Monday, June 23, 2008

Is the NBA - NCAA market division in jeopardy? 

Basketball is the one uniquely American game. (Our baseball and football were adaptations of English games). It would be ironic if increasing appreciation of basketball in Europe chips away at the cartelized, market division arrangement that works so well for the NBA and NCAA. The things is, Europe pays more than the NCAA, and they don't have any problem with luring teenagers to emigrate for the purpose of sport. William Rhoden reports:
Brandon Jennings smiled Sunday afternoon when someone suggested that he might be considered a trendsetter.

If he makes good on a threat to go from high school to professional basketball in Europe, Jennings will become the first high school player to spurn college to go overseas and play professionally.

Trendsetting.

This is the latest — and most brilliant — plan yet to combat the three-tiered maneuver by the N.C.A.A., the N.B.A. and the players union to prevent talented high school players from going directly to the N.B.A.

The N.B.A. instituted an age limit of 19, and required that a player be at least a year removed from high school, as part of its collective bargaining agreement with the union. The N.C.A.A. didn’t protest, and why would it?

Under this arrangement, the great high school players have little choice but to do time in college for a season at a high-profile college. Kevin Love wound up at U.C.L.A., Michael Beasley at Kansas State, Derrick Rose at Memphis and O. J. Mayo at Southern California. All entered this week’s N.B.A. draft after one season in college.

Jennings, an 18-year-old from Los Angeles who played the last two seasons at Oak Hill Academy in Virginia, signed a letter of intent to play at Arizona.

Jennings was pushed into action by the N.C.A.A. After doing poorly on his first standardized test, he did well on the second, but because of the difference in the scores, the testing service asked him to take the test a third time. He relented, but at that point Jennings decided that he was through with the N.C.A.A. Why jump through hoops to go to Arizona, endure the charade of an academic regimen, then switch into N.B.A. mode the instant the season is over?
A little European experience might be more beneficial than sitting in Astronomy 101 for these cats, no?

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Tuesday, May 13, 2008

Arizona State Eliminates Three Sports 

A quick note: Arizona State has eliminated three sports.

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Monday, March 24, 2008

Eight per cent 

The latest estimate of the applications bump from winning the national title in college football or (men's) basketball is 8 per cent. A top twenty-type finish is worth 2 to 3 per cent. The systematic analysis is in a paper by Devin Pope and Jaren Pope, forthcoming in the Southern Economic Journal.

I always find the anecdotal cases in this subject area informative (I last blogged about this with regard to Rutgers football). This is from the AP story on the paper by Dena Potter, "Schools Score Big When Sports Teams Win:"
For George Mason University, just outside Washington, the positive effects of its unlikely Final Four appearance two years ago were wide-reaching.

In addition to increases in fundraising, attendance at games and other benefits, freshman applications increased 22 percent the year after the team made its magical run. The percentage of out-of-state freshmen jumped from 17 percent to 25 percent, and admissions inquiries rose 350 percent, said Robert Baker, director of George Mason's Center for Sport Management who conducted a study called "The Business of Being Cinderella."

Baker also found that SAT scores went up by 25 points in the freshman class, and retention rates as freshmen moved into their sophomore year increased more than 2 percentage points.

"You will certainly have critics who say it would have happened anyway, but I think the general consensus is that it happened faster because of this and that it allowed this university to reach new heights more quickly," Baker said.

Gonzaga was virtually unknown in most parts of the country until it broke into the national tournament in the mid-'90s. The Zags have been in the tournament every year since 1999, and during that time enrollment has grown from just over 4,500 to nearly 7,000, said Dale Goodwin, a university spokesman.

Inquiries have jumped from about 20,000 per year to 50,000, and the Spokane, Wash., school attracts students from eastern states where it doesn't recruit.

"There's no other way they would have heard about Gonzaga," Goodwin said.

The study found that private schools saw even larger increases than public universities.
Potter wrongly states that the evidence was "mostly anecdotal" prior to Pope and Pope, who make no such claim, but that's par for the course I guess. Potter is right to emphasize that the applications boost is temporary (absent any additional investment to capitalize on the increased awareness). Once on the NCAA treadmill, always on the treadmill. Unless you are Chicago.

For the record, here is the abstract from Pope and Pope's paper:
Many analysts question the role of college sports within higher education. However, one hypothesized benefit of high-profile college sports is that they can influence college choice decisions. Empirical studies that have analyzed the impact of a school’s athletic success on the quantity of student applications and the average quality of those students have produced mixed results. This study uses two unique datasets to shed additional light on the indirect benefits that sports success provides to NCAA Division I schools. Key findings include: (i) football and basketball success significantly increase the quantity of applications to a school, with estimates ranging from 2-8% for the top 20 football schools and the top 16 basketball schools each year; (ii) the extra applications received are composed of both low and high SAT scoring students, thus providing potential for schools to improve their admission outcomes, and (iii) schools exploit these increases in applications by increasing both the number and the quality of incoming students.
Update: The link to the Pope and Pope paper has been changed to a more recent version.

