Economics of Moving Up - Not So Good

[PlayerRep]

From a NY Times article linked below:

"“The reality is that football schools who move up a division almost always lose even more money,” said Daniel Fulks, an accounting professor at Transylvania University who has spent the last 15 years as a research consultant for the N.C.A.A.

“There’s not much defense of the economics in the short term or the long term."

"“What any school moving up in football should ask itself is this: what are the real costs of the benefits?” Cowen [president of Tulane] said. “You will get more visibility and exposure, and at first, that seems like a very good investment. The problem is that once you wade in for keeps at the F.B.S. level, you face facility improvements, escalating coaching salaries, added staff and more athletic scholarships."

“The cost curve is extremely steep, and unless you’re in a power conference, the revenue is flat.”

http://www.nytimes.com/2012/12/30/sports/ncaafootball/universities-chase-big-time-glory-in-fbs.html?pagewanted=all&_r=0" onclick="window.open(this.href);return false;

 

[PlayerRep]

UMass' experience with moving up, so far:

In the last game of the season, there were only 6,385 fans in Gillette stadium that is 100 miles from campus and seats 68,756 as UMass lost, 42-21, to Central Michigan. UMass averaged 14,000 per home game when still in FCS.

Finished season 0-5 at "home".

UMass finished the season 1-11 over all and was outscored by opponents, 482-152.

"On Dec. 11, the committee delivered an interim report that maintained that UMass was now spending $8.2 million on football annually, including debt payments on a $34.5 million facility improvement. That total, the report said, is significantly higher than anticipated and more than twice what UMass spent on football before the F.B.S. transition."

"There was enough unease among the UMass faculty that the faculty senate created a 18-member ad hoc committee charged with overseeing the move to F.B.S. football.

The report led to a spirited debate at a faculty senate meeting, where some faculty called for UMass to go back to F.C.S. football or dissolve the program entirely in light of recent studies linking football players and brain trauma.

“We need to realize now that the move to F.B.S. football was a mistake, and we need to stop throwing good money after bad,” said Max Page, an architecture professor and a chairman of the faculty senate ad hoc committee. “There is now a large group of people on campus who think we shouldn’t go any further and further down the rabbit hole.”

"Buffalo moved up to what was then Division I-A in 1999 and immediately struggled, which is customary. But 13 years later, Buffalo still has had only one winning season, and that was four years ago. In the last 10 seasons, Buffalo has compiled a 33-87 record; in five seasons, it has won two games at most."

The article also mentions some situations that are more positive than these two examples.

http://www.nytimes.com/2012/12/30/sports/ncaafootball/universities-chase-big-time-glory-in-fbs.html?pagewanted=all&_r=0" onclick="window.open(this.href);return false;

 

[PlayerRep]

"But overall, the difference between FCS and FBS is a matter of degree: much higher revenues, but also more expenses and, in many cases, much higher losses requiring the university to cover the difference."

"The problem is there's a wide range around the median (the program whose results are precisely in the middle), and nearly half of FBS programs lose money ($2.9 million on average). It isn't easy for a new FBS school to reach even the median level."

""The majority of (transitioning) schools are going to lose more money," Fulks said. "They'll have fewer home games, they'll have to travel more. If they've been winning in FCS, they'll probably be losing at FBS at least for a while. At most institutions, it's going to cost them, and it's going to cost them on a long-term basis."

"There are other costs that don't factor into the NCAA's direct accounting of football programs. FBS membership often requires a new stadium, to generate revenue to fund the expanded program, and to meet the NCAA's 15,000-per-game attendance requirement for FBS schools...."

"FBS membership generally increases costs for other sports, too. Under NCAA rules, FBS schools must field at least 16 varsity teams and spend $4 million on grants for student athletes. Since football has no female equivalent, offering the maximum 85 FBS football scholarships can force schools to add women's teams and scholarships to meet Title IX balance requirements."

http://bigstory.ap.org/article/economics-primer-fbs-football" onclick="window.open(this.href);return false;

 

[getgrizzy]

in our case going f.b.s. is like asking out a supermodel. you can't afford it and she's not interested, but she's polite enough not to laugh at you, which makes you think you have a chance so you keep wasting your time fantasizing about it.

