Friday, May 08, 2009

Hofstra Looking to Leave the CAA?

It started out innocently enough as an article from New York Newsday's Steven Marcus - a brief, 201-word report, quite frankly, not reporting on much.

The headline read: Hofstra explores parting ways with the CAA, and mostly offered the writer's opinion, a cryptic official comment, and an unquoted anonymous source.
Hofstra will explore moving its intercollegiate athletic program out of the southern-based Colonial Athletic Association, persons familiar with the athletic program said Thursday.

Hofstra did not say what has prompted its exploration, but it appears the university would prefer to have more of a northeast profile. The Atlantic-10 is Hofstra's first choice, those close to the situation said, but no openings currently exist in that New England-based group.

...

Hofstra apparently has no interest in returning to the America East.

``We have not had any conversations with representatives from the America East Conference regarding conference affiliation,'' Hofstra athletic director Jack Hayes said in a statement. ``That being said, conference affiliation is a subject that all institutions review on an ongoing basis. The growth of our institution and its athletics program dictates that reviews of this nature take place.''

It might have passed completely under the radar to a lot of fans - but soon afterwards the New York Post had their own report on the matter. Like the Newsday report, it's brief (under 200 words) has a heaping amout of columnist opinion (from writer Lenn Robbins), and only has one official voice talking about it (also cryptically) - Hofstra men's basketball coach Tom Pecora:

Calls to Atlantic 10 commissioner Bernadette V. McGlade were not returned by early evening.

By joining the Atlantic 10, Hofstra and Fordham would become instant rivals. Fordham's lack of progress in improving facilities and its overall inability to succeed in most league sports has left the A-10 without a visible presence in the metropolitan area. Hofstra could provide that.

"We have all the resources here at Hofstra to compete at the highest levels," Hofstra basketball coach Tom Pecora told The Post. "I think there are a lot of things Hofstra would bring to the Atlantic 10."

What in Long Island Iced Tea is going on here?

Forget a moment the dubious claims made by the sportswriters (that the A-10 is a league with a "northeast profile" when it has Xavier, Dayton, and UNCC among its members, or that Fordham and Hofstra would become "instant rivals" when as recently as ten years ago they refused to play each other in anything). Is the fact that two different school officials are sending feelers out into the media meaningful?

Specifically,
The Atlantic-10 is Hofstra's first choice, those close to the situation said, but no openings currently exist in that ... group.

Is this the canary in the coal mine that the long-awaited Big East/A-10 shake-up is about to happen? And if so, how does that affect the Patriot League?

*****

The media reports about Hofstra sure come at an interesting time in Big East history - ten days out from the first-ever Big East Meetings without founder Mike Tranghese at the helm. Incoming commissioner John Marinatto will be presiding in those meetings:

"We'll be meeting [May 17-20] in Ponte Vedra [Fla.],'' Marinatto said. "We usually have our football meetings in August, but we also take a day [in the spring meetings] for football.

This also comes on the heels of Paterno's musings in the media that the Big Ten should consider expanding with Pitt, Rutgers or Syracuse and having a Big Ten Championship game. To an incoming commissioner in a league who already lost Virginia Tech, Boston College and Miami (FL) to the ACC quite recently, those words have no choice but to be taken seriously - even if Big Ten commissioner Jim Delaney tamped down those expectations quickly and folks opined why Notre Dame, the most logical 12th team for the Big Ten, wasn't included. (That's not Marinatto's only headache either, with the Gator Bowl reportedly hesitant to take the 2nd-placed Big East team next year.)

As big as these questions are, there's a bigger one. Namely, with a brand-new incoming Big East commissioner, what better time would there be for the football-playing schools to announce they're breaking off to become a new conference - or for a new commissioner to be strong-armed by them into expelling the non-Big-East playing schools?

Admittedly, it's a big assumption. But not out of the realm of possibility - and if it happens now, this month, the effects will cascade throughout athletics sweeping change through the CAA, Atlantic 10, Patriot League, America East, and NEC.