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Sunday, March 02, 2008

Ladies Hoops & Bucks 

From Greg Auman in the St. Petersburg Times, where the Women's Final Four will take place next month:
Much seems rosy in the women's game until you get to the bottom line for the 2005-06 season: a staggering $169-million in losses. That total is for the 333 schools in NCAA Division I as reported to the U.S. Department of Education. The figure is probably conservative because 80 schools reported their expenses matched their revenues, to the last dollar.

Still, proponents say it's a worthwhile investment in giving women's basketball a chance to catch up to the older and more established men's game.

"The emphasis has been placed on putting more money, more energy, more manpower on women's basketball," said Candice Storey, senior women's administrator at Vanderbilt, which lost more money on women's basketball than any school in 2005-06. "It's just a slow process getting it to translate to real dollars."

At the sport's highest level, in the 11 largest conferences, the losses are more than $1-million per school, with 18 schools losing more than $2-million, according to the DOE. Men's basketball, by comparison, generated a $240-million profit in the same year, largely on two things the women still lack: a lucrative TV package and strong attendance. The women's game is still working to build the national audience and fanatical interest the men have enjoyed for decades.
The bottom line for women's hoops should not be on revenue. The fact is that just about all intercollegiate sports lose money. That men's football and basketball help pay the bills of the other programs at big time sports schools is nice, thanks very much.

Still, there is the sense that women's hoops has the potential to generate more revenue. Connecticut coach Geno Auriemma thinks his team needs to be taken down a peg for that to happen:
If powerhouses such as Connecticut are the rare economic model, the success story that all women's programs hope to be, they also may be part of the difficulty schools have in getting there.

Auriemma told the Times before this season that the parity coming to women's basketball may be something that helps the sport become profitable. As much as dynasties such as Tennessee and the Huskies have given exposure to their game, Auriemma said the sport needs the any-given-Sunday chaos of the NFL, where huge upsets can come on any field, even at the Super Bowl.

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Tuesday, January 08, 2008

UGA Wants a Playoff 

The Georgia Bulldogs were the hottest team in college football at the end of the season this year, and will finish second in the AP poll behind LSU. Perhaps they could have done better in a playoff system. Certainly, the BCS process led to a series of weird match-ups in the bowls, with teams like Missouri, Southern Cal, and Georgia -- all strong teams with great resumes -- paired against relatively weak opponents. Things would have been much different in a playoff system, probably to Georgia's benefit. Which may explain this open letter from Georgia President Michael Adams to NCAA President Myles Brand:
In recent years ... I have become increasingly troubled about the commercial influence of how the college football season is played out, particularly with the post season bowls. The television networks ... have grown too powerful in deciding who plays and when they play, and indeed, whom they hire to coach. The BCS has become a beauty contest largely stage-managed by the networks....

Colleges need to regain ownership of their football teams.... reorienting the national football championship is an important step in managing a model that benefits students, institutions, and our constituents.
Adams is proposing an NCAA-managed 8-team tournament that begins with the New Years Day bowls, to be accompanied by a return to an 11 game season. Adams is the chair of the NCAA executive committee, so this proposal - and the money that will flow from it - carries some weight. Here is Adams' letter to Brand, and a similar statement of the issue.

Adams' take changes my view of this issue - (I'm an advocate of league championships as being the focal point rather than playoffs, but the reality is that we will have some form of playoff, so I've been baying at the moon...). Moreover, the salaries paid to the bowl directors -- $490,000 for the Outback Bowl!!! --- suggest that the colleges are leaving money on the table in a system which is fraught with conflicting interests. While history provides many episodes that make one skeptical of NCAA coordination, there is clearly scope for improvement on the current setup. Let the negotiations begin!

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Thursday, May 24, 2007

Should Duke Lacrosse Players Get Their Eligibility Back? 

Duke has made a request to the NCAA that its men's lacrosse players - who had their season cut short last year by the rape allegations - get that year of eligibility back.

Duke hopes the NCAA will give back the year its men's lacrosse players lost during last season's now-debunked rape scandal.

The school is asking the NCAA to grant an extra year of eligibility for team members, who played just eight games in 2006 before the university canceled the rest of the season amid rape allegations against three players.

Still - as his team prepares for this weekend's Final Four - coach John Danowski figures the proposal is "a long shot."

The university made the decision to cancel the season in the wake of the allegations, not the NCAA. Unfortunately for the players, Duke must deal with the consequences. If the NCAA decides to give the eligibility back, it sets a precedent that penalties for wrongly cancelling seasons won't be as harsh. It is not as if schools will go willy-nilly in cancelling seasons in the future, but it does make a repeat more possible. Universities should not expect a bailout at the hands of the NCAA.