 

[PlayerRep]

More UMass:

"Subpar ticket sales have contributed to a $715,000 cost overrun, increasing the budget for the football program’s inaugural season in the Mid-American Athletic Conference to more than $7.1 million — up from $5.4 million in 2011."

"Some cited a recent study that put the program’s total cost this year at $8.2 million, including a debt payment for $34 million in improvements to the campus stadium."

"Students and taxpayers will fund about $5 million of the $7.1 million budget through institutional support, including student fees and direct public subsidies."

http://www.bostonglobe.com/sports/2012/12/12/umass-football-plagued-attendance-problem/g7gKSRY6HhclPTsOgc9tpM/story.html" onclick="window.open(this.href);return false;

 

[PlayerRep]

Here's the link to the Missoulian article discussing UM's feasibility study in 2011.

$4.7 million of additional annual costs, plus $30.6 million for improvements to facilities.

http://missoulian.com/college/griz/university-of-montana-athletics-study-move-to-fbs-would-cost/article_b87e6958-5778-11e0-9bd2-001cc4c002e0.html" onclick="window.open(this.href);return false;

 

[billings_poke]

http://www.cbssports.com/collegefootball/blog/eye-on-college-football/21989105/sun-belt-commish-karl-benson-western-kentuckys-exit-not-a-surprise" onclick="window.open(this.href);return false;

 

[MrTitleist]

UMass didn't make the transition intelligently though.. no on-campus stadium, actually, not even close to campus. They're probably renting Gillette Stadium.. and doing that is playing in the backyard of Boston College. Apples to oranges comparison.. until UMass gets a stadium on campus they will suffer.

 

[EverettGriz]

And yet, no team has ever moved down. Huh.

 

[billings_poke]

UMass didn't make the transition intelligently though.. no on-campus stadium, actually, not even close to campus. They're probably renting Gillette Stadium.. and doing that is playing in the backyard of Boston College. Apples to oranges comparison.. until UMass gets a stadium on campus they will suffer.

however the best way to make your point is to pick worst case scenario as an example. Legal 101

 

[Grizzlies1982]

And yet, no team has ever moved down. Huh.

Human nature. People never like to admit they were wrong. Especially when it involved a financial loss.
Further there is the other "pride" factor. Who wants to give up on FBS when you're packing 6,400 fans into a 68,000 fan stadium. Think of all that comfortable room each fan enjoys. Nobody is asking you to slide over to make space for them.
:ugeek:

 

[Grizzlies1982]

UMass didn't make the transition intelligently though.. no on-campus stadium, actually, not even close to campus. They're probably renting Gillette Stadium.. and doing that is playing in the backyard of Boston College. Apples to oranges comparison.. until UMass gets a stadium on campus they will suffer.

however the best way to make your point is to pick worst case scenario as an example. Legal 101

BlgsPoke,
You're right, a fair comparison should involve more than just UMass and/or Idaho. Though on the other hand the list of schools which made the jump is fairly long. To date there is no "best case" scenario except for Boise State. Among those who moved up only a few have enjoyed intermittent and modest success on the field. I'm not sure if any have enjoyed financial success after their jump.

Can anyone say that Marshall, Western Kentucky, or Troy (State) have benefited from moving up? Each was a former FCS National Champion or contender who have slipped into FBS oblivion. No doubt there have been some intangible benefits to these schools. However they've not gained financially. Nor have they re-established their programs as contenders. In the end there is no additional prestige by playing in FBS. Exposure and prestige are earned through success regardless of the level you compete in.

So I would ask you, among the dozens of former FCS schools which move on; How many have even broke even? How many have found success on the field? How many have enhanced the prestige of their school through entering FBS? Not being confrontational, just asking if anyone can actually cite former FCS schools which achieved these three goals after "moving up"? Those that failed are numerous, I'm having a hard time finding those that excelled.
:ugeek:

 

[EverettGriz]

And yet, no team has ever moved down. Huh.

Human nature. People never like to admit they were wrong. Especially when it involved a financial loss.
Further there is the other "pride" factor. Who wants to give up on FBS when you're packing 6,400 fans into a 68,000 fan stadium. Think of all that comfortable room each fan enjoys. Nobody is asking you to slide over to make space for them.
:ugeek:

Sorry, but there's more to it than that. Pride isn't capable of writing a check to pay the bills. And if the costs truly aren't covered at the FBS level, isn't it reasonable to assume -- given the difficult economic times faced by all states' legislatures -- that someone would have made the decision to cut those expenses??

