you want to be on the side of the fence with the haves and not the have-nots? you've been on the other side? >> i couldn't tell you that because you start to look at one of the things for us when this whole thing was a geography. we were in the right spot the right media market. you can think about boise. >> what are the investments that were part of programs that you were associated with that you had to make? give us an idea. >> what chris hasn't said is the dumb luck of the s.e.c. poaching two big 12 schools that allowed them to come in. they could have built all the stadiums but if the big 12 stayed solid they would still be the yankees. >> texas a&m.
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>> always be in the big east because nothsing left and they expanded, we would be in the big east. traveling east, my friend. >> but we're here to talk about money, so give us some kind of an idea. what does it cost? >> in terms of the investment? think about it. we didn't know -- when we made the investments we made with an unknown future. we were in the mountain west conference. that was our choice with the idea what a new football stadium sustain our growth? would it continue to move forward? we didn't know all of a sudden the opportunity would be there. we did not. so it's hard to sit there and say you've got to do this in order to do that. when we were in the position -- i tell this funny story -- never underestimate a college keg party. >> amen. >> and here's the deal. i'm in college with a guy named jamie dixon, a basketball coach
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at pitt. i thought he went to santarba -- santa barbara. he said, no, i'm coming in. we concocted getting in the big east saying this is who we need to talk to because that was our goal. the time they were in danger of losing their bcs hold. if they dropped tcu they maintained their points. so they wouldn't drop. it was a perfect marriage. who would have known a&m and missour were going to leave? we were content with that. but all the moves we made had happened without the knowledge of what was going to take place in the landscape. we would have been perfectly content in the big east knowing what we knew then. but once the landscape changes because of our geography and dumb luck we're i believe to get into the big 12. there's no number. there's no magical number because boise has done wonderful things with their investments. byu has done wonderful things. san diego state, cincinnati,
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connecticut -- these are teams -- where you start to look, you can start putting cases. part of it is our geography and investment. >> right time, right keg party. >> we were successful. that's right. >> using cincinnati as an example. they have an accumulated operating debt in the tens of millions of dollars, and they're paying money every year or the school, or in some form of fashion, somebody is paying interest on that debt. that debt is sitting there. that was a decision that was made by the university to make that investment. going back to the question that you were asking about, what's the answer? i mean, and they have done things facility-wise and so forth. you look at some of what's happened around the pac 12 since the new television contract that occurred there. these are schools that were established schools, and you
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look at what's gone on within the facilities, boom, and they paid football coaches particularly within the conference. it's been a huge increase. and these were places that are already in. they didn't have to ante up to get in. they were already there. and so -- >> they have to see it though. >> you're still playing the game. and there's not -- you know, it's an amazing -- you look around and see -- you know this really well -- from what's now going on at arizona state in terms of the facility and quest for the sport village. that went on there. and all that was being seeded by that television money. you know, so that's where the ante is. it's in the facilities, in the coaching salaries and doing all
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those kinds of things. >> are you looking at it a little too black and white? i know that's what you're supposed to do you said you were a cynical journalist. if there's an oscar wilde quote that said cynic is the price of everything and the value of nothing. you hear about the olympic games and cost overrun. but people think about the university of texas and what's the brand value of the university of texas and what does the football team add and what does that do in terms of recruiting professors and top students and donors and having matthew mcconnaughay do his true detective thing on the sideline for your athletes? i think there's a little bit of cynicism involved in saying either they made a profit or they didn't and there wasn't other ancillary benefits that happened. whether that's the 50-year program or the brand that's the university. the first thing we've said to cities when we've been looking at a potential olympic bid at
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2024, if you're trying to make money as the first line then you're not going at it for the right reason. to say we want to have them be cost overruns and be burdens on their cities. but you have to see a bigger picture. i totally understand that your job is to get to those black-and-white numbers but i think there is some inherent value beyond just whether or not the profit and loss categories for those schools and the investments. >> i will go beyond that value that you're talking about. look at what the economic engines that these athletics departments are for their communities on a weekend in athens, georgia, in oxford mississippi, in tuscaloosa alabama, in auburn, alabama. and you look at the amount of money that gets generated as a result of that. i mean, to me if that's -- you know, talk about the public policy piece of it and how that's going. there's a lot of questions about
