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Topic: $533 Million in dead money. This is what is wrong!

Topic: $533 Million in dead money. This is what is wrong!

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BillyTheCat
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Member Since: 10/6/2012
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$533 Million in dead money. This is what is wrong!

Posted: 11/5/2021 10:54:21 AM

https://www.espn.com/college-football/story/_/id/32552130...

GoCats105
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Location: Seattle, WA
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RE: $533 Million in dead money. This is what is wrong!

Posted: 11/5/2021 11:18:43 AM

Power 5 programs accounting for 88% of that is the key number. Although the Group of 5 has its share, they more or less make smarter financial decisions when it comes to this because they know they can't afford it.

Last Edited: 11/5/2021 11:20:02 AM by GoCats105

giacomo
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RE: $533 Million in dead money. This is what is wrong!

Posted: 11/5/2021 11:39:56 AM

This is ludicrous on so many levels. And I'm not talking about the rapper.

Bobcat Love's Sense of Shame
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RE: $533 Million in dead money. This is what is wrong!

Posted: 11/5/2021 12:03:38 PM

There's another thread where people are insistent that we add to that total this offseason. Even though we're already adding to that total this season.

Pataskala
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RE: $533 Million in dead money. This is what is wrong!

Posted: 11/5/2021 12:19:44 PM

The "P" schools are under a lot more pressure to win so they're more willing to drop the ax sooner than G5 schools are. Dare to say that if Ohio was a "P" school, Albin would've been gone a month or so ago.

Reminded me of the baseball player (Don Baylor?) who had a deferred compensation deal with the Orioles that paid him for five or six years after he left for another AL team. Nothing like paying somebody who's in their prime to play against you. At least with the coaches most of the buyout payments end when they find a new coaching job.

We will get by.
We will get by.
We will get by.
We will survive.

OhioCatFan
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Member Since: 12/20/2004
Location: Athens, OH
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RE: $533 Million in dead money. This is what is wrong!

Posted: 11/5/2021 1:46:34 PM

Pataskala wrote:

Frank received the difference between his OHIO salary and his Nebraska salary for about this first three years in Athens, so Nebraska was paying both Frank and its new coach for that period of time.

The only BLSS Certified Hypocrite on BA

"It is better to be an optimist and be proven a fool than to be a pessimist and be proven right."

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mf279801
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RE: $533 Million in dead money. This is what is wrong!

Posted: 11/5/2021 2:12:43 PM

Pataskala wrote:

l
Reminded me of the baseball player (Don Baylor?) who had a deferred compensation deal with the Orioles that paid him for five or six years after he left for another AL team. Nothing like paying somebody who's in their prime to play against you. At least with the coaches most of the buyout payments end when they find a new coaching job.

I mean, yeah, that seems counter productive or absurd on its face, but the team agreed to it because they get it was better for them, from the perspective of managing their cash flow and/annual payroll, to spread those payments out over a longer period. No different than a car loan, mortgage, or payment plan for an expensive vacation

I don�t feel bad for any school that is paying one or more coaches not to coach for them. If Kansas, Auburn, whoever didn�t want to be paying these buyouts, the solution is simple: let your coach coach out the duration of his contract. That�s what you agreed to: you coach X years for an average of Y dollars/year. If we want to replace you before that, we�ll have to pay you Z dollars. If you leave to coach elsewhere instead, you�ll owe us Z dollars. The school committed to spendinf this money over such and such a time frame. That they decided they wanted to hire another coach on top of that doesn�t relieve them of their commitment to the prior coach

giacomo
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RE: $533 Million in dead money. This is what is wrong!

Posted: 11/5/2021 7:42:32 PM

We have no business buying anyone out of their contract. We lose money on athletics. If these other schools want to throw money away, I would hope alums would refuse to donate. I certainly would.

Pataskala
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RE: $533 Million in dead money. This is what is wrong!

Posted: 11/5/2021 8:15:22 PM

giacomo wrote:

We have no business buying anyone out of their contract. We lose money on athletics. If these other schools want to throw money away, I would hope alums would refuse to donate. I certainly would.

It's often the donors who pressure the AD to get rid of a coach, to s point where some donors at some schools have ponied up the cash to buy out a coach's contract.

We will get by.
We will get by.
We will get by.
We will survive.

Ohio69
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RE: $533 Million in dead money. This is what is wrong!

Posted: 11/5/2021 9:24:40 PM

Universities haven�t lost a dime on athletics. They know exactly where they spent it. All of it. And why. And determined it�s all worth it. Including this click bait $533 million. If it wasn�t worth it, many of them would stop. Boards are filled with smart / successful/ connected people. Virtually none have stopped. Not Stanford. Or Vanderbilt. Or Duke. Or the flagship top publics in red or blue states. Not Ivys. Nor D3 Little Ivys� When it�s no longer worth it, they�ll stop.

😎

Can somebody hit a pull up jumper for me?.....

Bobcat Love's Sense of Shame
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RE: $533 Million in dead money. This is what is wrong!

Posted: 11/6/2021 9:26:28 AM

Ohio69 wrote:

This is correct.

But as it's become the norm at the P5 level, it's begun to trickle down to G5 teams, for whom it is not worth it.

giacomo
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RE: $533 Million in dead money. This is what is wrong!

Posted: 11/6/2021 9:50:00 AM

Then you�ve just proved it is not an amateur operation by any means.

OhioCatFan
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Location: Athens, OH
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RE: $533 Million in dead money. This is what is wrong!