The bottom line is that the bottom line is okay for those athletic departments.

But even assuming for the moment that the argument that it doesn't make financial sense to go (or stay) FBS is valid, clearly -- since many move up and no one moves down -- there are noneconomic benefits which obviously out weigh the additional costs.

 

[marceagfan5]

Wasn't this UMASS's first season in the FBS. They have to be given 4-5 years before you can make a decision on their jump. Plus they are playing in an off campus stadium, this situation doesn't compare to others.

If so many programs are losing $ why do they continue to have their programs and keep them in the FBS? It must not be that bad.

Look at the FCS, its a killer when it comes to $, pretty sure MSU and UM are the only Big Sky schools to make a profit in football this year, maybe UND?

 

[billings_poke]

UMass didn't make the transition intelligently though.. no on-campus stadium, actually, not even close to campus. They're probably renting Gillette Stadium.. and doing that is playing in the backyard of Boston College. Apples to oranges comparison.. until UMass gets a stadium on campus they will suffer.

however the best way to make your point is to pick worst case scenario as an example. Legal 101

BlgsPoke,
You're right, a fair comparison should involve more than just UMass and/or Idaho. Though on the other hand the list of schools which made the jump is fairly long. To date there is no "best case" scenario except for Boise State. Among those who moved up only a few have enjoyed intermittent and modest success on the field. I'm not sure if any have enjoyed financial success after their jump.

Can anyone say that Marshall, Western Kentucky, or Troy (State) have benefited from moving up? Each was a former FCS National Champion or contender who have slipped into FBS oblivion. No doubt there have been some intangible benefits to these schools. However they've not gained financially. Nor have they re-established their programs as contenders. In the end there is no additional prestige by playing in FBS. Exposure and prestige are earned through success regardless of the level you compete in.

So I would ask you, among the dozens of former FCS schools which move on; How many have even broke even? How many have found success on the field? How many have enhanced the prestige of their school through entering FBS? Not being confrontational, just asking if anyone can actually cite former FCS schools which achieved these three goals after "moving up"? Those that failed are numerous, I'm having a hard time finding those that excelled.
:ugeek:

I have no clue if UM should move up or not and you have to look at each school in a unique way. What conference they are going to, Facilities, Budget of the schools and the members of the conference, SO many variable here. UM did the study they should know. Going to the WAC would probably not have been smart but if UM turned down a MWC invite I also think that was not smart. New Playoff money also injects well over $1 million per team in each conference so that really helps the finances of incoming teams. That money was not there before to help. Just have to think it is crazy so many are jumping in right now and there must be a reason behind it.

This is also more then just athletics though and University image and exposure also come into play. many consider TV games as the best way to advertise the University and try to attract out of state students. Losing some money in athletics while helping the image and exposure of the university is a complex formula each school measures in a different way. Cost of advertising? Wyo could save a lot of money moving into the Big Sky but would lose huge Alumni support and exposure to where the state thinks it is better to have a loss in the athletic department to avoid losses elsewhere is the thought. For example Boise academic donors and support is way higher now then it ever could have been in the Big SKy. Same is probably true for Nevada.

In the west these come to mind:

Boise -- Definately Successful

Nevada -- Mixed success. NFL QB produced and have been nationally ranked a couple of years. but some bad years to. Very competitive in the MWC and is getting games at home against BCS schools so they are able to generate attractive home schedules. Struggling financially but would also struggle in FCS

Idaho -- Total failure to this point however incredibly weak facilities and budget.

Texas State -- who knows but they have the facilities, budget, and location to pull it off

UTSA -- were they FCS? great attendance of 40K a game and generating buzz in San Antonio but not much field success yet.

Eastern is very different then western scenarios just due to number of teams, etc

 

[MrTitleist]

Can anyone say that Marshall, Western Kentucky, or Troy (State) have benefited from moving up? Each was a former FCS National Champion or contender who have slipped into FBS oblivion. No doubt there have been some intangible benefits to these schools. However they've not gained financially. Nor have they re-established their programs as contenders. In the end there is no additional prestige by playing in FBS. Exposure and prestige are earned through success regardless of the level you compete in.

