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Fame and Fortune for Florida International?

The recent Florida International/University of Miami football debacle is a perfect opportunity to examine the lunacy that often creeps into big-time collegiate sports. With nearly 38,000 students, FIU is larger than any other university in Florida including its better known rivals Florida State, University of Florida, and the University of Miami. As the university has grown, its administration has increasingly turned to athletics to bring additional publicity to the school. In 1987, the school leapt from Division II to Division I status, and in 2002 the school added football for the first time in an attempt to grab the fame and fortune that would surely come from having a big-time football program. In fact, neither fame nor fortune has flowed from the addition of football.

Of course, college football is a zero-sum game and 118 other Division 1-A programs are also committed to having a top-tier program as well. No matter how much each school spends on scholarships, coaching, recruiting, and training facilities, by definition only 25 teams can be ranked in the top 25. For this reason, it’s not surprising that FIU has, so far, fallen short of its stated goal of becoming a football powerhouse and the attendant glory that comes along with having such a lofty program. Following its lopsided loss to Miami last Saturday, FIU now has an all-time record of 15-35, the lowest lifetime win percentage of any school playing Division 1-A football this year. Having one of the worst football programs in college football is hardly the type of publicity that the school was looking for.

Of course, the only time FIU has received any national media attention due to its football program was the result of the ugly brawl that interrupted their game against cross-town neighbor Miami last weekend. This prolonged fight involved over 100 players, resulted in the expulsion of 13 players (eight from FIU), and later led the schools to suspend 30 players (18 for FIU) for at least one game. Those boosters who claim that sports teams and events can bring "invaluable exposure" to schools or host cities always ignore the possibility that the attention a sporting event or team might bring need not be positive.

If it can be believed, the fortune accruing to FIU as a result of adding football is even worse than the fame (or infamy, as it were). While the football program cost FIU $4.4 million to run in 2004-2005, the school sold a mere $112 thousand in tickets and garnered another $90 thousand in media rights, conference and NCAA distributions, and advertising and sponsorship revenues. In fact, the biggest money-maker in 2004-05 for the FIU program was $205 thousand in appearance guarantees. Appearance guarantees are payments made by big, successful programs like Miami or Florida State in exchange for FIU agreeing to play them at the Hurricanes’ or Seminoles’ home stadium. When two large programs play against one another, Florida State vs. Florida, for example, guarantee payments are not made, but instead the programs agree to play one game at each team’s stadium in successive years. When a guarantee payment is made, Miami or Florida State is under no obligation to play future game at FIU’s stadium. From an economic point of view, guarantees make perfect sense. Miami needs someone to play, and the revenues generated by a Miami home game are well in excess of the revenues that FIU could expect from hosting Miami. From a sports competition point of view, however, FIU is essentially playing the Washington Generals to Miami’s Globetrotters in exchange for 30 pieces of silver.

So, it looks like the football program lost about $4 million in 2004-2005. No so, according to FIU. In fact, in their disclosure to the NCAA, they claimed a $600K football profit. First of all $900K in donations to the university were attributed to the football program. Certainly, if the football team encourages giving that would not have occurred in the absence of the team, then this is a perfectly acceptable accounting practice. However, if a big donor decides to dedicate their planned $500K gift to FIU to the football program, this is a $500K donation that is not available for new classrooms, or the library, or endowed professorships, or the general fund. The list goes on.

The biggest line-item for the football team, however, is $3.7 million of "Student Fees." Essentially, students through tuition and special fees subsidize about 75% of the costs of the football team to the tune of about $100 per student, adding to the already high cost of higher education. Again, this is $3.7 million of student funds that could be directed elsewhere in the university or simply used to reduce the average student’s financial burden. As if the current financial costs are not enough, FIU has announced plans to undergo a $34 million stadium renovation to include the construction of 14 luxury boxes and 1,400 club seats. It’s not at all clear that this new stadium will be able to generate the roughly $3 million in additional revenues required to pay for the interest and amortization of this new facility.

In the ultimate indignity, in January 2003, FIU announced that due to budget difficulties brought about entirely because of the $4 million in annual losses due to the new football team, the university was cutting men’s soccer, the most successful team in the institution’s history. The men’s soccer program had won two national championships in the 1980s when FIU was still in Division II, and had lost in the NCAA Division I national title game in 1996 to St. John’s. The team is the only sports program in the school’s history to win a national title, and it has produced numerous professional players including Steve Ralston, a perennial Major League Soccer All-Star selection. In effect, FIU traded a highly successful men’s soccer program for a poor football team that loses roughly 4 times as much money as the soccer team did while bringing national disgrace to the university due to its actions on the field.

Big-time college athletics is an lure that many schools find difficult to resist. The reality is, however, that even revenue sports such as football and men’s basketball are money losers for most programs. Certainly FIU must be rethinking their decision to step onto the football field.

Addendum: Later in 2003, FIU reinstated the men’s soccer team on a year-to-year basis due to pressure from current and former players and alumnae. In addition, the Indianapolis Star has a database of NCAA financial reports that is a gold mine of interesting information regarding college finances. It's the best source I have ever seen regarding school finances.