Maryland's Tough Decision

The University of Maryland, finding itself in a long-term structural deficit due to its athletic programs, has decided to cut 8 of 27 varsity sports.  The Washington Post reports:

Calling Monday a “day of enormous sadness,” University of Maryland President Wallace D. Loh accepted the recommendation of his athletics commission to cut eight of the school’s 27 varsity sports programs in an effort to tackle the athletic department’s multimillion dollar deficit...

Loh said the current business model in college sports, where schools rely on two revenue-producing sports (football and men’s basketball) as well as lucrative television contracts associated with those sports, is “inequitable and unsustainable.” Loh pledged to continue to work with the ACC, NCAA and other national organizations to address what he called the escalating financial arms race in college sports.

The cuts follow a report produced by a commission established by Loh to assess the deficit and recommend actions in response.  The report, which can be found here in PDF, has relevance much beyond the University of Maryland.

The report surveys the newly-constituted Atlantic Coast Conference which has the participation of 14 schools.  The report provides these eye-popping numbers.

First, total athletic department expenditures:

1. Florida State University $75 million
2. University of Miami $51 million
3. Clemson $56 million
4. Duke $68 million
5. Wake Forest $41 million
6. Georgia Tech $47 million
7. Boston College $63 million
8. University of Virginia $71 million
9. University of Pittsburgh $49 million
10. UNC $67 million
11. Virginia Tech $50 million
12. NC State $47 million
13. University of Maryland $51 million
14. Syracuse University $49 million

These expenditures result in an "investment per student athlete" (FY 13) of $129,000 per yer at FSU to a low of $68,000 at Syracuse, which no doubt masks large differences across different sports. By cutting 8 sports, Maryland's per athlete investment will jump from $57,000 in FY 10 to $108,000 in FY 13.

The Maryland report provides further details on a system that is fundamentally broken and unsustainable.

Stefan Szymanski Joins the Blogosphere

At Forbes, Stefan Szymanski has a new blog .. Sporty Business ... check it out. Stefan is of course the co-author (with Simon Kuper) of Soccernomics.

You can see Stefan above, recently discussing the increasing role of US owners in the EPL. Recently Stefan moved from London to the University of Michigan.

What Explains Parity in European Football?

Writing in the WSJ Jonathan Clegg and Matthew Futterman offer up a theory to explain why it is that the top football leagues in Germany, England, France and Italy show so much parity this year, whereas Spain does not. I find their theory lacking.

Here is the core of their argument:

This year, however, just seven points separate seventh-place Arsenal from second-place Manchester United in the English Premier League. The last time things were this close at this stage in that league was during the 2001-02 season. In Italy, the No. 15 team, Cagliari, is just nine points behind first -place Juventus. The Serie A standings haven't been this bunched up through 11 games since the 1999-00 season, when eight points separated the top 13 teams. Poor Internazionale, the world club champion in 2010, is 16th with 11 points. In France, six teams are within eight points of the top and traditional powers Lyon and Marseille, stuck in fifth and 10th place respectively, are trying to hold off upstarts like Lorient and Caen.

All this has produced some spectacular benefits for soccer fans: a frenzied competition for supremacy up and down the table every week—and also for a coveted spots in the Champions League.

As fans soak up the spectacle, it's unlikely any of them will raise a pint in thanks to the two Spanish superpowers, Barcelona and Real Madrid, who have made headlines of late for spending money like Gilded Age industrialists in a bid to hoard most of the world's elite talent. After all, Spain's piggishness in luring away mega-stars like Cristiano Ronaldo, Xabi Alonso, Cesc Fabregas, Javier Mascherano and Alexis Sanchez has been widely described as a potential apocalypse for club soccer.

As it turns out, that's not exactly true. By hoarding all the top players, Spain's dual powers might actually be doing Spanish fans a disservice (by discouraging competition) and the rest of Europe a favor (by making its leagues more balanced).

What have Barcelona and Real Madrid done?  They have secured the services of 10 of the top 20 players in the world, according to the Castrol rankings. Impressive, no doubt, but hardly enough to explain parity across dozens of teams in four other leagues.

It is certainly true that there is a lack of parity in the Spanish league, and it indeed results from more talent present in the top two squads compared to everyone else.  But this feature of La Liga has nothing to do with the parity found elsewhere.

To explain why there is parity elsewhere in Europe we need only look to how television monies are distributed within each league. According to The Swiss Ramble:

[W]ith the exception of La Liga, every major league distributes a good proportion of the TV funds equally, either explicitly or via the weighting of the allocation. However, the Premier League distributes more money this way than any other league, mainly due to the surge in overseas rights.

