College Athletics By The Numbers: A Deeper Look at Profitability

A recent NCAA report stated that only 14 of the 120 athletic programs in the Football Bowl Subdivision made money. The Football Bowl Subdivision (FBS) includes all BCS conferences (PAC 10, SEC, Big 10, Big 12, etc) so odds are your favorite athletic program is losing money.

12% of college athletic programs are profitable.

Which college athletic sports are profitable?

According to the NCAA study, only two sports were reported by any university as being profitable:

  • Football
  • Men’s Basketball

Let’s take a closer look…

  • Football
    • There is a lot of discussion about football keeping athletic departments alive. Yes, football is one of only two sports (men’s basketball being the other) that ANY university reported as being profitable. At the same time, however, only 57% of football programs reported being profitable.  Thus the other 43% of football programs are still part of the problem.
  • Men’s Basketball
    • As the only other profitable sport that any university reported, men’s basketball is also considered an important aspect of keeping college athletics alive. Once again, however, keep in mind that roughly 57% of men’s basketball programs reported being profitable, so there is a large percentage of men’s basketball programs losing money.

How do college athletic departments MAKE money?

Three items account for over 50% of revenues:

  • Ticket Sales (17%)
  • Alumni/booster donations (27%)
  • NCAA/conference distribution (14%)

How do college athletic departments SPEND money?

Two items account for over 50% of expenses:

  • Salaries and benefits (32%)
  • Scholarships (Grants In Aid) (25%)

In case you are curious, here are a few other items as a percentage of total expenses:

  • Facilities maintenance and rental (13%)
  • Team travel (7%)
  • Recruiting (2%)
  • Equipment/uniforms/supplies (3%)
  • Game expenses (4%)

The median expense per student athlete in 2009 was $76,000.

How much does a college athletic program cost each university?

Average assistance that each university gave to the athletic department was $10.2 million.

How do we improve college athletics moving forward?

There isn’t an easy answer although simple math tells us that a start would be to reduce costs and increase revenue. As witnessed yesterday by Cal’s decision to cut five sports, universities are less willing to keep athletic programs alive so it’s time for college athletic programs to be self sustaining.

Decrease Spending

While salaries and scholarships aren’t necessarily easy to reduce as they are driven by outside factors (salaries of competing positions, tuition rises, etc), the data indicates its the first place to look in terms of reducing costs. This could come in the form of fewer staff members per department/team, lower salaries for staff members within college athletics, or cutting athletic programs. As someone who has worked in sports business, I recognize sports already has low salaries (particularly lower level positions) but I recognize that in order for college athletics as we know it to continue changes need to be made. In my experience, there are opportunities for college athletics to become more efficient. What if conferences became responsible for marketing individual teams instead of the universities athletic departments? Or media rights were handled at the conference or NCAA level instead of the individual institution? I recognize a large percentage of expenses for salaries are on the field in the form of coaches so perhaps there need to be guidelines for coaching salaries in college athletics? Is it time to re-evaluate the scholarship model? Reduce scholarships? Offer various levels of scholarship based on academic standing, performance on team, etc? .  Cutting expenses is always a tough task full of difficult decisions (see Cal), so I welcome any ideas in the comments.

Increase Revenue

The report doesn’t explicitly state what “NCAA and conference distributions” are but presumably its an athletic programs cut of any revenues generated by the NCAA or conference on their behalf (TV, radio, etc). What are some other ways to increase revenue? There is talk that a football playoff would generate significantly more revenue but is that the answer? What about individual conferences forming their own network (similar to Big 10 network)?  Will that generate enough revenue for athletic departments? Can other sports generate significant fan interest? I think the15,896 people who showed up to UC Santa Barbara to watch a college soccer game say yes.

What do you think? I’ve really enjoyed reading the debate the last few days on Twitter regarding college athletics and cutting sports programs so I welcome any ideas, or comments you have. What are some solutions for college athletics? Is there even a problem?

Sources:

NCAA Study: http://www.ncaapublications.com/productdownloads/REV_EXP_2010.pdf

http://www.themaneater.com/stories/2010/8/31/mu-athletics-one-14-ncaa-programs-turn-profit/

Filed Under: Financial Tagged With: , , ,

NBA Draft and Effects on Playing Time

I recently came across a study on the NBA and effects on playing time. The study conducted by Berkeley professors Barry Staw and Ha Hoang, analyzed playing time in the 1980’s over a five year span following the NBA draft. Professor Staw analyzed factors including on court performance, trades, injuries and draft position. What did he find?