Western Kentucky scheduled a press conference this week to accept an invite to Conference USA. They must be desirable enough to be poached by another FBS conference. :twocents:

 

[kemajic]

Just amazing how defensive the status quo group can get when threatened by interest in UM finding a better deal than the BSC. To the point cooking the books in much the same way the global warmers cook scientific data.

 

[UMGriz75]

I'm the kind of guy that can enjoy C 6 and 8 man football out on a prairie field somewhere, "hey, Billie's sick, can his sister play?" It's the kids out there doing the sport and maybe it isn't quite up to the high drama and legendary football level of Ronald Reagan and George Gipp, but to the kids it is ...

There's a lot of history in the Big Sky Conference; basically two schools in the middle of nowhere trying to put together a small league of similar schools to play some sports. And it worked pretty well. Teams ebb and flow, but you know, if I wanted to see Johnny Unitas play pro ball, I'd woulda' got a ticket .... I enjoy the history of the teams, the rivalries, and yes, there are going to be ups & downs.

Somebody's on top for while and gets the "itch," and then something happens and it's somebody else's turn. Don't wreck a good thing.

In the immortal words of Lt. Frank Drebin, "to some, it may be just a hill of beans, but ... this is our hill and these are our beans."

http://six-eight-eleven.blogspot.com/" onclick="window.open(this.href);return false;

 

[indian-outlaw]

This discussion about teams moving up to fbs from fcs and the angst that we are being left behind is pretty ridiculous to me. The FCS is no doubt going to survive a few defections. I’ve been around griz football long enough to remember the dii days and when we became a member of the fcs or 1aa. The truth is that we were probably in a stronger conference when we were dii in the 70’s than we are today in the fcs.

The fcs or 1aa has had a steady stream of defections starting in the late 80’s and griz fans hate to admit it but when Idaho State, Boise State and Montana State won their championships in the eighties the division was much stronger with more teams. Think of the teams that were around in those days like Louisiana Tech, Western Kentucky, Central Michigan, Arkansas State, Troy State, Idaho, Louisiana Monroe, Nevada, Boise State, Marshal, North Texas, Middle Tennessee, Northern Illinois, Eastern Michigan, Umass, Uconn, and Akron to name some. They have all defected to the FBS ranks and strong teams like Georgia Southern, James Madison, Eastern Washington, Youngstown State, Delaware, Villanova and the Griz all stepped up their game and the division remained strong. The division has added some good teams since those days with teams like NDSU, North Dakota, South Dakota, South Dakota State, Sacramento State, UC Davis, Portland State and it is now time for those teams to step up like the other teams did in the past. The loss of App State, Georgia Southern and James Madison will just leave room for other teams to show their stuff. Certainly the division will be weakened but not significantly.

The division will live on and it is where we belong. We tried competing with the upper echelon of college football in 1939-1962 and it was a disaster. We went a combined 67-131-2. Also keep in mind that during this stretch we still played roughly a third of our games against small colleges or NAIA completion which inflated our wins. We played the cats nearly every year during that stretch while they were NAIA and went 12-6 against them. I am not sure that’s a statistic I would want to brag about.

The last 25 years have been a blast but let’s not make it into something that it wasn’t. We are not going to be competing with the Washington Huskies anytime soon on the football field. In fact even the Colorados , Utahs and New Mexicos of college football will always be a stretch for us in Montana.

Keep it real with the BSC and enjoy the ride. Got it kids?

 

[GrizFBDad]

I believe that a move to FBS should be given serious consideration if the Griz were invited to join the MWC. Sun Belt, not so much. The fan base and stadium are two critical pieces that are already in place. However, the long term financial success of the UM athletic program must be proven to be feasible. It's clear that the FCS as we know it is dissolving quickly. NDSU and UNI could be the next quality programs to leave the FCS. I'd hate to see the Griz sit back and miss an opportunity. Even president Engstrom has acknowledged athletic programs are an important part of the fabric that is UM. Great football programs bring in students and money to fund university programs. I personally love a true championship format versus bowl games. But how much fun will it be if all the top FCS programs move up to FBS? If Boise State could successfully do it, Montana can do it too!