5 ms·

An employee with specialized skills who runs a profit center in an organization makes the most money? Color me surprised.

by teej 13y ago

prostoalex 13y ago
Profit centers, eh? http://seattletimes.com/html/collegesports/2010103078_ncaa21.html http://seattletimes.com/html/collegesports/2010103078_ncaa21...
- wtvanhest 13y ago
  From your link: Of the 119 FBS football teams, 68 (57.1 percent) finished the year in the black. Of the 119 FBS schools playing men's basketball, 67 teams made a profit. One of those same 119 schools made money in women's basketball in 2008. FBS football teams recorded a median net profit of $1.95 million. Men's basketball at the same schools produced a median profit of $518,000. No other sport at the FBS schools, measured by median values, showed a program in the black. so yeah, profit centers.
  - prostoalex 13y ago
    The facility cost is shifted to university's balance sheet. Most calculations assume that the cost of building and maintaining a stadium and supporting infrastructure is zero. I'm going to sound like an economist that refuses to pick up a $20 bill (if it's real, somebody else would've picked it up), but there's, for example, profit opportunity in on-campus food catering. So a bunch of private contractors sign up with university to operate their own facility, hire their own staff, and give the university a cut of the earnings or licensing fee. Why has no for-profit corporation stepped up to build up a stadium, hire coaches and players, license the university name and then enjoy the profits?
    - bostonpete 13y ago
      An athletic program in isolation may not be profitable, but I think most schools view it as an important way to keep alumni involved and believe the increase in alumni donations more than offsets any loss they may take in athletics.
    - wtvanhest 13y ago
      The facility cost is shifted to university's balance sheet. Most calculations assume that the cost of building and maintaining a stadium and supporting infrastructure is zero. Do you have a source on that? I couldn't figure out a way to research it myself, but it seems illogical that the cost of financing the facilities would not hit he P&L of the athletics association. Why has no for-profit corporation stepped up to build up a stadium, hire coaches and players, license the university name and then enjoy the profits? The same reason many Universities still own on campus housing in most cases. Likely because Universities will not let them. Also, it is likely that the NCAA would oppose it.
- jlcx 13y ago
  Good point. A lot of people assume that college sports programs always generate income for the school, but many of them lose money (though probably not the ones employing these particular coaches). I attended a school that was in the process of adding a football program, and the first effect of that was an extra fee for students (in addition to an existing athletics fee). I think the only way that college sports can be acceptable is if they never take money from other programs or increase the cost of education for students not participating in those sports.
- gtCameron 13y ago
  Yes, profit centers. Notice how all but one of the coaches on that map coach Football or Basketball. Athletic departments as a whole aren't profitable because the ridiculous amounts of profits earned by basketball and football can't subsidize the losses incurred by supporting the other sports.
  - prostoalex 13y ago
    Does this profit calculation include or exclude the cost (or bond interest payments) of building up a football stadium with supporting facilities?
    - ajross 13y ago
      Obviously that's going to be an analysis that has to be done for every stadium. Certainly in many cases it works out -- the average age of an NCAA stadium or arena is much higher than a professional venue. These are not the billion-dollar megaplexes you're probably imagining. But really, I think the issue here is that you're arguing at cross purposes. There's a strong argument to be made that the whole idea of the state running a profit-making sports team through its universities is flawed and borderline immoral. And I tend to agree. But that says nothing about the economics of the situation, or the "fairness" of paying the coaching staff a market wage, or even the fact that these absurd salaries are, in fact, driven by a very liquid and efficient market.
      - prostoalex 13y ago
        Yeah, agree with what you're saying. The "fairness" comes into play as high-salaried coaches become high-pensioned retirees [1], but other than that NCAA salaries are not wildly divergent from professional sports salaries, so seem to be in line with market http://budget.universityofcalifornia.edu/files/2011/11/2012-13_budget.pdf http://budget.universityofcalifornia.edu/files/2011/11/2012-...
- ryguytilidie 13y ago
  Yes, profit centers. While most are losing money, the ones paying their coaches many millions of dollars, generally are not.
- slg 13y ago
  I think the obvious question regarding this issue is whether athletics provide any educational value. Is so, why would we care if they turn a profit? How would spending funds on athletics be any different than spending funds on other ancillary departments like drama or music? It seems that most universities believe there is some value in it for students considering that many schools are happy to run athletic departments at a net loss. The Ivy League for example has a strong tradition of fostering athletic competition and those schools often have larger athletic departments than most large state universities.
  - jhawk28 13y ago
    Athletic departments also provide a marketing opportunity. Students are often willing to go to a particular school because they like the football team. For better or worse, sports add an additional experience to college.
- BCM43 13y ago
  Is this including increased revenue from alumni? Or rather, how much it would decrease if the sports teams were removed? I'm not sure if this is actually something that would happen, but it seems like it could be.
  - prostoalex 13y ago
    While it's unclear where removing the sports team would work (one would probably have to look at universities outside of US, which more often don't have large athletic programs), this research found no correlation between team performance and alumni donation volume. http://www.news.cornell.edu/stories/2004/09/surprise-winning-teams-rarely-attract-more-alumni-gifts http://www.news.cornell.edu/stories/2004/09/surprise-winning...
- GusClark 13y ago
  Yes, most college athletic departments do operate in the red. I think you are forgetting about the professional sports, and the professional coaches.
ChrisLTD 13y ago
And yet the specialized employees people really pay to watch make nothing at all.
- sharkweek 13y ago
  I can't imagine this lasts much longer -- it's such a charade to begin with that eventually there will have to be a major shift in how college athletics are handled. http://www.nytimes.com/2012/01/01/magazine/lets-start-paying-college-athletes.html http://www.nytimes.com/2012/01/01/magazine/lets-start-paying...
- mjt0229 13y ago
  I agree that the disparity is a serious problem. However, I reject the notion that the solution is to pay the athletes. The fundamental problem is the intertwining of a business and an academic pursuit; colleges should not be in the business of sports, and the sports they have should be about amateur competition rather than fundraising or prepping athletes for the NBA, or the NFL, etc. The solution is to divorce academic institutions from the sports business.
  - dfxm12 13y ago
    The solution is to get rid of ridiculous requirements that certain pro leagues (NFL, NBA) have mandating certain years of college experience. This deprives no one their ability to make money & also gives student athletes the ability to either get an education or hone their skills. Most of these high paid coaches and rules violations involve football and basketball anyway...
- shoeless 13y ago
  What will be fascinating is to watch what happens with youth sports once they start paying college athletes. It will no longer be about little Johnny getting a college scholarship to play for Note Dame, it will be about real money. Can't wait to see what the sidelines sound like at your local youth sporting event.
  - 13y ago