“…teams granted more playing time to their most highly DRAFTED players and retained them longer, even after controlling for players’ on court performance, injuries, trade status, and positions played.”

Where a player was selected in the draft was a “significant predictor” in minutes played over the entire five year span that was studied. In addition the draft position effect was “above and beyond” any effects on player’s performance, injury, or trade status. Put simply, players were given more minutes based on where they were drafted.

How significant was the effect on minutes played? Kwame Brown and Michael Jordan on Washington Wizards

Based on a 24 team league (average used in the study) being picked in the second round resulted in 552 fewer minutes in the following year. That is equivalent to sitting on the bench for 47 extra quarters, or almost 12 games!

One might argue that increased playing time makes sense in the season immediately following the draft, but draft order continued to influence playing time up to and including a player’s fifth year in the NBA. Not only did draft order effect playing time, but the higher a player was drafted the less likely he was to be traded and the longer his career lasted.

Pyschological influences

While the study focuses on escalation of commitment and sunk costs, the psychological phenomenon known as irrational escalation is in play as well.  Irrational escalation occurs when people justify increased investment, based on prior investment, despite new evidence showing that decision was probably wrong.  The NBA study illustrates this principle as players were given more playing time based on their draft order (and contract) even when their performance might not have justified such an action.

So what does this all mean?

We often hear management and coaches talking about playing their best five players, or looking at roster changes objectively, but based on this study that isn’t necessarily the case. Whether we realize it or not, management decisions in sports are subject to psychological pulls just like decisions in our own daily lives. Further research and education on the topic can help sports organizations overcome these type of decisions.

What do you think about draft status impacting playing time? Would you have guessed it influences minutes played even five years later? Does this surprise you?

Filed Under: Operations, Psychology Tagged With: ,

Thoughts on Cal Playing at the San Francisco Giants’ AT&T Park

The big college football news yesterday was Cal announcing it will play its 2011 home football games at AT&T Park in San Francisco, home of the San Francisco Giants. My initial reaction was excitement as I’ve always wanted to go to the Emerald Bowl (particularly in 2008) to see what a football game is in San Francisco. As I thought about it further, however, I have a few concerns:

  • Location
    • While AT&T Park does have public transportation (BART, Ferry, etc.) available nearby its not quite as easy as the Oakland Coliseum particularly for a large contingent of students coming from Berkeley. Cal will provide buses for students (which works for UCLA & the Rose Bowl) but in my experience getting to the Oakland Coliseum is more convenient.
  • AT&T Park is built for baseball
    • I’ve never seen a football game at AT&T Park, but from a few comments on Twitter the setup has been a bit awkward at the Emerald Bowl.  While it’s only one season, it seems that a venue that currently supports football would be better, although Candlestick Park & Oakland Coliseum have both had baseball teams play there as well.
  • Capacity of AT&T Park is 45,000
    • Cal’s average attendance for the 2009 season was about 59,000.  The largest crowd was 71,799 for USC and smallest was 53,347 for Arizona. The 2011 schedule will be the same in terms of Pac-10 home and away matchups which means USC will play at AT&T Park. Cal also finished 6th in the Pac-10 and presumably would have larger crowds if they are in the hunt for a Pac-10 title or BCS berth. Athletic Director Sandy Barbour indicated most of the season ticket holders could be accommodated and visiting allotments would be reduced at AT&T Park but that is still a lot of fans that won’t be able to see the team play.
  • AT&T Park might ruin the allure/excitement of a refurbished Memorial Stadium
    • AT&T Park is a world class facility and one of the nicest venues in all of sports.  My concern is that after playing a season at AT&T Park, the excitement and reaction to the newly refurbished Memorial Stadium will be lost.  I’d equate it to a consumer trading in a Lexus for another Lexus, as opposed to a lesser name car for a Lexus. While they are both exciting, transitioning from a lesser quality to higher quality generally results in a more positive reaction from consumers.

My biggest concerns are the latter two. I recognize the biggest problem with the Oakland Coliseum is scheduling given the Oakland A’s and Oakland Raiders currently play there. Presumably it was too difficult to schedule a third team and Candlestick Park is even further away from Berkeley  which presents problems as well.  What are your thoughts on the partnership? What do you see as the biggest benefit, or biggest concern?