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is that appropriate, is that what college enterprise is all about. and i'm not saying it is or it isn't. if you look at the value of these things, the value of the texas football program every saturday in austin in terms of the numbers of hotel rooms that are occupied, the number of people sitting in restaurants after the ball game, you drive up and down interstate in florida after a game in gainesville and the cracker barrel is full every saturday night. and that's what's going on. you know. >> sounds like we need better restaurant choices. i'm kidding. >> look at this real quick talking about the academic program. the thing about tcu, seven or eight years ago our s.a.t. was what it was. all of a sudden the rise of the chancellor and our football
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coach, perfect storm, now 10 years later we have 20,000 for those 1600 spots. we are the media, we are the brand of our institution. our s.a.t. and a.c.t. have gone through the roof. the quality of student has gone through the roof because the exposure has brought -- there's a president that dropped sports in the big ten years ago long-time member. and 25 years after, 30 years after the fact, he said the biggest mistake was leaving the big ten. mainstream kids love college athletics. they love -- the alums love it. we're packed every game. it's a wonderful experience. we win, lose, or draw, it has become the fiber of our institution and become the marketing brand. for good it's great, for bad it's bad but we make up 90% of olt media. and that brand -- we were a good regional university because of
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the vision of our chancellor and through the rise of sport, we have changed the face of tcu. i firmly believe that. and -- >> every university in the country. >> so there's some value to that. but when you only make up 3% of a budget and think about the engine that is university academic achievement and greatness and you're a small portion of it, we focus so much on the small portion not just the totality of what we bring to the table. >> let's talk for a moment about basketball. we've been spending most of our time talking about football. is there any difference in the calculus between the two sports in terms of the way it needs to be managed going forward given the different, i guess, amounts of being on one side of the fence versus the other? what do you think? >> i think college basketball right now has a giant problem. the regular season is completely
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irrelevant. i went to a texas-tcu game at texas last year. i almost fell asleep. texas was good, tcu wasn't. [laughter] not at all. >> wow. >> you've namedropped your chancellor so many times today. >> contract's up. >> but i really think that college basketball, if you look at the ratings, are completely flatlined right now. regular season. the regular season is completely irrelevant. i had a coach tell me this summer that they had their league meetings and the espn came in, and basically said the maac football wednesday night game of the week basically outrates carolina-duke. so we're an event-driven culture.
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every saturday there's an event on campus at tcu, texas, etc. there's so much oversaturation and one of the negative reverberations is everyone is on tv. so it's not special anymore. most nights in january i can watch nine or 10 games. i find myself watching less because if you can watch vcu during the regular season -- >> you have some serious west coast hoops if you're watching less. >> i like college basketball. i think it's a compelling sport in a lot of different ways, but there's no juice left in the regular season. i think it's somewhat oversaturation, the prism through which the sport is covered. somebody is saying they're not going to be a three-seed, and the tournament is three months away. the tournament is great. there's notting better in sports
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than the ncaa tournament. it's this awesome beast. it rates well. it's compelling on all sorts of levels. the have-nots have a chance. but i think right now regular season college basketball is an abysmal place. i don't see the genie going back in the bottle. >> i would totally agree with you there about our discussion earlier about expanding the size of the football tournament which would i think would be a bad move. but that's a different discussion. in terms of the money, uconn which has won how many titles, they're not part of the big 5. are they? >> you can get away with it more in basketball than you can in football. basically what realignment has taught us is that basketball doesn't matter. and that's fine. follow the money. right? we're in washington.
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the money is in football, the money follows football. when was the last time you sat down and said i'm going to watch an acc football game today? there might be one or two a season. >> i went to maryland. >> any saturday. >> that's kind of an acc game now. i keep looking for maryland in the acc standings. >> there's a few reasons, though, i think for that. because people want an emotional attachment to their institution or their team or their game. so there are a few institutional problems. one, quite frankly, having sat both in the ncaa is the one and done role rule. i think it's bad. the only people it's good for are the agents that are driving the top few guys that come out that can make it into the pros after playing one year. but it makes it more difficult
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to establish an emotional attachment with the fan at the university because then they're gone. the second issue really is the number of transfers. i think it's something like 40% of college basketball players transfer after their second year. so we should have fewer opportunities to transfer and have a model more like baseball. if you want to go to the pro's after a year, go. god bless you. the other guys that make the mistake of going early are limiting their lifetime earnings should stay in college and get a degree. so if they're in baseball stay three years. it would be better for the product. the last thing is do a better job of marketing. our game presentation was terrible last year, and we're fixing that. this year it's going to be dramatically different looking because you've got to go out and work hard to get the people to spend the time and entertainment dollar to come to one of your events.