As heinous as the treatment of the players was, the NCAA has no duty to help bail Duke out.

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Tuesday, April 03, 2007

More on Toeldo 

Proud partisans at the University are "stunned" that a point shaving scandal could happen on their campus. I was surprised too, but for different reasons. The idea that an operator could get $100k down on a Toledo game without the line adjusting or being taken off the board -- one of you betting hounds can check the data on that -- suggests to me that online sportsbooks may have added a lot of liquidity to the point spread market in recent years.

The other interesting news today is that the perpetrators are being chased down on the basis of a tip to the FBI by Las Vegas Sports Consultants. These are the people who make the initial lines for the Vegas sports books. One thing they do is pore over the betting action, seeing which teams are developing a "following." Or something slightly different in the case of point shaving. It is intriguing that Vegas now runs to the FBI rather than a kneecapping hoodlum to keep the market straight these days.

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Sunday, April 01, 2007

Point shaving at the University of Toledo? 

From the Detroit Free Press.
A running back for the University of Toledo Rockets has been charged with recruiting fellow athletes to shave points and fix games on behalf of a Macomb County gambler.

A criminal complaint filed in U.S. District Court in Detroit said the player, Harvey "Scooter" McDougle Jr., 22, a senior, recruited football and basketball players to participate in the scheme spearheaded by a Sterling Heights man identified only as "Gary."

Gary’s recruitment of players allegedly included inviting the athletes to gamble and dine at Greektown Casino in Detroit.

The complaint said one player was offered $10,000 to sit out a football game. Other players received cash, groceries, merchandise and other gifts, the complaint said.

McDougle told the FBI that he received a car, telephone and other things of value from Gary, but insisted that he never changed the way he played to affect the outcome of games.
Toledo? I didn't think the betting market was thick enough for crooks to fool with mid-level programs.

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Sunday, March 11, 2007

NCAA sued (again) 

As a football player at UCLA, Ramogi Huma found there was always more month than money when it came to the reality of daily living.

His scholarship paid for tuition, books, food and housing, but didn't cover toothpaste, travel expenses or phone bills. When "people came peddling credit cards in front of the athletic department," Huma applied and accepted a sports water bottle as a free gift.

He charged what he needed to survive.

"I thought I could get a job in the summers to pay it off, but when I was playing, I wasn't allowed to work because the NCAA didn't allow it," said Huma, who owed $6,000 at 19 percent interest upon his 1998 graduation.

That experience -- and the National Collegiate Athletic Association's suspension of a teammate who accepted groceries when his scholarship money ran out -- led Huma in 2001 to found the Collegiate Athletes Coalition to improve conditions for student athletes.

Now, as the NCAA prepares for its annual "March Madness'' basketball championships, it is locked in a legal battle with the CAC that could change the future of college sports.
That's the opener from Robin Acton and Richard Gazarik's article. It's an important story that will slowly unfold over the next couple of years, so file it for future reference. Rod Fort and Steve Ross are quoted, among others.

The headline reads "NCAA: USW (United Steel Workers) trying to make athletes "paid employees." Well, that's certainly preferred to "unpaid employees."

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Sunday, March 04, 2007

NCAA takeover completed 

There are several interpretations one might make of Joe Drape's front page story in today's New York Times: "Facing N.C.A.A., the Best Defense Is a Legal Team." My take is quite simple: the lawyers are in charge of college athletics.

It's a bit of a shame really. But it's to be expected in a market that is both highly competitive yet cartelized, where the most valuable inputs are up for grabs but unpaid.

Here's the opener from Drape's fine piece:
The black binders contained more than 700 pages and documented the misdeeds of the University of Kansas men’s and women’s basketball and football programs. Among the findings were payments to athletes and academic fraud. The report suggested remedies like self-imposed probation and a reduction in scholarships.

The investigation and the sanctions did not come from the National Collegiate Athletic Association. Instead, they were produced by a private law firm stocked with former N.C.A.A. investigators and hired by Lew Perkins a day after he became the Kansas athletic director in 2003.

Last October, the N.C.A.A. accepted most of the recommended sanctions and agreed not to impose a postseason ban on its teams. For two years of legal work, Kansas paid the law firm, Bond, Schoeneck & King, nearly $480,000. It was nothing, however, compared with the $23 million that the basketball and football programs generate annually.
Actually, the cost comes to about 1% of revenues on an annualized basis. While obviously worth the investment, it's just one illustration of the rent dissipation that is rampant in major college athletics. Drape reports that there are "15 to 20 hearings a year held by the N.C.A.A.’s Committee on Infractions," and law firms specializing in the business of pre-emptive investigation (like Bond, Schoeneck & King) attend every one. And I'd wager that most athletic departments now have a lawyer on staff. That's how the game is played these days.

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