Disclaimer: I’m a Cal alum, who completed my MBA at ASU, and will be pursuing a PhD at the University of Oregon in the fall. As I told Jeff Tedford in the Phoenix airport last week, I’m a Cal Bear fan at heart. I love AT&T Park too so I am excited to see Cal play there but do have a few concerns.  Giants president (and Cal alum) Larry Baer called it a “neighborly act” so I certainly wish Cal and AT&T Park the best in their partnership.


Filed Under: Random Tagged With: ,

MLB Innings Pitched By Height

A couple months ago Adam Foster of Project Prospect sent out a tweet wondering how height impacts success and longevity as a pitcher.  Adam is focused on minor league baseball prospects and thus was curious how height impacts a pitchers chances of “making it” and how long they last in the major leagues.

My first instinct was to look at average career innings by height but found the total innings pitched by height to be very interesting.

6’2″ pitchers have combined to throw more innings than pitchers of any other height.  I looked at average career innings pitched by height, but didn’t see any staggering data that would dispute the above graph. Since it can be hard to distinguish relativity in the above graph, I also looked at % of total innings pitched by height.

The percentage chart seems to put things in perspective. 92.2% of the innings pitched since 1960 have come from pitchers 6’0″ or above. 92.2%! It is even more interesting when considering that the average male height is 5 foot 9 1/2 inches. 99.3% of total innings pitched have come from pitchers 5’10″ or taller.

What do you think of the results? Why are taller pitchers responsible for more innings in Major League Baseball? Taller pitchers throw with more velocity? Are more physically intimidating on the mound? Let me know what you think in the comments!

Filed Under: Operations Tagged With: , ,

Baseball Player Height and Weight By Year

My last two posts have been about the average height and average weight of MLB players.  While I will be looking at performance relative to height and weight as well, I wanted to make a quick post to show height and weight over time.  Have players gotten taller on average since 1960?  Do players weigh more now than in 1960?  The answer to both is yes.

MLB Player Height Over Time

Height went from 72.6 to 73.4 which doesn’t seem like a significant change over a 50 year time span.  MLB players are not even an inch taller, on average, than they were in 1960.

MLB Player Weight By Year

Average weight went from 188.6 to 196.4 in about 50 years.  Baseball players on average weigh about 8 pounds more than they did in 1960.

The graphs look more shocking than they actually are given height didn’t even change an inch, and weight changed only about 8 pounds.  What do you think of the graphs?  Any conclusions you’d draw?  The next series of posts will be regarding performance relative to height and weight.

It is important to note that the height and weight data used only appears in the data once, as opposed to an updated height and weight for each player every season. I hope to talk with Sean Lahman about his database to understand at what point in the career that type of information is corrected.  As it stands the trends shown above likely reflect that new players coming in are taller and weighing more, as opposed to an individual player getting taller and heavier over time.

Filed Under: Operations Tagged With: , , ,

Baseball Player Weight By Position

Following up on my post from yesterday regarding average height of baseball players, I wanted to look at the average weight.  I posed the question through my Twitter account, and heard back with pitcher, catcher, first base, designated hitter, and third base.  Again, I looked at all MLB players since 1960 who played at least five games at a position.  If a player, such as Maicer Izturis of the Angels played more than 5 games at 2B and 3B, then he would be counted at both positions.  Which position has players that weigh the most? First base.  Which position has the lightest players in terms of weight in pounds? Shortstop.

Baseball Player Weight By Position

The average MLB historically has weighed 192 pounds.  The difference between the heaviest players (1B) and lightest players (SS) was a little under 26 pounds which is quite a bit!  While average height and weight by position might not show much, there is interesting data to further examine.  For example, how has average height and weight changed over the years?  How does height or weight effect performance?  These are questions I will answer in follow up posts.

Filed Under: Operations Tagged With: , ,

Baseball Player Height By Position

I was at a spring training game a few days ago and had an interesting conversation with my dad regarding average height of position players.  We guessed that middle infielders (shortstop and second basemen) are the shortest players on the field.  Being a numbers guy though I wanted to know for sure.  I looked at all MLB players since 1960 who played at least 5 games at a position.  Thus, if a player played 5 or more games at multiple positions, he was counted at each position.  Which position has the tallest players on the field?  Pitchers.  Which position has the shorts players? 2B.

The average height of MLB players is just over 6’1″.  The difference between the tallest players (pitchers) and shortest players (2B) is three inches which relatively seems like quite a bit.  With that in mind, I’ll analyze performance based on height in a post tomorrow, in addition to looking at positions by weight.  Does the graph show what you expected?  What other ways can you look at height within baseball?