Split?
If a basketball/football split were to occur in the Big East, the base conferences would start out looking like this:

Football: Louisville, UConn, Cincinatti, South Florida, Pitt, Syracuse, Rutgers, West Virginia.

Basketball: Georgetown, Marquette, Villanova, Providence, Notre Dame (Football Independent), Seton Hall, St. John's, DePaul.

Both leagues would immedately need to expand, especially in basketball.

The top four targets for football expansion for Big East Football would probably be (my guess, in no particular order) Memphis, East Carolina, UCF and Ball State.

But no matter how you look at it, a new basketball conference would probably name either Temple, St. Joe's, Xavier or Dayton in their top four teams for basketball expansion - in other words, a possibility of four teams from the A-10 - and a bare minimum two of those teams.

While any shift in the MAC/Conference USA in the FBS world would have its own ramifications, should the A-10 lose even one team they won't want to wait on getting a replacement - and now Hofstra has come out front and center and said they'd be interested, but there's "no room at the inn". But what if room becomes available at the inn - suddenly?

Still with me?
Let's be conservative and say that "Big East" basketball takes Xavier and Dayton, the new A-10 takes Hofstra and Drexel (and UMass doesn't join the MAC as a result of the new opening in that FBS conference). Let's also assume that Hofstra will need a new home for its non-Atlantic-10 sports, since Hofstra wouldn't be welcome in the CAA anymore for that purpose.

What about the Patriot League for football?

No team fits into the Patriot League footprint better, located within three and a half hours of all league members. Seven football league games would be bus trips for the Pride, and with close out-of-conference schools like Stony Brook, Columbia, and Wagner close by they could really cut down on travel costs. (Add guarantee games with UConn, Temple, Rutgers, Syracuse, Boston College, and you're even in better shape.)

They'd also be similar to Fordham academically - they're a small, private institution, right in the institutional footprint with a very good graduate program.

If they're keen on getting a basketball rival in Fordham, you'd have to believe in the Patriot League they'd also be keen on a yearly local football rival too with the Rams - probably played the weekend before Thanksgiving.

It's a given, though, that the football program that Shuart built would have scholarships - no downgrades here. But therein lies the rub - the Patriot League doesn't offer football scholarships, and is in the middle of a painful debate as to whether to allow them during an economic downturn.

*****

Let me offer a hypothetical here. Maybe it's crazy talk, but hear me out.

What if Fordham, a member of the A-10, saw something shifting in the wind in their own league? What if they saw an opening to join at the hip with future leaguemate Hofstra - and saw that the future with Hofstra involved football scholarships?

What if, as a result of this conclusion, Fordham saw Hofstra as a potential club member in the Patriot League in football - but only in a Patriot League with football scholarships, which they want anyway due to the new academic index?

What if Fordham decided to force the football scholarship issue with the Patriot League - deciding that they have nothing to lose? Best case they end up with Hofstra in the Patriot League with full scholarships. If that doesn't work out, they'll either join Hofstra in the Big South, NEC or some other conference, or alternatively end up somehow in the CAA with full scholarships to "replace" Hofstra. In nearly all of these scenarios, Fordham wins.

It's a theory that happens to fit all the facts. But it sure would explain an awful lot.

*****

I don't know if any of this stuff is true or not. Perhaps Hofstra's move to the A-10 is just a pipe dream cooked up by an overambitious basketball coach and some bored sportswriters. Perhaps Fordham's motivations have nothing to do with the Big East and a future affiliation with a Hofstra which is leaving the CAA.

But if there is any hint of truth to these rumors, I would hope that the Patriot League office would be ready to allow scholarships - to allow for this expansion with Hofstra, and (just as importantly) to keep Fordham in the fold.

Losing Fordham would be bad - but losing Fordham and missing out on an opportunity to get Hofstra would be much, much worse. It's the difference between having eight stable league members and league with six members wondering who they possibly could expand with next to replace a member who elected to move to what will be considered "bigger and better things".