The result is that the ratio from top to bottom earning clubs in terms of TV payments is much smaller in the Premier League at 1.5, especially compared to La Liga where it is 12.5. So, last season Manchester United received £60 million, while Blackpool got £39 million. In contrast, Barcelona and Real Madrid received around £123 million, while Malaga had to make do with £10 million.

That’s bad enough, but the real issue in Spain is that the drop starts immediately with third placed Valencia only receiving £37 million, so the big two earn at least three times as much TV money as their closest challengers. Every other league is more equitable with the top team earning between 1.1 and 1.2 times as much as the third highest earner.

Spending on players is closely correlated with team performance, as indicated by this graph from UEFA (PDF):

It isn't Spain's revenue allocation policies that are benefiting the other big leagues in Europe. Rather, it is their own policies which serve to level the playing field to a much greater degree. If parity is indeed a desired characteristic of league play, then such comparative experience will be well worth noting.

What Does College Sports Conference Realignment Mean?

The New York Times Room for Debate has done a round-up of views -- including mine -- on the significance of realignment among college football conference associations.  I start my piece as follows:

Big-time college athletics are coming into conflict with another great American tradition – making money.

Have a look, comments welcomed!

Happy Thanksgiving!

Hello Old Friend

The Swiss Ramble on EPL TV Rights

Last month The Swiss Ramble had a nice analytical piece on the distribution of TV money in the English Premier League.  Here is an excerpt:

[T]he Premier League’s TV rights deal is the envy of other leagues. At £1.1 billion a year, it is well ahead of the rest with only Serie A (£0.9 billion) coming close. Incredibly, the deal is twice as much as La Liga (£0.5 billion) and three times as much as the Bundesliga (£0.4 billion). The principal reason for the disparity is the overseas rights, which are worth nearly £0.5 billion in England, but are negligible everywhere else. This helps explain why English clubs are increasingly focused on this element of the deal.

This argument is further supported by looking at how other major leagues distribute their TV income. In England the current deal works out at 67% of the revenue being allocated by means of an equal share with 17% based on on-pitch performance and the same amount on popularity, defined as the facility fee for number of times a club is broadcast live. No other league distributes as anywhere near as much via an equal share.

The full post is here.

Branch vs. Davis: Part II

At The Atlantic, Taylor Branch and Seth Davis mix it up again over the NCAA. Part I is here.

Davis:

[W]hether you like it or not, college athletes are in fact amateurs.

Branch:

By excluding players from basic rights, the NCAA concentrates power unchecked in college athletic departments.

As Davis is on the payroll of CBS Sports, which receives billions of dollars from the NCAA, I can't help but think that the debate would be much improved if Branch's main protagonist was someone without such a direct financial interest.  Surely there are independent academics or analysts out there willing to defend the NCAA?  Anyone?

Penn State

Even if you live outside of the US, it is likely that you've heard of the shocking allegations out of Penn State University over the past week.  A grand jury has charged that former Penn State coach, Jerry Sandusky, who ran a football charity for young boys, sexually assaulted many boys over years. Such criminal acts were witnessed by officials in the PSU football program and shared with the University administration, and no one -- no one -- from the witnesses in the football program to the head coach to the University president took responsible action, allowing the abuse to continue.

This is not a scandal about college football, per se, or college athletics. Those calling for the end of college sports miss the mark -- we would not call for the end of universities if such crimes happened in a laboratory.

First and foremost the Penn State scandal is about an institution that lost its way, lost its morals, lost its sense of responsibility and accountability. Sure, the fact that a college football program was involved with a very powerful coach is a central part of the context -- and reinforces the case for athletic program reform. Athletic programs certainly do have too much power, too much independence and are treated with too much deference. Hopefully, the Penn State scandal will motivate other campuses to improve their governance, not just of football and athletics, but more broadly.

Penn State may have violated federal law, may see its debt downgraded, people have lost their jobs, others may go to prison, lawsuits will surely be filed and the NCAA has suggested sanctions. Such responses are entirely appropriate and Penn State officials and employees are the ones responsible for this outcome which began with one sick individual.

But it is not just Penn State who should answer questions.  What about the media, which had initially reported on these allegations six months ago!  Did they do their job?  What about other campuses?  Miami, Ohio State, even my own campus Colorado, have faced difficult situations in recent years. Is there enough data now to suggest that university governance, including and especially that related to intercollegiate sports, needs a make over? 