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>> you're probably going forward in football -- you're not going to have a have-nots win a championship, but it's entirely possible it could happen in basketball. why is that? does it cost less? >> you need one player. >> ok. >> so the game itself. you're saying the game itself. but what about the economics? because we're here to talk about money. is it easier to be a have-not in college basketball? >> the perceived have-nots are really haves. but like marquette has a bigger budget. we look at them through a football paradigm exclusively. even if you look at a place like marquette, it's just where are traditions? basketball traditionally because of the espn and big east is more market driven. those schools who have built up a good reputation in the northeastern region and basketball just costs less.
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you're going to have to pay a coach. the staff is 1/8 of the size. so you can do a lot more with less in basketball which is why butler was able to do what it did. in the basketball league fox put a dump truck of money on the big east to play. they couldn't say no. so even though the ratings were miniscule, they barely registered like a little blip. so i just think how completely different the sports are financially, and he's right -- you do need one player. they have a freshman recruit who is going to be one and done that transforms them from a very good team to a potential final four team. it really -- everything can turn on one player and it's been that case since larry bird and you can go all the way back through history. i don't think that's changed. >> do you think the expansion of
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the tournament to what is it now, 60 teams? >> 69. >> do you think that has contributed to this -- >> i mean, the expansion was basically to protect some of the haves. isn't that why they did it? in the mountain west, they split and they didn't want to give another at-large. i don't know. i should know this probably. but i don't think that small tournament expansion has had a big factor. >> i think it's the number of tv games, as you were saying, there's so many games to watch. and if you're going to compete -- it's really two different markets the viewing audience and who is in arena. we need to do a better job of marketing and selling and creating an interesting environment. because the pros have gotten so good. college really hasn't done a good job across the board at creating a fun environment for basketball.
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you go to this guy's place, it's rock 'n' roll crazy for tennis. you've got to make it faun entertaining engaging environment. and when you can't get the emotional attachment because people are transferring, it's a tough sell. >> i think eist also become -- this is part and parcel of the conference realignment. some of that was driven by financial considerations and a lot driven by football. but the trickle-down effect has been interesting as well. because you've seen this kind of shuffle continue its way down into various different leagues. so you're seeing -- you're seeing alignments and games between teams that just don't feel familiar in a way. and what conference -- what conference is butler in this year? you know, these are -- i think that's had an impact on it as well.
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and that's certainly been driven by financial considerations, i think. >> if i was a missouri basketball fan and used to seeing them all these years and now you see auburn, kentucky and florida which is great, you see a good game. but all those other teams, and mississippi state rolls in. i call it the cube factor. i live in boston, so i use it like this. if you work at an office in boston and people went to different schools, they've had dreadful home attendance in basketball. i think part is there's no connection to them. now duke comes in and it's great. you have two great nights a year. but florida state, there's no reason to care. >> especially in a competitive market. >> but that's a separate issue from what you were talking about before. you as athletic directors want to fill your buildings and create an exciting event. but really, the national
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discussion is driven by how popular are these things in people's homes. and right now college basketball is having a big problem. can you put the genie back in the bottle? >> i think it would help if you didn't have the one and done structure that we have today. >> what would you like to see? >> i would like to see the baseball setup. if somebody wants to come out of high school -- >> let them go. >> they should be coming to the university because they want to be a part of the university. they shouldn't be using it as a training ground. >> i think that hurts the overall perception of college athletics when you do have these kind of tourist students. >> when i was at the university of arizona, they had a great basketball brand, and you could say basketball was our bell cow and football was not in terms of the economic budget in terms of an annual basis. but the one and done doesn't hurt in arizona, or kentucky because their fan base has been