An employee with specialized skills who runs a profit center in an organization makes the most money? Color me surprised.

by teej 13y ago

An employee with specialized skills who runs a profit center in an organization makes the most money? Color me surprised.

prostoalex 13y ago

Profit centers, eh? http://seattletimes.com/html/collegesports/2010103078_ncaa21.html http://seattletimes.com/html/collegesports/2010103078_ncaa21...

wtvanhest 13y ago
From your link: Of the 119 FBS football teams, 68 (57.1 percent) finished the year in the black. Of the 119 FBS schools playing men's basketball, 67 teams made a profit. One of those same 119 schools made money in women's basketball in 2008. FBS football teams recorded a median net profit of $1.95 million. Men's basketball at the same schools produced a median profit of $518,000. No other sport at the FBS schools, measured by median values, showed a program in the black. so yeah, profit centers.
- prostoalex 13y ago
  The facility cost is shifted to university's balance sheet. Most calculations assume that the cost of building and maintaining a stadium and supporting infrastructure is zero. I'm going to sound like an economist that refuses to pick up a $20 bill (if it's real, somebody else would've picked it up), but there's, for example, profit opportunity in on-campus food catering. So a bunch of private contractors sign up with university to operate their own facility, hire their own staff, and give the university a cut of the earnings or licensing fee. Why has no for-profit corporation stepped up to build up a stadium, hire coaches and players, license the university name and then enjoy the profits?
  - bostonpete 13y ago
    An athletic program in isolation may not be profitable, but I think most schools view it as an important way to keep alumni involved and believe the increase in alumni donations more than offsets any loss they may take in athletics.
  - wtvanhest 13y ago
    The facility cost is shifted to university's balance sheet. Most calculations assume that the cost of building and maintaining a stadium and supporting infrastructure is zero. Do you have a source on that? I couldn't figure out a way to research it myself, but it seems illogical that the cost of financing the facilities would not hit he P&L of the athletics association. Why has no for-profit corporation stepped up to build up a stadium, hire coaches and players, license the university name and then enjoy the profits? The same reason many Universities still own on campus housing in most cases. Likely because Universities will not let them. Also, it is likely that the NCAA would oppose it.
jlcx 13y ago
Good point. A lot of people assume that college sports programs always generate income for the school, but many of them lose money (though probably not the ones employing these particular coaches). I attended a school that was in the process of adding a football program, and the first effect of that was an extra fee for students (in addition to an existing athletics fee). I think the only way that college sports can be acceptable is if they never take money from other programs or increase the cost of education for students not participating in those sports.
gtCameron 13y ago
Yes, profit centers. Notice how all but one of the coaches on that map coach Football or Basketball. Athletic departments as a whole aren't profitable because the ridiculous amounts of profits earned by basketball and football can't subsidize the losses incurred by supporting the other sports.
- prostoalex 13y ago
  Does this profit calculation include or exclude the cost (or bond interest payments) of building up a football stadium with supporting facilities?
  - ajross 13y ago
    Obviously that's going to be an analysis that has to be done for every stadium. Certainly in many cases it works out -- the average age of an NCAA stadium or arena is much higher than a professional venue. These are not the billion-dollar megaplexes you're probably imagining. But really, I think the issue here is that you're arguing at cross purposes. There's a strong argument to be made that the whole idea of the state running a profit-making sports team through its universities is flawed and borderline immoral. And I tend to agree. But that says nothing about the economics of the situation, or the "fairness" of paying the coaching staff a market wage, or even the fact that these absurd salaries are, in fact, driven by a very liquid and efficient market.
