Over the years, we have debated how much Rice spends on athletics. I think the last figure ai read was that we spend about $ 10 million a year subsidizing the programs.

Right now, Louisiana is facing a budget crisis at all state supported schools. Most of them spend significant parts of their budgets on athletics, arguing that the programs attract enrollment. But only LSU, among 6 other schools nationally, makes money on athletics. The New Orleans Advocate has done a special report on this issue:

http://www.theneworleansadvocate.com/new...udget-cuts

Obviously, Rice is in a different position than these state schools. But the value judgment about athletics does affect our spending levels.

Most people spend more money on cars and electronics than they do on food.

Just think how much more you could be spending on feeding yourself if you weren't making car payments and paying for cable and a cell phone!

And only LSU gets much publicity from athletics and it is the only one in Louisiana making money from it. I think a nationwide shakeout is coming to schools that are lower than P5. It might be hard for an administration to drop it but is better than cutting academics.

(02-01-2016 11:05 AM)NolaOwl Wrote:  Over the years, we have debated how much Rice spends on athletics. I think the last figure ai read was that we spend about $ 10 million a year subsidizing the programs.

Right now, Louisiana is facing a budget crisis at all state supported schools. Most of them spend significant parts of their budgets on athletics, arguing that the programs attract enrollment. But only LSU, among 6 other schools nationally, makes money on athletics. The New Orleans Advocate has done a special report on this issue:

http://www.theneworleansadvocate.com/new...udget-cuts

Obviously, Rice is in a different position than these state schools. But the value judgment about athletics does affect our spending levels.

A few D1 schools have revenue-positive athletic programs. The majority of D1 programs, and almost all programs at levels lower than that, do not make money. Only at the D1 level has making money somehow become an expectation, but almost any school, including your local elementary school, could drop athletics to increase spending on academics. Apparently an educational institution's mission is more complicated than spending every dime on academics, since that isn't the norm.

Big time D1 athletic departments are already completely absurd business models (or, as many athletic departments like to be called, "charitable organizations") that are on the verge of outspending even the most obscene amount of tax-deductible revenue inflows. The author of Billion Dollar Ball (a book about the explosion of college football as an industry) finds it interesting that Nick Saban is paid $7mm per year to oversee a football program that has expenses of $40mm per year and brings in revenues of $90mm, while the CEO of the American Red Cross, an organization which brings in revenues of $3 billion dollars per year and is one of the leading American organizations in charge of blood services and disaster response, is paid $500K. From a business standpoint, does it make sense to pay Saban more money than many Fortune 500 CEOs, when he is effectively the CEO of a measly ~$100mm business?

He's worth whatever someone or some school is willing to pay him. You can make the same argument about actors and entertainers. Their pay is obscene but someone is willing to shell out those bucks.

I'd argue what's it worth to Rice or any school to improve its national exposure through successful D1 athletics?

(02-01-2016 02:03 PM)westsidewolf1989 Wrote:  Big time D1 athletic departments are already completely absurd business models (or, as many athletic departments like to be called, "charitable organizations") that are on the verge of outspending even the most obscene amount of tax-deductible revenue inflows. The author of Billion Dollar Ball (a book about the explosion of college football as an industry) finds it interesting that Nick Saban is paid $7mm per year to oversee a football program that has expenses of $40mm per year and brings in revenues of $90mm, while the CEO of the American Red Cross, an organization which brings in revenues of $3 billion dollars per year and is one of the leading American organizations in charge of blood services and disaster response, is paid $500K. From a business standpoint, does it make sense to pay Saban more money than many Fortune 500 CEOs, when he is effectively the CEO of a measly ~$100mm business?

I don't know. Going rate for a decent P5 coach is +/- $1 million. Is Saban incrementally generating $6 million in direct revenue plus intangible benefits? I think it's possible that he is.

(02-01-2016 02:14 PM)Tomball Owl Wrote:  He's worth whatever someone or some school is willing to pay him. You can make the same argument about actors and entertainers. Their pay is obscene but someone is willing to shell out those bucks.

I'd argue what's it worth to Rice or any school to improve its national exposure through successful D1 athletics?

That's the $64,000 question. It appears our BoT doesn't think it's worth much. I think they have been so wrong for fifty years.

In 1930 Babe Ruth was paid more than Herbert Hoover. Babe said he had a better season than Hoover did. It might make sense for Alabama to pay that much since they make money on football but that is not true for most of the other schools that have to heavily subsidize athletics and still not get much marketing value for it since they are ignored in a minor conference.

(02-01-2016 02:03 PM)westsidewolf1989 Wrote:  Big time D1 athletic departments are already completely absurd business models (or, as many athletic departments like to be called, "charitable organizations") that are on the verge of outspending even the most obscene amount of tax-deductible revenue inflows. The author of Billion Dollar Ball (a book about the explosion of college football as an industry) finds it interesting that Nick Saban is paid $7mm per year to oversee a football program that has expenses of $40mm per year and brings in revenues of $90mm, while the CEO of the American Red Cross, an organization which brings in revenues of $3 billion dollars per year and is one of the leading American organizations in charge of blood services and disaster response, is paid $500K. From a business standpoint, does it make sense to pay Saban more money than many Fortune 500 CEOs, when he is effectively the CEO of a measly ~$100mm business?

(02-01-2016 03:20 PM)75src Wrote:  In 1930 Babe Ruth was paid more than Herbert Hoover. Babe said he had a better season than Hoover did. It might make sense for Alabama to pay that much since they make money on football but that is not true for most of the other schools that have to heavily subsidize athletics and still not get much marketing value for it since they are ignored in a minor conference.

(02-01-2016 02:03 PM)westsidewolf1989 Wrote:  Big time D1 athletic departments are already completely absurd business models (or, as many athletic departments like to be called, "charitable organizations") that are on the verge of outspending even the most obscene amount of tax-deductible revenue inflows. The author of Billion Dollar Ball (a book about the explosion of college football as an industry) finds it interesting that Nick Saban is paid $7mm per year to oversee a football program that has expenses of $40mm per year and brings in revenues of $90mm, while the CEO of the American Red Cross, an organization which brings in revenues of $3 billion dollars per year and is one of the leading American organizations in charge of blood services and disaster response, is paid $500K. From a business standpoint, does it make sense to pay Saban more money than many Fortune 500 CEOs, when he is effectively the CEO of a measly ~$100mm business?

With the exception of a few dozen P5 schools, all athletics is subsidized. Worth it? The issue obviously isn't that simple, given the thousands of schools that have athletic programs.

(02-01-2016 03:03 PM)ranfin Wrote:  

(02-01-2016 02:14 PM)Tomball Owl Wrote:  He's worth whatever someone or some school is willing to pay him. You can make the same argument about actors and entertainers. Their pay is obscene but someone is willing to shell out those bucks.

I'd argue what's it worth to Rice or any school to improve its national exposure through successful D1 athletics?

That's the $64,000 question. It appears our BoT doesn't think it's worth much. I think they have been so wrong for fifty years.

I agree.

All the BoT need to do is look at the increase in applications after the 2003 NCAA baseball championship. I'm not sure how Rice spends its advertising money, but I doubt you can buy better national advertising than that championship did.

If you do this analysis strictly on a cost/revenue basis, Title IX is toast.

It is good that people question the value. It is even better than every now and then, a money losing program gets whacked. Without this we complacency sets in and people are happy to be in D1 for life, even if it means doing nothing more than barely existing.

From Lion King

Quote:Some say eat or be eaten
Some say live and let live
But all are agreed as they join the stampede
You should never take more than you give