Posted: 11/6/2021 10:00:10 AM

giacomo wrote:

Then you�ve just proved it is not an amateur operation by any means.

I agree with this, and eventually the courts are going to agree once a ripe case is litigated. Then watch for legal issues involving tax exempt institutions running pro athletic operations and threatening the parent institution�s tax-exempt status. Coming to a federal court near you in due time.

Bobcat Love's Sense of Shame
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RE: $533 Million in dead money. This is what is wrong!

Posted: 11/6/2021 10:16:15 AM

OhioCatFan wrote:

giacomo wrote:

Then you�ve just proved it is not an amateur operation by any means.

The Federal Government has allowed tax exempt institutions like hospital systems and religious organizations to run as obvious, for-profit organizations for decades. It's unclear to me why paying college players is the bridge too far.

This just seems like a thing people who are afraid of change say to argue against change. It's far from a certainty that paying players changes tax exempt status. Tax exempt status is driven more by industry than the day-to-day operations, and so long as organizations adhere to certain key tenets (not issuing/accruing equity for executives, investing profits back into the org) there's no real reason to think the status will change.

Last Edited: 11/6/2021 10:36:58 AM by Bobcat Love's Sense of Shame

OhioCatFan
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RE: $533 Million in dead money. This is what is wrong!

Posted: 11/6/2021 10:44:03 AM

Probably the first step will be to apply the Unrelated Business Income Tax (UBIT) to the football operations of those schools that actually make a profit -- the Elite P5 schools. Then it will go down hill from there...

Ohio69
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RE: $533 Million in dead money. This is what is wrong!

Posted: 11/6/2021 11:31:31 AM

giacomo wrote:

Then you�ve just proved it is not an amateur operation by any means.

How? (Asking seriously.)

UBIT tax won�t stop the P5. They�ll just pay it and keep going.

Last Edited: 11/6/2021 11:33:43 AM by Ohio69

Can somebody hit a pull up jumper for me?.....

Pataskala
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RE: $533 Million in dead money. This is what is wrong!

Posted: 11/6/2021 12:27:22 PM

OhioCatFan wrote:

giacomo wrote:

Then you�ve just proved it is not an amateur operation by any means.

Wouldn't the tax exempt issue only be a problem for private schools (ND, BYU, BC, etc.) and not state schools? If so, that's a pretty small segment of college athletics.

We will get by.
We will get by.
We will get by.
We will survive.

giacomo
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RE: $533 Million in dead money. This is what is wrong!

Posted: 11/6/2021 1:13:13 PM

Not sure how it will happen, but likely the top of the P5 will ultimately revolt. Alabama�s starting QB gets a few BBQ sandwiches in his NIL deal while Saban hauls in 10M. It�s just a matter of time, regardless of the top down tax status.

Chris Galloway
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RE: $533 Million in dead money. This is what is wrong!

Posted: 11/7/2021 11:43:08 AM

it is an "amateur" operation in this sense: none of the people spending and losing this money and racking up debt have anything on the line. they are all salaried bureaucrats. if it were a business, ownership would be making tough decisions because it's their money. their loses. their debt. think Cleveland Indians. yes, fans get annoyed, but the Dolans are running it as a business and they limit spending, work within a budget, etc.

college athletics is the worst model because it's capitalist competition being managed by central planners and bureaucrats whose only motivation is to keep their jobs and benefits coming - so they are willing to sell the farm and take loses and rack up debt, because it's not their personal liability.

who is ultimately going to pay for gross financial mismanagement? the students. the state. ultimately taxpayers. (i know private universities are different, but most are state institutions).

Go Bobcats!

Ohio69
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RE: $533 Million in dead money. This is what is wrong!

Posted: 11/7/2021 1:28:22 PM

Why is this fiscal mismanagement? Universities have decided, very publicly through their action and continued support of Athletics that these are legitimate expenditures in terms of recruiting students, retaining students, university reputation, and student, community, alum and donor engagement. At most if not all universities the spend is likely a small % of overall budgets. Like 2-3-4%. The students, alums, communities, and donors expect positive results/experiences and when not delivered request changes fully knowing contracts will be �bought out� and the costs involved. Calling it dead money sure gets clicks I guess. It ain�t perfect. Just like no other industry is perfect. When it works, it can permanently change the trajectory of a university and community/region (Uconn, Virginia Tech, Gonzaga, etc). Or, provide waves of enrollment, engagement, donations, improvements, national awareness, etc. (Cincinnati, Coastal Carolina, and even OU at times). The students, athletes, and members of the public who are not interested in the model have plenty of other options. If there are areas of higher education or a community that someone thinks needs to be improved, by all means go advocate for that. But attacking Athletics means the focus in on Athletics, not those areas�. Anyway� I sure must have needed to rant, eh?. Awesome fall day in Southern Ohio� time to stop ranting and get outside�.

Can somebody hit a pull up jumper for me?.....

giacomo
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RE: $533 Million in dead money. This is what is wrong!

Posted: 11/7/2021 5:47:08 PM

You make some very good points, and I agree with most. The caveat is the institution. It works at the top of the P5, but not at Ohio. If we were experiencing sold out Peden and Convo games and getting enrollment improvements, maybe. Being the only game in the region we should have more interest from the students and townspeople, but for some reason we don�t. If it weren�t for the student fees, where would we be? I still maintain we have no business buying out a coach. If we play at Peden the same time OSU plays on TV, we lose. Unless we have some deep pocket donors picking up the tab, and maybe we do.

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