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loyal to the program competing at the highest levels. we've been in four tournaments in 60 years. four. try and look at your success and say -- and we were in the mountain west conference arguably it was better than the big 12 in terms of basketball. they did not resonate in the metroplex. they're good teams. they didn't resonate. >> i would suggest as a fan that you're right about the brand. you could follow those players for four years. >> they were still one and done. but for the 20 years, lute olson was in the final four. he had an amazing record of getting in the tournaments. for us we were in the mountain west conference and -- i mean the big 12. we had to invest. why? because our brand as basketball was nonexistent. but if we're going to make any
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dent outside exposure, we are going to have to have a facility to recruit the athletes because we don't have a long history of basketball tradition. but if you have the shiny new penny and hire the right coach and say they do care, it's like bringing a student saying they just built a brand new physics building, they have a peace prize winner from pennsylvania i'm going there. the same concept in basketball. we're going to make that investment to hopefully you see a return down the road. but basketball -- remember i was running the business, we played a game against kansas. at the time they weren't revenue sharing. god, we must be big money, it was $25,000 for a sunday cbs game. but am abc game against washington, against arizona paid so much more. it's gone from big west monday to big east tuesday, now we focus so much on the tournament
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that in college football for a moment every game is critical. >> it's a cautionary tale. >> you've got 12 games and you are now watching the media going crazy from who is in, who is out, who is moving. it's a six-month juggernaut of your stomach being tied up. i bought a case of pepto bismol because every game means something. in college basketball you can win your tournament and get in. have a magical run. and next thing you know you've got a coach because everything is great. >> i'm going to say it from a fan's perspective, i have interest as a fan because i learn about them. pete writes about them over two, three seasons. it's not one and done. so many people around america probably never knew kevin durant
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played basketball at texas. what if he had been there for three or four years? then that would have been interested in watching. >> the quality of basketball certainly would have been better. >> but the quality of product that you're watching -- no offense -- why would i watch texas basketball? i don't know anything about them. if i don't go to texas, i'm saying. as a casual fan, you do turn to the tournament. >> but the one and done -- magic johnson left after his sophomore year. look at michael jordan -- this has not been recent. >> but it's getting worse -- >> and more pronounced and certainly at certain schools. >> i'll mention going to pac 12 and i'm going to have to buy at the airport. i can name four or five players but if you go through the whole league i can't tell you who has come back. maybe at usc. but this is my job.
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and i don't know. so the casual fan who likes sports and has nine games to watch doesn't know. and by the time he does know the guy is gone. >> again it's a different model for kentucky basketball. just as for texas football. we have to wrap this up. i want to close with a question. if you had to fix one thing regarding the money aspect of where we are heading or one thing that concerns you the most of the road we're heading down, what is it? >> i think one of the things -- one of the places where we're headed right now that's scary to me is that as -- and especially at the lower-tiered schools in the big five, as they struggle to build buildings to compete,
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as they struggle to catch up, i think we could see a purge of nonrevenue sports to focus more money on the sports that matter financially most. i think that's a trend we're going to see. and i don't think that's good for anybody. >> if we go down the road of paying football and men's basketball players as the agents and -- their agents, trial lawyers, would like us to do -- and i've got plenty of friends who are trial lawyers, including my little brother -- we're going to be put in a situation as a series of enterprises that we're going to be forced to make that decision. the nonrevenue sports are going to get eliminated. you're going to see schools ask to go from 16 sports down to 12. i've already sat in meetings where those conversations have happened. and that's bad for the country, that's bad for olympic sports that's bad for opportunities for people to get out of lesser
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environments, get to university, and have a better outcome in life. >> we just can't lose our voice. we've lost the opportunity for young people. and with focusing on finance today of two -- if you think of college athletics, it's a failed business model in the way it's interpreted in the courts. we have the largest streams and we are the largest feeder for the olympics. opportunities for students across the spectrum have been phenomenal. but because america has a vivacious appetite for sports, then we are running that program to fund our entire athletic program. and thank god we have that ability to provide opportunity for a lot of people yet our voice is being lost by trial lawyers, our voice is being lost in the media that says, guess what, everyone deserves a


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