NCAA = Frauds Part II

A quote from a previous post had me intrigued so I did a little bit of research.

Roughly 95 cents of every dollar pocketed by NCAA will go to member institutions in support of student-athletes, says Greg Shaheen [the NCAA's senior vice president for basketball and business strategies]. USA Today

According to ESPN, CBS currently pays the NCAA $545 million a year for the rights to broadcast the Mens College Basketball Tournament. According to Shaheen the vast majority of those funds goes to the universities. The NCAA has an exceptionally convoluted method of allocating those funds. I don't fully understand it, but I can read Wikipedia, which has a nice summary. After the NCAA finishes with their fancy math they arrive at about $145 million in projected distribution across all the schools in the participating conferences.

Setting aside the fact that the schools that do better get more money, basically ensuring that the rich get richer, I just want to look at the actual numbers. I'm not certain if the $145 million refers to the entire distribution from NCAA tournament funds or just the 50% that is said to be distributed based on conference performance. Being the nice guy that I am, I'll give the NCAA the benefit of the doubt and say that $145 million is 50% of the total distribution. That would mean that the total distribution is $290 million.

Let's see. The NCAA gets $545 million each year from CBS and pays out $290 million total to all the schools. 95% of $545 million is about $518 million. $290 million < $518 million. $290 million is 95% of about $306 million. So where exactly is the rest of the money going? There is between $228 and $255 million ($518-$290 and $545-$290) unaccounted for in these numbers. If the $145 million value is taken as the entire distribution the numbers get even worse. Under that scenario we'd be looking at $370 to $400 million of missing money. Regardless of whether it's $400 million or just $228 million we're looking at some large stacks of cash.* It makes you wonder.

Hey, how much do you think a senior vice president of basketball and business strategies makes each year?

*Stacks of Cash, Copyright © 2003 by Señor Entropy, All rights reserved.

NCAA = Fraud

From USA Today

[The NCAA] is having its official ticket package provider, RazorGator, move large blocks of prime tickets online at markups of hundreds, even thousands, of dollars...

The tickets sold to RazorGator come from allocations reserved for public sale (22% of the tickets) and the association's use (10%). Tickets are also allotted to participating schools (35%), the local host committee (10%), the national basketball coaches' association (8%), college athletics directors (8%) and CBS and corporate sponsors (6%)...

Much of the public-sale allocation was distributed through a lottery for which prospective customers could purchase a maximum of two tickets. They could submit a maximum of 10 applications and be selected once.

Under a partnership that began last year, the NCAA allows RazorGator to purchase an undisclosed number of tickets...

The "much" in paragraph three is nonsense. I applied and was randomly selected to purchase two tickets for each of the Final Four games. According to the letter the NCAA sent me with my tickets the seating capacity of the Alamodome is 43,500. If 22% of seats were allocated to the general public, that is 9,570 tickets. However, in the letter it also says plainly that 4,600 tickets were allocated through the lottery. 4600/9570 = 48%. Less than half of the 22% does not constitute "much" in my mind. The rest of 22% is seemingly sold directly to RazorGator so they can resell them and split the profits with the NCAA. 22% to the general public is bunk. Selling only 10.5% of the total capacity to the public and 35% to the schools isn't commensurate with a collegiate sporting event. It's a corporate function.

Does the NCAA not make enough money off of the TV contracts as it is? Get rid of all the VIP (nonsense) allocations. In my opinion the allocation numbers should be more like 75% for the schools, 20% to the public and 5% to whoever else (prize winners, foreign dignitaries, make-a-wish kids).

For that matter, basketball games aren't meant to be played in domes. Move them back to actual basketball arenas. Yes, they probably won't make as much money and fewer State Farm Senior VPs will be able to go to the game, but at least the players will be able to play a game in a more natural environment.

Plus, given the NCAA's deal with RazorGator, they could play it in a real basketball arena and still make plenty of money. Just sell all the tickets to RazorGator and watch the profit roll in.

Finally...

Roughly 95 cents of every dollar pocketed by NCAA will go to member institutions in support of student-athletes, says Greg Shaheen [the NCAA's senior vice president for basketball and business strategies].

Really? Do the athletic programs really need the money? Wouldn't all this profit be better served in a general scholarship fund? I wish the Social Sciences program had a 43,000 seat tournament. Maybe then my student loans would be so outrageous.