    - prostoalex 13y ago
      Yeah, agree with what you're saying. The "fairness" comes into play as high-salaried coaches become high-pensioned retirees [1], but other than that NCAA salaries are not wildly divergent from professional sports salaries, so seem to be in line with market http://budget.universityofcalifornia.edu/files/2011/11/2012-13_budget.pdf http://budget.universityofcalifornia.edu/files/2011/11/2012-...
ryguytilidie 13y ago
Yes, profit centers. While most are losing money, the ones paying their coaches many millions of dollars, generally are not.
slg 13y ago
I think the obvious question regarding this issue is whether athletics provide any educational value. Is so, why would we care if they turn a profit? How would spending funds on athletics be any different than spending funds on other ancillary departments like drama or music? It seems that most universities believe there is some value in it for students considering that many schools are happy to run athletic departments at a net loss. The Ivy League for example has a strong tradition of fostering athletic competition and those schools often have larger athletic departments than most large state universities.
- jhawk28 13y ago
  Athletic departments also provide a marketing opportunity. Students are often willing to go to a particular school because they like the football team. For better or worse, sports add an additional experience to college.
BCM43 13y ago
Is this including increased revenue from alumni? Or rather, how much it would decrease if the sports teams were removed? I'm not sure if this is actually something that would happen, but it seems like it could be.
- prostoalex 13y ago
  While it's unclear where removing the sports team would work (one would probably have to look at universities outside of US, which more often don't have large athletic programs), this research found no correlation between team performance and alumni donation volume. http://www.news.cornell.edu/stories/2004/09/surprise-winning-teams-rarely-attract-more-alumni-gifts http://www.news.cornell.edu/stories/2004/09/surprise-winning...
GusClark 13y ago
Yes, most college athletic departments do operate in the red. I think you are forgetting about the professional sports, and the professional coaches.

ChrisLTD 13y ago

And yet the specialized employees people really pay to watch make nothing at all.

sharkweek 13y ago
I can't imagine this lasts much longer -- it's such a charade to begin with that eventually there will have to be a major shift in how college athletics are handled. http://www.nytimes.com/2012/01/01/magazine/lets-start-paying-college-athletes.html http://www.nytimes.com/2012/01/01/magazine/lets-start-paying...
mjt0229 13y ago
I agree that the disparity is a serious problem. However, I reject the notion that the solution is to pay the athletes. The fundamental problem is the intertwining of a business and an academic pursuit; colleges should not be in the business of sports, and the sports they have should be about amateur competition rather than fundraising or prepping athletes for the NBA, or the NFL, etc. The solution is to divorce academic institutions from the sports business.
- dfxm12 13y ago
  The solution is to get rid of ridiculous requirements that certain pro leagues (NFL, NBA) have mandating certain years of college experience. This deprives no one their ability to make money & also gives student athletes the ability to either get an education or hone their skills. Most of these high paid coaches and rules violations involve football and basketball anyway...
shoeless 13y ago
What will be fascinating is to watch what happens with youth sports once they start paying college athletes. It will no longer be about little Johnny getting a college scholarship to play for Note Dame, it will be about real money. Can't wait to see what the sidelines sound like at your local youth sporting event.
- 13y ago