Series On College Athletics Cites UA, UAB Examples
UAB football is a case study in return on investment, says Bloomberg.
UAB wide receiver Joe Webb during practice at the 2010 Under Armour Senior Bowl in Mobile.
It was a hard thing to absorb in a football-crazed state, nestled in a football-crazed region, during the very week that the University of Alabama did war with Clemson for the College Football Playoff national championship. Nevertheless, there it was, a weeklong series by data-driven Bloomberg, subtitled: “The business model of college football, long a financial boon to universities, is breaking down.”
Fake news from Russian hackers? Pseudo-analysis from football-hating nerds with Coke bottle glasses? Maybe, but at least the University of Alabama came out looking brilliant compared to other programs.
Specifically, one installment that focused on crippling debt that some programs have run up noted that UA remains at a good place on the balance sheet, with millions coming in from TV and marketing deals, compared to debt service of $225 million over the next 28 years. The poster child for debt was the University of California, Berkeley, which owes $445 million and recently announced it was putting “all options” on the table to deal with the situation.
Bloomberg noted that, according to public records, athletic departments of at least 13 schools in the country have long-term debt obligations of more than $150 million as of 2014 — money usually borrowed to build ever-nicer facilities for the football team. Most of those schools don’t have the Crimson Tide’s top-drawer marketability.
The University of Alabama at Birmingham got a long mention for its attempt to punt football, which resulted in death threats and police escorts for UAB President Ray Watts. But again, maybe it was genius. The resulting furor brought $17.2 million within six months from alumni wanting the team back, with another $25 million collected after that first influx. That two-year total of $42 million is more than UAB’s athletics raised in the prior history of the program.
Many schools are “sloshing” in TV money, the series concedes. ESPN inked a deal in 2014 to pay $7.3 billion over 12 years for rights of the College Football Playoff, kicking up the payday for power conferences like the SEC to $55 million, double what they got from the previous Bowl Championship Series.
But Bloomberg reporter Eben Novy-Williams suggests that new media and millennial preferences for recreation may soon bring significant changes to the model. Uncabled and never-cabled millennials aren’t buying tickets like their parents did and have found new ways to watch sports, suggesting TV contracts in the future won’t be as lucrative, Novy-Williams says.
Still, in SEC country, the Tide rolls on.