The Penn State reverberations may be long-lasting.  My worry is that they might not be.

Democracy Not in Action

FIFA has chutzpah, you have to give them that:

Brazil must hurry up and pass a package of new laws if the 2014 World Cup is to go ahead, FIFA secretary general Jerome Valcke told the country's Congress on Tuesday, adding there was "not a day to lose."

"Either we do (the Cup) together or we will never manage it," said Valcke, pointing out that Brazil had first been asked to pass the legislation in 2007 when it was awarded the right to host the tournament.

Brazil's Congress must agree to implement a number of special rules in the so-called World Cup law, covering matters ranging from the price of tickets to penalties for selling pirate merchandise and the sale of alcohol in stadiums.

Some of these over-ride local laws, which has stirred up nationalistic sentiment in a country intensely proud of its soccer tradition and its recent economic progress.

Some Congressmen have already dug in their heels, threatening to delay the bill's approval and adding to concerns over Brazil's lagging preparations for the global showpiece.

Former Brazil striker Romario, himself now a Congressman, is one of the most outspoken critics, saying the law would trample on the country's sovereignty.

What is at stake? Just $1 billion and the World Cup itself:

There are several parts of the law that some Brazilian lawmakers wish to change. The most contentious issue involves half price tickets for students and senior citizens; FIFA calculates that these discounts would amount to a $100 million loss for the organization. Discounted tickets for students and seniors are guaranteed by Brazilian law, but FIFA proposed an alternative: setting aside 10 percent of all sales for $25 tickets. These tickets would be sold exclusively to Brazilians, but of any age. FIFA also maintained its demand to sell alcoholic beverages in stadiums (Budweiser is one of FIFA’s biggest sponsors). Alcohol is prohibited in Brazilian stadiums due to concerns over violence and illegal sales to minors, but it’s likely Congress will concede on this point. Since piracy is an ongoing problem in Brazil, FIFA has mandated a change to the penal code to increase jail time for pirating FIFA products and illegal transmission of games. The likely compromise will be to increase piracy prevention, but not to change the penal code. Finally, Brazilian legislators are under the impression FIFA wants to create special temporary courts to try cases involving the event and FIFA brand. If Brazil allows the temporary courts, they would be run by Brazilian magistrates with support from the attorney general’s office. However, FIFA denies this particular demand, claiming it was a unique situation in South Africa, due to the inability of local courts to handle FIFA cases.

Though Rousseff supposedly worked out an agreement with FIFA in October, Valcke’s visit indicates an uphill battle in Brazil’s Chamber of Deputies. Brazil has always been sensitive to sovereignty issues and is also eager to flex its muscles as an emerging world power. But FIFA is keen to protect its business interests. According to VEJA, FIFA could lose up to $1 billion if Brazil refuses to meet its requirements. 

Brazil is under considerable pressure to pass the World Cup law, though it may not be approved until next year. A clause in the original FIFA agreement would allow the World Cup to be removed from Brazil as early as next year, should the law fail to pass or should FIFA decide Brazil is in violation of its agreement.

Sometimes it seems that FIFA officials think that the organizations demands trump national laws. Here is FIFA Secretary General Jérôme Valcke:

"It can’t be seen as a national event, it can’t be seen as a purely Brazilian event, and it can’t be seen as an event controlled by a single country. The World Cup is organized by FIFA for the rest of the world.”

If I was Romario that would get my dander up too.

Then and Now: Qatar Edition

Then:

FIFA's inspection team will be shown a prototype climate-controlled stadium on Tuesday during the first stop on a three-day visit to evaluate Qatar's chances of hosting the 2022 World Cup.
The team, making their ninth and last visit to bidding countries, will consider the possibility of bringing the finals to the Middle East for the first time.

Bid chairman Mohammed bin Hamad bin Khalifa Al Thani, a member of the Qatari royal family, said in an opening address . . .

"We have been honest about our cooling technology system. It is now zero carbon and we have already proved the technology does work and we can cool stadiums and we are now proving we can do it in an environmentally friendly way."

Sheikh Mohammed said the hot weather was a challenge Qatar had to overcome.

"We will tackle it head on, our technology works and will be very successful," he added.

Doha already has six state-of-the-art stadiums and more would be built in time for the finals.

The prototype stadium the delegates from FIFA, football's governing body, were being shown on Tuesday has a zero carbon footprint and will be the system used at every venue.

