Tuesday, June 18, 2013

Straight Talk from Doug Fullerton about the "Illusion of FBS Opportunity"

I understand that most Lehigh fans (and, for that matter, Patriot League football fans) don't get into the constant, 365-day-a-year ebb and flow of the goings-on in college athletics, let alone stuff on the divide between the FCS and the FBS.

However, I do.  Probably because I'm insane, but I do.

When the commissioner of the Big Sky Conference Doug Fullerton posted a Q&A session, and followed it up with a Twitter Q&A, though, I paid very close attention.

These types of events are generally of the hit-or-miss variety - sometimes it's a weak effort to highlight, say, the fact that a "conversation" was held about "membership", or some other amorphous, read-anything-into-it-you-want statement.

Not so, however, this time around.

What made this particular interchange so extraordinary was its candidness, and Doug's overall vision of collegiate athletics.  Mr. Fullerton laid it all out there - and, in the process, gave a vision of what may be the future of FCS, FBS, Division I - everything.

If you're by nature a pessimist, there's been a lot to be pessimistic about in regards to this offseason in regards to FCS.

Georgia Southern and App State, with their combined nine FCS and I-AA national championships, are off to the Sun Belt to compete in low-level FBS.

Old Dominion, one of the most financially successful FCS schools in their four short years in the subdivision, also left for Conference USA.

While the moves were mostly motivated by the all-consuming maelstrom that has consume Division I athletics, with Conference USA and the Sun Belt being raided and needing to replenish their membership, the fact remained that three hugely successful programs left the subdivision this offseason, leaving people to wonder about the future of the FCS.

It's in this atmosphere where Mr. Fullerton defined, in no uncertain terms what his conference is, and in turn, what the FCS is.

Q: The last three years have been turbulent for conferences. The Big Sky added the likes of Southern Utah and North Dakota as full members, and Cal Poly and UC Davis as football affiliate members. Why do you think the Big Sky so far has been able to survive a raid by other conferences?

A: Our presidents have a deep understanding of the industry. They understand the difference between real opportunity and “the illusion of opportunity.” We have discussed the landscape at nearly every meeting we’ve had in recent years. When the opportunity came to move quickly to add affiliate football members and gain stability, the presidents were ready to move.
First of all - talk about a gutsy question to answer.  Think any other official conference communication would have actually mentioned the words "survive a raid by other conferences" in it anywhere, let alone a direct question the commissioner was to answer?

Not only that, Fullerton comes out with a - let's just say it - a ballsy response to a ballsy question.

 "The Big Sky presidents understand the difference between real opportunity and the illusion of opportunity."

Context is important here.  Fullerton's not saying this statement in response to, say, a school leaving - he's saying this after the Big Sky absorbed four of the five schools of the former Great West two years ago (Cal Poly, UC Davis in football only, Southern Utah and North Dakota in all sports) and saw Montana say "thanks but no thanks" to joining the WAC moments before it fell apart.

Certainly, with the WAC trying to pry Montana and Montana State from the Big Sky, Fullerton is no stranger to realignment winds.  And, too, he was on the front lines in regards to the "illusion of opportunity" with the WAC vs. the strength in FCS of the Big Sky.

But I don't think anyone thought he'd actually articulate this in a formal Q&A session.

Wait, though.  It gets better.

Q: The Big Sky has long been one of the top Football Championship Conferences. Other marquee programs such as Georgia Southern and Appalachian State are leaving FCS to join the FBS. Do defections like those, and rumors of other programs looking to jump give you concern about the future of FCS?

A: We are indeed concerned. Every indicator tells us that the institutions that make the move to the fourth quadrant of FBS - that is where they will all most certainly move to - are going to win less often and spend more money for that privilege. Yet, they insist that the neighborhood change will somehow make them a better institution. 
And there it is: the dirty little secret, out in the open, about FCS programs moving to an FBS conference.

Fans and coaches of  Sun Belt, MAC, and Conference USA teams would love for people to believe their conferences, which they call FBS, are identical to the Big 10, Pac 12, or Big XII, whom are also called FBS.

Yet as Doug Fullerton points out, they're not.  He - and other commissioners and school presidents in the biz - thinks of FBS as "quadrants", or subdivisions inside a subdivision, if you will.