Wednesday, May 06, 2009

More (Patriot League) Credit Crunchiness

Summer blockbuster season is already here, and it's a time for sequels like the new Star Trek and Night at the Museum movies. But here at LFN there's also a sequel about something no college sports fan wants to contemplate: the credit crunch around the Patriot League, which I talked about quite a bit last month.

In that blog posting, I had mentioned that Lafayette "seemed to be doing fine" from all outward appearances. But nothing could have been further from the truth, as reported by Michael Duck and Genevieve Marshall of the Morning Call:

Lafayette College, Easton's biggest employer, will slash budgets, freeze salaries and cut back on building projects over the next four years because of the economic downturn and a dwindling endowment, college officials announced this week.

''Over the next four fiscal years, the college plans to decrease its operating budget by roughly 10 percent, or approximately $11 million,'' college President Daniel Weiss wrote in an e-mail to staff, faculty and students.

Lafayette has also put in some extremely strong austerity measures - while president Daniel Weiss has given himself a symbolic 5% pay cut, their University community faces a salary and hiring freeze this year and even potential non-compensated leaves of absence and "retirement incentives".

The reason for this is the shrinking of Lafayette's endowment due to the credit crunch: since June 2007, it's dropped 30% to about $540 million (from a high of $800 million) dollars. Interestingly, in the Morning Call article it was revealed that Lafayette relies on their endowment for 25% to 30% of their operational budget annually, which in retrospect left Lafayette exposed.

In light of this information, areas of the memo that Lehigh president Alice P. Gast sent out in February take on new meaning:

The economic conditions are not affecting all people and institutions uniformly. Those universities having substantial endowments supporting their operations are the hardest hit in the short term. There are institutions where endowment income funded nearly half of the operating budget. Lehigh University's endowment earnings are spent very conservatively and fund less than 15 percent of our operations. The majority of our budget is supported by revenues from tuition, auxiliaries, gifts and grants. Thus, Lehigh's immediate economic situation is stable and we must plan carefully to ensure that it remains so. I have noted that Lehigh's prudent financial stewardship has served us well, and I continue to be grateful to our Board of Trustees and their predecessors for their wisdom.
That's not to say Lehigh is out of the woods entirely - not by any stretch of the imagination. Any school relying on any endowment, from Harvard to the tiniest institution, is still feeling the crunch. In the world of athletics, Lehigh reportedly chopped $250,000 from the annual budget:

At Lehigh, which has 25 varsity sports and competes in the Patriot League, athletes on the volleyball, field hockey and soccer teams will return to campus only a few days before dormitories open, instead of a full week. The change will save the athletic department about $20,000 in room and board.

Joe Sterrett, Lehigh's athletic director, trimmed $250,000 from his budget. He said he was also concerned about a potential decline in the number of athletes who attend the university's sports camps, which bring in as much as $900,000 each summer.

There are other things that may have been taken for granted, but suddenly are chopped out of the budget for all sports at Lehigh: smaller travel squads for away games, reducing pre-season expenses (as seen above), and reducing the amount of print publications. On the football side, Lehigh is extremely fortunate to have seven home games this year and only two bus trips out of the state during the regular season (one to Colgate, and the other to Fordham), so the effect on the football program might be more limited than it otherwise might be. But make no mistake - football is not exempt from the belt-tightening.

[UPDATE: Holy Cross also undertook some austerity measures as well, including voluntary retirement programs, suspension of some construction projects, and the scheduling of some "guarantee games" in basketball to help fund the athletics program. In the communique, Holy Cross announced a budget shortfall of $3 million dollars for the 2010 fiscal year. Interestingly, they were directly hit by one of the banks in the center of the financial storm: Wachovia:

On September 29, 2008, Wachovia, the trustee of the Commonfund Short-term Fund (which is used by about 1,000 tax-exempt institutions) announced its intention to close the fund and begin liquidation in an orderly manner. Holy Cross had about $27 million in the Commonfund at that time. To date, the College has received approximately 80% of its investment back in the form of cash. The remaining 20% is in high quality investments that the Commonfund believes retain value at or close to the carrying value in the fund. In the meantime, we have identified other sources of cash to compensate for the reserves still tied up in the Commonfund.
Tough stuff.]

