The latest econ professor to squawk about his or her university’s sports program – Colorado State’s Steven Shulman – reminds UD to mention that she thinks we’ll see, in a few years, at some schools, litmus tests for new hires in this field.

Are you an avid fan of football and basketball? Will you sign a pledge attesting to your intention to attend home games into perpetuity, your willingness to cancel class when a match-up will take place within 72 hours of a scheduled course session, your commitment to give C or higher grades to revenue athletes in your classes, and – most important – your promise never to subject the athletic program to economic analysis or talk to news outlets about your economic analysis of the program?

Econ professors are a seriously weak link in the American jock school chain. This blog has covered tons of economists who, with their specialized knowledge, subject their athletics departments to withering critique and then tell everyone about it. Here are some instances of professors, who, like Shulman (‘“Of course it sucks resources out of the academic side of the university,” Shulman said. “And it’s dishonest to deny that it does that… We are a land-grant university, and our mission is grounded in service to the citizens of Colorado. And to me what that means is keeping tuition low and affordable.”’), go after the game boys.

Remember Reed Olsen? Back in 2010 he told everyone at Missouri State University that their expensive new JQH stadium would not only not be profitable (the university insisted it would be profitable) but would hemorrhage money, and he caught hell for it. But of course he was right. As he explained in an email to UD at the time:

Let’s say that we are looking at a $2M ongoing loss in the arena. This is slightly more than 1% of the operating budget of the university. The university, because of a new state law, cannot raise in-state tuition more than [the] increase in the CPI. And for the last 2 years all universities in the state have agreed to not raise tuition at all in return for mostly stable state funding. So that means that most of this $2M must come out of cuts from other parts of the budget or the small increases in student fees from increased out of state tuition or other types of student fees. Students are assessed a fee for [the arena] which supposedly pays for free student seats at BB games. However, that revenue is included in the accounting, still leaving $2M left to pay. Faculty concern is that it comes out of our pocket.

If you’re Missouri State you definitely do not want people like Reed Olsen on your campus – people with the capacity to reason about the finances of your sports program. A simple interview questionnaire teasing out Olsen’s prejudice against sports programs would have saved MSU a lot of grief.

Then there’s Mark Killingsworth at Rutgers, a person just as persistent and tough-skinned as Olsen. Here’s a sample Killingsworth editorial. Excerpt:

The program is a financial disgrace. Since 2003-04, it has racked up $287 million in deficits. The university’s financial plan for sports calls for $183 million in additional deficits through 2022 — despite new revenue from the Big Ten Conference.

These deficits have been funded with subsidies from student fees (students have no say about that, of course) and university general funds. As even the university president concedes, athletics is “siphoning dollars from the academic mission.”

Then there’s Dick Barrett, once a University of Montana econ professor and now a state senator. He routinely offends UM regents by pointing out that their accounts of the athletic budget are full of shit.

Barrett called “bogus” the regents’ argument that millions of dollars in tuition waivers for athletes shouldn’t be counted as subsidies because no cash changes hands.

Tuition waivers for athletics totaled $8 million last year for all campuses, including $2.8 million at MSU, according to Frieda Houser, University System director of accounting and budget.

The university could have decided to “sacrifice revenue” in other ways, Barrett said. “It could decide not to charge other students as high a tuition.

“Students are subsidizing athletics, not just in their (athletics) fee, but they have to pay higher tuition so athletes can pay lower tuition,” he said.

There’s UD‘s pal Bill Harbaugh, econ, University of Oregon, exploding the myth of the program’s self-sufficiency. Vanderbilt econ professor John Siegfried is amusing on the subject of his and other schools’ prisoner’s dilemma. There’s Marilyn Flowers, chair of economics at truly sports-fucked Ball State:

… Ball State has more than $14 million budgeted for its athletics programs. Approximately 80 percent of the budget is paid for from student fees – almost $9 million – and institutional support – almost $2.5 million.

“When it costs so much for kids to go to school, and you charge them $800 a year and most of them don’t go to any games, that I think is really unfortunate,” Flowers said.

Even Auburn hears occasional squawks from its econ department. The chair of economics there warns that sports is so autonomously powerful on campus that it represents “a second university.”

As jock schools escalate their policy of robbing students and taxpayers to give multimillionaire coaches raises and pay back crushing stadium debt, the last thing they need is financially literate people exposing their … complex… bookkeeping. The entry interview is their only opportunity to head these people off at the pass.

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4 Responses to “Coming to America’s Big-Time Sports Universities: Litmus Tests for Economics Professors”

  1. charlie Says:

    One of the biggest jock shops, LSU, is in serious financial trouble, due to LA’s massive financial deficit. Hammer seems to have fallen on Illinois, they’re having trouble fulfilling their pension obligations.

    http://www.reuters.com/article/2015/10/14/us-usa-illinois...

    The state also doesn’t have the resources to meet its lotto payments. No matter the amount of the prize, actual cash paid is $600, the rest comes in the form of an IOU. If the state is in this much trouble, how much longer can IL public unis maintain solvency?

    Wonder how many uni profs, of any specialty, were discussing the possibility of states effectively going into default? UD’s own GWU had one, Dr. Fredrick Thayer, who studied the history of US economic depressions and wrote of the possibility of defaulting public entities. That was back in the 90’s. It’s not just athletics, universities were premised on an unsustainable debt/bigger fool business model. Reckoning time….

  2. Anon Says:

    But, wait, UD. Just days ago, you were trying to convince us that these sports empires were making huge profits? What happened?

  3. Margaret Soltan Says:

    Anon: No – I’ve never said they make huge profits. I’ve said that some of them HIDE huge profits.

    Most of them fail to make money.

    Very few actually make serious money that they share with the academic side of their university. Most of the money they make is plowed back into the athletics program.

  4. charlie Says:

    All of us should be VERY leery of university claims regarding the financial status of their athletic departments.

    sports.vice.com/en_us/article/college-sports…

    http://www.seattletimes.com/sports/college/self-sufficient...

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