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Non-profits Often Behave Like For-Profits

2007 November 30
by Phil Miller

This morning’s St. Louis Post-Dispatch has an article on the Southlake (Tx) Carroll Dragons football program. Southlake, a suburb of Fort Worth, is a wealthy enclave whose residents have a high willingness to pay for the local high school football program. What the author, Tim O’Neill, describes could as well describe many major college programs and professional programs. A couple of excerpts:

The domination on the field of play:

Call it Texas football pageantry on afterburner, fired by championships. Since 1988, the school has won eight state football crowns, including three of the last four at the big-school level. Over the past five years, the Dragons are 72-2.

There is the use of two part tariffs:

The concrete grandstand includes 1,621 reserved seats for season-ticket holders, who buy $90 three-year seat licenses to ward off the long waiting list.

There are the first-rate facilities:

Having great facilities certainly helps. This suburb of airline pilots, business executives and Dallas Cowboy football players living in $500,000-plus homes provides the Dragons with three outdoor practice fields and an indoor center that covers a 60-yard-long turf field.

There is revenue sharing:

The Carroll Independent School District is among the Texas districts that pay into a “Robin Hood” fund for less-fortunate schools. This year it will send $11 million.

After having studied various facets of sports economics for the past 13 years or so, it still interests me how similar the motivations are for for-profit and not-for-profit sports programs. Of course being not-for-profit doesn’t really mean that you can’t have profits as your objective. All having this status does is restrict how profits can be distributed.

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