Thanks to Sean Lahman’s Baseball1.com database for the information.

Filed Under: Operations Tagged With: , ,

Have you registered your personal name as a domain name?

I recently had a conversation with a sports executive (whose name is easily recognizable), and was surprised to learn he hadn’t registered his own name as a domain name.  In its simplest form, a domain is a web address like sportsologist.com, or espn.com.  Whether you are an executive in a sports organization, entry level worker trying to advance their career, professor at a university, or a student, registering a domain name is an easy way to control your identity online.

Here are a couple of reasons to own your yourname.com in addition to any business domain you may own:

  • Use For A Consulting Business
    • You have a full time job but have developed a following due to your name and want to start consulting.
  • Develop A Resume or Portfolio Site For Career Advancement
    • Whether you’re a student looking for a job, or entry level worker looking to move up in the world owning your personal name is a start.
  • Forward To A Social Media Site
    • If you’re active on Twitter or Facebook, simply register yourname.com and have it forward to your Twitter or Facebook account, until you are ready to develop a personal site
  • Protect For Future Use
    • Even if you don’t see a need now, it’s possible that down the road you’ll want a personal blog, personal website, and it will be too late.

A few more tips:

  • Buy the .com.  Other domain extensions such as .org, .net, .info don’t garner the same respect as a .com domain.
  • If your name is really popular (like mine) consider variations such as first initial/last name, or first/middle/last name.
  • I recommend GoDaddy (especially for beginners) to register your domain because of reasonable prices and great customer service.

If you have any questions, feel free to ask them in comments!  I do quite a bit of work with domains and websites particularly in sports so I’m happy to help.  I anticipate having more posts in the future regarding domain names as well so stay tuned.

Filed Under: Random, Social Media Tagged With: ,

Camelback Ranch

Basics

Title: Business Development Analyst; Consultant

Years: 2008 – 2010

Description: Responsible for analysis of various components of the Camelback Ranch (Dodgers & White Sox Spring Training) business from tickets to fan feedback.

Specific Actions

Web Development
Developed, designed and built website (camelbackranchbaseball.com) for its highly successful grand opening season. Ranked #1 Cactus League specific website based on unique visitors by Compete.com
Data Analysis
Assisted with research and analysis on attendance, sponsorships, ticket sales, etc. Developed and supervised survey program.
Management
Managed stadium operations intern staff to achieve a high quality guest experience.
Filed Under: Professional Experience

Information Sharing To Influence Sports Fans

In my last post, I talked about the effect of simplicity on sales conversions.  There are many simple changes, such as altering site design, to yield significant improvements.  With that in mind, I’d like to propose another simple idea, that is supported by one of my favorite books, in addition to many social websites:

PEOPLE are influenced by other PEOPLE.

It sounds simple. Think about it.  People are influenced by other people.  Yet that idea is often not utilized to its potential.  With than in mind, I want to look at how sports organizations can use this theory to further influence fans.

How often do fans know the actual number of tickets sold (or even available) at an event prior to considering a purchase?  Rarely.

How often do fans know the actual number of people signed up for the teams’ email newsletter?  Almost never.

Would it make a difference if fans did know?

FansAccording to years of research the answer is simple.  YES.  In addition, lessons can be learned from social sites today that are not only setting the tone for the new age of the Internet, but marketing and sales as well.  For example, WeFollow.com (a popular Twitter tool) greets visitors with a simple pop up encouraging them to sign up.  They also show a message that says (when I last view the site) “Now listing over 684,078 Twitter users.”

While that little bit of information might seem insignificant…its not.  Why does it work?  A non-customer goes to the site, is greeted by a simple welcome screen, and sees that over 650,000 people use the service.  Well if 650,000 people use the site it must be good, right?  That user likely became a customer, as Kevin Rose (the founder of Digg and WeFollow.com) can attest to as well.

If fans knew that 1,500 people had purchases tickets through the teams website that day, or that 87% of tickets had already been sold for a particular game, wouldn’t that influence them to act?  Yes, because fans are influenced by other fans.

Now there are a few caveats to this method.  First and foremost, the method should only be used when the relayed information is true.  If WeFollow.com doesn’t have 600,000+ users it would be inappropriate to market that.  Secondly, the strategy should only be used when it would help the organization.  For example, if WeFollow.com only had 7 users, it’s probably not a good idea to showcase that on their sign up page.   If the information works in your favor, as it could with attendance or email newsletters, it can certainly make a difference.

Filed Under: Psychology Tagged With: ,
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