Thursday, April 30, 2009

The Cost of Doing Business

The Ball State Daily News reports this morning that the financial numbers are in for the football team's season ending trip to Mobile, AL and the GMAC Bowl. Their headline, laughable at best, "$142,000 Could Pay for a Lot of Things" gives the sort of impression that the money was not well spent, or that other programs, or areas of need are going unaddressed while those behemoth football players go gallivanting all over Mobile in their fancy jet planes with their silly marching bands and cheerleaders.

Marilyn Flowers, economics professor at BSU, had this to say about athletics, and specifically, charging a student an athletic fee in their tuition. "When it costs so much for kids to go to school, and you charge them $800 a year and most of them don't go to any games, that I think is really unfortunate," Flowers said. Excuse me while I el-oh-el.

It's typical grandstanding and shouting at no one in particular that the .edu crowd does whenever the finances of football are mentioned or discussed. And while in theory, I concur, that a price tag of $142k is a healthy chunk of change for a budget and program already battling financial viability, the fact remains that it is a cost that not only isn't going anywhere, it is the economics of sport that it takes money to make money.

It's akin to looking at debt when you are trying to get yourself to mythical Debt Free Land. Things like car payments and rent/mortgage for the overwhelming majority of the population aren't going to be eliminated from your personal balance sheet. It's a cost of living, one that is somewhat unavoidable, and the key then becomes to keep the cost within a budget, however meager or extravagant it might be. That "keeping within your budget" theme is why we turned down Boise, why we take payday games at Auburn, etc.

For the Cardinals, their GMAC Bowl experience was a costly one, sure. But the net loss was right in the middle of the conference, so in terms of peer institutions and such, we're doing alright, at least when it comes to this game, this season. It wasn't a total financial disaster like some other Bowl trips may have been, and in the grand scheme of athletics, a $142k Bowl loss isn't really all that spectacular, and nowhere the epic failboat that some of the Bowls available to us would have been.

The bigger argument is lack of understanding or thought as to what the "revenue" is for a trip and season such as this. It is unfortunately difficult to measure and nearly impossible to quantify things like notoriety, favor with the public, and reputation. And despite what all of the eggheads with tweed jackets and tortoise shell glasses will tell you, athletics plays a gigantic role in those intangible benefits. As a former admissions worker who met with prospective students and parents, you used the nationally relevant basketball team who had just beaten UCLA and Kansas as an in to discuss the College of Architecture and Planning. "Oh... you like baseball? We just had a pitcher go #1 overall in the MLB Draft. Now, let me tell you about our Teacher's College". The fact remains that most Average Joes couldn't tell you who the top business school in the country is, but nearly everyone could tell you that Florida won the national championship. Sports matter, .edu, deal with it and move on to something else.

The fact remains that debating athletic policy and cost containment the same way you would look at academic programs is a fool's game. It isn't fair to the athletes, the athletic programs, or the administration to be held to the same standard as the physics department, the journalism school, or the business office, just as it isn't fair to hold the history department to the same level as the basketball team. It's different. In much the same way that GE is different from Harrison County REMC. Both similar, but very different bottom lines, economies of scale, and product margin. No one crams 106,000 fans into a Michigan physics lab.

So is $142k a lot to spend on one game? Sure. But what about the department that spends $10k on sending their mid level managers to a conference? How about the department that puts on a workshop or session for high school kids? Someone has to pay for those nametags, box lunches, and folders. What about the admissions office with their mailings, brochures, counselors, and tour guides? I don't see anyone complaining about the small fortune they spend on all of those things. And the reason why no one swings from the rafters in utter disgust about any of those costs above is because of the benefits they provide, however intangible (professional development or community goodwill) or tangible (admission and enrollment) they are.

For the .edu crowd, not understanding sports, not liking sports, not really getting why anyone would watch such a boorish game with unbridled brutality and uncivilized behavior is one thing. Accusing the school or program of financial mismanagement or poor decision making over $142k is simply ridiculous.


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Papa Lou BSU said...

Okay, clumsy spam back here aside, that was a great post. $142K is chicken-feed when it comes to a bowl loss. And as you pointed out, we would have lost four or five times that at the bowl game in Boise that the DN was bitching so strongly about us passing up.

Not to mention that the $142K is partially offset by the free national advertisement for the university that ran during the game broadcast.

The biggest problem with the GMAC Bowl is that we didn't sell enough tickets. Why not? Because of GMAC's stupid decision to move their game out of the traditional holiday window, and into a weeknight where attendees have to take multiple days off (right after the holidays, discouraged in many offices), pull their kids out of school (right after a break, which is forbidden in many districts), etc.

All hassles fans are willing to go through when their team is playing in a BCS Bowl in a top-tier destination. Not so much to see their team play Tulsa in Mobile.

The International Bowl has the right idea... if you're going to be a post-New Year's non-BCS bowl, play the game on a Saturday, so everyone can get in and out without having to burn a bunch of days off work at the start of the year. And before students go back to school.