Now:

After all the talk of using state-of-the-art air conditioning to cool stadiums at the 2022 World Cup in Qatar, the architect in charge of one of the venues reversed course and claimed Tuesday that a more old-fashioned solution would be cheaper and better.

Leading firm Populous, which is designing the Sports City stadium in Doha, is trying to persuade Qatari organizers to scrap plans to have air conditioning at the venue.

Populous director John Barrow said the system is too expensive and “notoriously unsustainable” for the environment when used on a large scale. Barrow, whose firm helped draw up the prototype of an air-conditioned stadium, now believes the planned 47,000-seat Sports City arena can be kept cool by shading seats and using traditional Arabic methods for ventilation.

“I think you can be more clever. It is about air movement, moisture in the air and it is about temperature at the right time of day,” Barrow told delegates at the International Football Arena conference. “If we get it right … that is the way ahead.”

The concept of air-conditioned stadiums to beat the 122-degree desert heat in June was a defining theme of Qatar’s winning bid last year.

Qatar hired Populous to help its campaign, drawing on the firm’s experience in building signature projects such as the new Yankee Stadium, London’s 2012 Olympic Stadium and Arsenal’s Emirates arena.

The firm built a small prototype of an air-conditioned stadium in Doha to help persuade a FIFA inspection team that the tiny nation’s ambitious World Cup project could succeed.

“We are doing away with all the air-conditioning kit that is going to cost a fortune to run,” Barrow said.

Instead, he is proposing wind towers that suck up hot air to create fan-like air movement inside the stadium.

“It is part of the building tradition in the Gulf to create wind towers, which naturally ventilate. If you have got an air movement, which keeps you cool like a fan, that makes all the difference.”

Qatar promised FIFA that its 12 World Cup stadiums could be regulated at around 79 degrees. Now, Barrow says spectators could be sitting in 86-degree temperatures during evening matches.

“Fan expectation needs to be a little more relaxed,” he said on the conference sideline.

Using Sport to Teach Statistics

The NYT has a neat article on college professors who use sport as a basis for teaching statistics.  here is an excerpt:

While traditional what-if situations involving dice rolls and poker hands remain a staple, sports offers dozens of real-life games every day that generate scads of data begging to be examined. Flipping a coin twice is a mundane thought experiment; having Steve Nash of the Phoenix Suns attempt two free throws with a game on the line is like watching ESPN in the classroom.

One student says:

“It’s a major reason I’m here in the class at all,” said Micah Barbour, a freshman planning to major in political science. “I love sports and sports is all about statistics. I’ve never had an opportunity where a class can take something and make it so real-life. It’s cool to finally have fun in math.”

I may have to develop such a class myself!

You can take a quiz to test your statistical knowledge here.

Are "Student-Athletes" Employees?

McCormick and McCormick (2005, PDF) say, yes, obviously:

Abstract: Grant-in-aid athletes in revenue-generating sports at Division I National Collegiate Athletic Association (NCAA) institutions are not “student-athletes” as the NCAA asserts, but are, instead, “employees” under the National Labor Relations Act (NLRA). To be an employee under that Act, these athletes must meet both the common law test and a statutory test applicable to university students. In applying the common law test to athletes, we describe their daily lives through interviews with current and former Division I grant-in aid athletes. These interviews demonstrate that their daily burdens and obligations not only meet the legal standard of employee, but far exceed the burdens and obligations of most university employees. In addressing the statutory definition of the term employee, we demonstrate that the relationship between these athletes and their universities is not primarily academic, but is, instead, undeniably commercial. As employees under the NLRA, these athletes are entitled “to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” Consequently, they will be able to acquire bargaining power through collective association and to negotiate their terms and conditions of employment, including wages not arbitrarily limited to the level of athletic scholarships.

This hard-hitting paper concludes:

To call NCAA Division I athletes in revenue-generating sports amateurs is farcical. The NCAA’s droning insistence on labeling them student-athletes” is done simply to shore up the fiction that they are something other than employees. NCAA rules, promulgated by the university-employers themselves, bar these athletes from earning compensation representing their true worth. Unaware of their market value, constrained by NCAA strictures, and raised in the myth of the student-athlete, they enter into servitude by the thousands every year. Thus, this fiction has worked to convince even the players themselves to bask in the bright, but brief, glow of their status as campus heroes, and has nurtured their unrealistic dreams of glory, obscuring the reality of their exploitation.