You can think of "quadrants", in effect, as "money subdivisions", based on the amounts of spending in question.

"First Quadrant" teams, are the ones whose athletics departments are - by my measure - spending more than $70 million on their athletics departments.

There are two interesting things to note about this "quadrant".

First, not all of these are schools that one might think of as "self-supporting".

It doesn't take rocket science to see Texas, Alabama and Notre Dame in this quadrant, but it might surprise some to see schools like Virginia, North Carolina, and Louisville in with this quadrant - three athletic departments that couldn't balance the books without some form of athletic subsidies.

The other interesting note is that no single conference contains all "first quadrant" teams.  For example, Texas is, but not all of the members of the Big XII are (for example, Texas Tech). Alabama and LSU are, but not all members of the SEC are (for example, Mississippi State).  Michigan is, but not all members of the Big 10 are (for example, Purdue).

Texas Tech, Mississippi State and Purdue are all "Second Quadrant" teams that spend $50 million to $70 million.  In this grouping there are some pretty surprising names, too - like Arizona, Cal, Virginia Tech, and UConn.

These athletic departments are also very large - just not as large as the "first quadrant" teams - and vary wildly in terms of the use of subsidies to balance the books.  Some, like UCLA, have only about $2 million of subsidy in $66 million of total expenses.  But nearby UNLV, whose expenses are $60 million, are entirely dependent on the largesse of student fees and fund transfers from the school - to the tune of $32 million.  UCLA could probably get by without their subsidies.  Not so UNLV.

While life in the second quadrant may not be all the wine and roses it would appear, the "third quadrant" is pretty much led by Boise State and a host of programs whom would also probably not survive without those student fees and institutional support.

Most of these programs are members of Conference USA (Memphis, Houston, East Carolina), or Mountain West schools (Air Force, San Diego State), but also some you might not expect: Washington State of the Pac 12 ($40 million), Kansas State of the Big XII ($46 million), and Ole Miss of the SEC ($47 million).

Not all of them have subsidies of $10 million or more, but the great majority do.  While there's nothing wrong with having subsidies like this (as long as it's OK with the students and parents footing the bill), it does effectively show that there are no "third quadrant" teams whose athletics revenues take in more than their expenses, when you take out the support.

Finally, Fullerton's "fourth quadrant" comes into play - which comprises of all the members of the Sun Belt and MAC conferences, as well as a few of the smaller members of Conference USA (UAB, Marshall) and the Mountain West (Wyoming, Colorado State).

With only one or two exceptions, athletics subsidies for these schools are over $10 million apiece, and in the great majority of cases the subsidies comprise more than half of the overall athletic budget.

There's nothing wrong with that, of course - unless you're entering FBS with the illusion that you're in some financial league way closer to the "first quadrant" instead of the teams of the FCS.

He continues:
They will fund their programs in very predictable ways. Those institutions are not able to move to a conference that is able to support the move financially, nor are they able to tap into an untapped media resource. They will either play more “money games,’’ or they will ask for more allocated income from their students or their president. The money game road has proven, for every school that has tried it, to be a sure method to destroy even the most solid programs. So that leaves them with securing more allocated funding from their universities. It almost always comes down to those options. Given the widening gap separating the five top conferences financially from the rest of FBS, whatever they are chasing is going to only become even more unattainable and more expensive in the future.

Getting into the "fourth quadrant" from the FCS requires a whole lot of startup costs, including some you might not expect.

One of the schools jumping from the FCS to the FBS is Old Dominion, and one of the first things they need to do is to sign two checks: one to the CAA for their exit fee of $250,000, and one to their new conference, Conference USA, for their entrance fee of $2,000,000.  Thought Conference USA was going to pay any of Old Dominion's fees for joining the league?  Um, no.  And we're not waiving the entrance fee, either.

This is before they've even begun to ramp up to a higher number of football scholarships, make mandated stadium improvements, or spend more money on guarantees for home games - something that president John Broderick anticipates to be an increase of $2.5 million annually - or more.  Those visiting locker rooms need new 100 inch plasma TVs, a brand-new weight room, and saunas - that's conference policy.  Help to pay that eight-figure bill?  What are we, made of money?  Sorry, ODU, you're on your own for that one.