*****

The financial environment all over higher education is one of nervousness and intrigue - a sense that "all bets are off". The schools with the biggest endowments, like Stanford, Harvard, Duke, et. al. - have responded to their decline in endowments by issuing bonds to, in effect, sell off their debt:

Top U.S. universities, whose endowments have been hit hard by fallout from the global financial crisis, are selling bonds to raise money to shore up their financial positions.

Stanford University became the latest top university to sell taxable debt to make up for recent losses in its endowment, the third largest of any U.S. university.

Stanford on Thursday sold $1 billion worth of debt in a sale led by Goldman Sachs, JP Morgan, and Morgan Stanley.

The combination of shrinking "income" from endowments, and more generous financial aid packages have made institutions come up with new, innovative ways of getting income - like these bond issues. But expenses are also rising. To take an example, Georgetown has seen similar undergraduate admissions numbers from last year, but also has seen a spike in requests financial aid, undoubtedly due to students finding themselves in different financial situations. Equal admissions plus more need for financial aid equals more money spent by schools - that's definitely affecting things.

Even so, the Detroit News cautions people in regards to final admissions numbers:

"There's a huge wild card this year called the economy," said Kathy Orscheln, director of admissions at Eastern Michigan University. "These are tough choices for families to make. I'm not sure any of the old rules apply."

While the number of applications and admitted students is up this year at Eastern and other public universities, Orscheln is not cheering yet.

"In any other year, we would say that looks pretty good, and we can expect our (enrollment will) be healthy for the fall and probably up from last year. But with the ... economy, I'm not sure we can count on that."

Friday is the national enrollment deposit deadline that many colleges use as a gauge for their fall headcount, but typically students can still enroll or change their minds through the summer.

Jim Cotter, admissions director for Michigan State University, expects more admissions decisions will be made in this summer, as parents wait to see what happens with their jobs, economy and tuition increases.

While the subject of the article are public institutions, the air of uncertainty certainly is the same for private schools as well - maybe even more so since the amount of money involved is generally higher.

Despite the gloom, to some there is actually a silver lining: giving among the "top 20" schools actually has increased. Holy Cross also saw an increase in alumni giving despite the economic downturn (and, possibly as a result, announced recently that they were going to fund more scholarships in sports other than football). This was also true at Fordham, who recently announced a whopping $500 million alumni donation initiative to "fund more scholarships" and fund more academic chairs.

In some ways it seems like Fordham is forging forward with pretty big plans while seemingly ignoring the financial realities being talked about in coffee shops all around the country. If they can do it (and, possibly, fully fund 63 scholarships for their football team and play football as an FCS independent), bully for them - but you can't help but raise an eyebrow at how much this is going to require in fundraising.

On the other end of the spectrum, Bucknell called for a "review of merit aid and Athletics" after noting in their board of trustees meeting that "most institutions within the Patriot League are offering a more extensive merit aid program than Bucknell is via its programs in men's and women's basketball." While it's a long-range initiative, the question ought to be asked: might the result of the study be to increase merit aid within the existing forumla, to go to scholarships instead in a range of sports - or, perhaps, to disband some programs that are cost-prohibitive in terms of any sort of aid?

Meanwhile, as reported before, Colgate is looking for a new president as building infrastructure projects have quietly been put on hold.

******

It's a strange landscape out there for the Patriot League. Money is tighter, expenses are higher, and even in a league with small, private institutions all seven football-playing schools seem to be facing the challenges in very, very different ways. From Fordham's "full speed ahead" to Holy Cross' "go-ahead-with-schollies-but-also-cut-back" to Lafayette's "total recession mode" to Lehigh's "austerity program" to Bucknell's study on athletics - time will tell who will navigate the rough economic seas the best of all.
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