The power of myth is undeniable.406 It has served the economic interests of the NCAA and many other participants in major college sports richly. But the power of the law is also great, and a society that respects the law looks through the myth and the propaganda to facts. The rule of law eschews a “tyranny of labels”407 and seeks truth. And the truth is that these athletes are employees under the law.

I agree.

Andrew Jennings Visits the Brazilian Senate

Jens Weinreich has the full text and images from Andrew Jennings (pictured above at PTG 2011) recent testimony before the Education, Culture and Sports Committee of the Brazilian Senate. Play the Game has a nice summary here.

Here is how Jennings begins, and you should read the whole testimony:

Good morning. Thank you for your invitation.

I have been an investigative reporter for 45 years. I research and acquire confidential documents.

Then I write books and articles and make investigation films for the BBC.

I have been investigating FIFA for 10 years.

I have considerable experience in investigating organised crime and I can assure you that FIFA ticks all the boxes in the academic definition of an Organised Crime Family.

Today I want to tell you about the latest corruption crisis at FIFA and how it will impact on the 2014 World Cup.

But first – Meet some of the members of FIFA’s 23-man Executive Committee.

Jennings has some pretty remarkable material. Here is a Brazilian new report on Jennings' testimony.

FIFA to Investigate Makudi

FIFA has announced that it will open an investigation of Worawi Makudi, chairman of the Football Association of Thailand (I first discussed Makudi here).  From the BBC:

FiFifa says Thai football boss Worawi Makudi will face a formal investigation by its ethics committee unless he provides proof by 1 December he did not misuse $860,000 (£535,000) of football development funding.

Thailand FA president and Fifa executive committee member Makudi is accused of using money for football projects on land that he personally owns, an allegation he denies. . .

Makudi would be the sixth senior Fifa executive to face an ethics hearing since October 2010 if he is unable to provide Fifa with the information it has demanded. It is understood he would face charges in connection with a possible breach of section five of the organisation's code of ethics.

Section Five is the slim part on "conflicts of interest" that I highlighted earlier this week, and it is presently getting quite a workout. At what point does FIFA need to take action with respect to its Executive Committee?

With six members facing formal investigations and numerous others accused of corruption, does the Committee loose its legitimacy at some point?  Has it already? Can it oversee Seep Blatter's reform process? I suppose that we shall soon learn the answers to the questions, simply as a practical matter.

UK Parliament: FIFA Should be Investigated

The Culture, Media and Sport Committee of the UK Parliament has called for a full investigation of FIFA's governance, particularly as related to Lord Treisman's allegations earlier this year:

. . . the committee is still concerned that no apparent effort was made by FIFA to investigate these allegations when they were put to it, and that other allegations - specifically those made by Lord Triesman in evidence to the committee - remain.

Since it was Lord Treisman who levied the allegations, then how about the UK Parliament opening an investigation?  Recommendations offered in the passive voice usually don't get too far.

Lord Triesman's testimony from last May can be found below.

ESPN and College Football Realignment

USA Today asks some uncomfortable questions:

For all that ESPN has lent to the growth of major-college athletics — through on-air exposure and with rights-fees payouts that schools have fed into stadium improvements, luxurious locker rooms and huge contracts for top coaches — there's an undercurrent of concern about the influence of the self-proclaimed Worldwide Leader in Sports.

It's not just that its tentacles are everywhere: They're everywhere at once.

As a TV rights holder, ESPN is a business partner to a wide array of conferences and schools (its total college outlay will average more than $700 million annually by next year).

And as a leading broadcast, print and online news outlet, ESPN also reports the news it's often a party to making.

"We've created … I was going to say a blurry line, but I don't think there is any line anymore as to who's in charge," says Andy Geiger, a former athletics director at Ohio State University.

"We're doing business with an entertainment company whose only way of surviving involves the number of eyeballs watching the screen," he says. "That is the driving force in what I see as all the decisions being made."

Realignment is here to stay:

Others see it differently. UConn President Susan Herbst, on the landscape a few weeks ago: "One of the things I think we're all resigned to is that regionalism is pretty much over. In terms of stability and finding the best institutions that fit, that you want to play, you have to go pretty far beyond where you ever thought. And that's OK. I think most of us are settled with it. Football, it's a little easier because you only go to a far away place every other year and they come to you every other year. … The world is flat. I think we've all come to see that college athletics is like telecommunications or political organizing or any of the kind of dynamic institutions that used to be very regional. It's a national activity."

NCAA President Mark Emmert said last month of the variety of plans being discussed, "These are all living social science experiments."

A social science experiment, one might add, heavily focused on economics.