So how do "fourth quadrant" teams fund these start-up costs for FBS?  Either by asking the students to pay for it, either through credit fees or direct university payments, or by playing more "money games", which means playing more road games against "first quadrant" teams for big bucks - at the expense of more losses, and potential diminishing interest in the football program.

According to Fullerton, it's a "sure method to destroy even the most solid programs".

If such statements came from two fans talking over beers at Buffalo Wild Wings, that's one thing, but coming from the commissioner of an NCAA conference - that's gutsy.

But wait.  There's more.

Q: There has been a lot of speculation about the power conferences pulling away and forming a new level of Division I football. If that were to happen, where do you think the Big Sky would fit if the structures were to change in coming years?

A: One of the basic problems of governance within the NCAA has always been that the subdivisions as defined do not match the natural financial “break points” within the membership. Currently, there are some 20+ [First Quadrant] institutions making money in a net earned income sense. With the recently negotiated media contracts in the top five conferences soon to take full effect, that number will move to about 60 or 70 [First and Second Quadrant] institutions. All of those institutions, save for a few independents, will be in those top five conferences. I actually encourage them to look at a new level for football (let’s call it Subdivision IV). It might add some sanity to our membership. 

In short: "Go ahead, First and Second Quadrant.  Break away from the NCAA".  Think about that for a second.

Continuing:
They (Subdivision IV) could run an NFL-type schedule with divisional champions and a playoff  at the end of the football season. Of course, there would be headaches for that top group as well, as they may very well not look much like an academic enterprise under that model. However, I don’t worry about them leaving the NCAA in all sports, as, the day after they depart, they would have to form a new NCAA. They would have to run some 80+ championships and implement some enforcement mechanisms. I don’t think they want any part of setting those up. Plus the basketball tournament - as well as some others such as baseball, ice hockey, and track and field - would lose much of the cache they have earned over the years, without the participation of the non- Subdivision IV leagues. However, I would argue that a football break has basically already occurred, why not codify it? As I’ve stated before, I believe the Big Sky is in a perfect position to compete at the second-highest level of Division I football, whatever that may be in the future.
At this point, is Mr. Fullerton channeling his inner Ross Perot here?

He's basically saying something that fans and sportswriters have been saying, basically for at least the last decade, or even longer - that not all of FBS is created equal.

He doesn't tiptoe around this fact - in fact, he says, "since a football break has already occurred, why not codify it?"

He knows, you know, I know, the FBS really is multiple subdivisions already, quadrants, or whatever.  Not all FBS schools are treated the same - the Bowl plus-one playoff recognizes some conferences (Pac 12, SEC, etc.) as effective autobids to the playoff, and those some conferences pay money to the other conferences (Sun Belt, AAC, etc.) to limit their access.  Isn't that, effectively, at least two subdivisions of FBS, or a "football break", in Mr. Fullerton's words?

So, he welcomes the notion that the top tier break away, confident that whatever would remain, the Big Sky would be in that top flight - with the Mountain West, AAC, Sun Belt, MAC, and whichever conferences are competing at that level.

He details some of those challenges for a top tier breakaway, too, saying that the first thing that "Subdivision IV" would need to do is to make their own version of the NCAA, which is absolutely true.

About the only thing Mr. Fullerton left out is the moment they try to form their own version of the NCAA, they'll lose their tax-exempt status as not-for-profit organizations.  Lawyers would get rich, but at a bare minimum making their own NCAA would be costly, and subject to a level of scrutiny that Fullerton doesn't "think they want any part of setting those up."

I've never read this type of straight talk anywhere like this.

*****

I'd encourage anyone to read the whole interview with Mr. Fullerton - especially if, at any time, you start to get any lingering doubts about the long-term viability of FCS, or that somehow FCS would be left behind in the case of a break of the upper quadrant of FBS.

There's a lot more to explore, too, in terms of quadrants and the schools of the FCS and FBS, too - which I'll be doing later this week.

But don't expect Mr. Fullerton, or the FCS schools he represents, to be fooled by the "illusion of opportunity".

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