Sitting on Jerry Strom’s desk is a copy of an email from a Big Ten Conference school to a mid-major Division I men’s basketball program, offering a six-figure guarantee to play a game next season.
“That’s our competition,” said Strom, who is in charge of scheduling for the University of Iowa. “Everybody has to decide, ‘What’s our limit?’ ”
Even as the current basketball season winds down, colleges are working behind the scenes to nail down their 2012-13 schedules — and the cost of scheduling the right opponent for the right date is on the rise by as much as $40,000 a year.
A survey of Big Ten and Big 12 conference schools by The Des Moines Register found that a majority of them — seven Big Ten colleges and six Big 12 schools — paid more than $400,000 to schedule a handful of guarantee games this season. Iowa and Iowa State were among those spending that much to cover guarantee costs for their basketball schedules.
As schools are positioning themselves to get into this month’s NCAA Tournament, the quality of the opponents that schools are buying for these nonconference games is magnified — even though little public attention is paid to the rising costs. Critics say that spending is another sign of athletic departments being out of touch with the overall mission of the university. However, colleges in major conferences often counter that no public money is being used because their athletic departments are self-supporting.
NCAA bids provide program prestige and a financial windfall for conferences receiving multiple bids. Strength of schedule and victories are part of the formula, and that’s where guarantee games — games in which one school pays another a guaranteed amount of money, with no return date required — become important. The Register’s study shows Big Ten and Big 12 basketball teams had a 90-2 record in guarantee games this season.
“The costs for guarantee games has been trending up ever since I got in this profession 20 years ago,” Iowa State athletic director Jamie Pollard said. “I thought the same thing back then as I do now — I wish it were not the case, but I understand to some degree it is the cost of doing business.”
Ohio State, Texas lead Big Ten, Big 12 spending
Ohio State had the Big Ten’s deepest pockets when scheduling for this season, paying an average of $95,666 for six games, according to the Register’s survey, which was made in accordance with open-records laws.
The Buckeyes paid $110,000 to Valparaiso University — a school with 23 victories the previous season — for a game in November. Ohio State paid five opponents $90,000 or more.
“There is some concern on these costs, but the importance of home games is still crucial to funding our athletic department and the 36 sports we support,” said David Egelhoff, Ohio State’s director of basketball operations. “There is a ‘cost of doing business’ factor in securing guarantee games, and the marketplace has a huge role in that. If we want to try and go cheap on teams, they will just look elsewhere.”
“Those decisions are made by each institution,” said Brad Traviolia, the Big Ten’s deputy commissioner. “We certainly notice (the cost of guarantee games), and it’s a topic of conversation when our schools get together. But it’s something each school acts independently on, how they utilize those guarantees to develop their schedules.”
Iowa spent $413,000 for five guarantee games. That money — and $180,000 for scheduling multi-team events — came out of the school’s basketball budget, which is $3,739,033.
Iowa athletic director Gary Barta said the rising cost of guarantee games is “absolutely concerning.”
“Scheduling is difficult, and it’s challenging,” Barta said. “The more we can control it, the better chance we have of putting together a very competitive schedule, a schedule that is exciting to our fans and makes sense financially. And that’s what we’re trying to do.”
In the Big 12 Conference, Texas led the way by paying an average of $93,000 for each of its five guarantee games. The Longhorns paid at least $90,000 for every guarantee game.
“It just goes back to individual schools’ philosophies,” said Big 12 associate commissioner John Underwood, who oversees men’s basketball. “We’ve tried to encourage our schools to play a competitive schedule, because it benefits all of us” if more teams get into the NCAA Tournament.
Iowa State spent $420,000 to offer opponents guarantees for five games at Hilton Coliseum. That money — and $130,000 for scheduling multi-team events — came out of the school’s basketball budget of $3,618,243.
Critics fret, but others see no harm in spending
Costs are escalating, on average, about $5,000 per game each season according to those involved with scheduling. These growing costs are a concern to the Knight Commission, an organization committed to making sure athletic programs operate within the educational mission of their institutions.
“We are concerned about the escalating operational costs of major college sports whether the rise is in game guarantees, coaches’ salaries, recruiting or another area,” said Amy Perko, executive director of the Knight Commission. “The bottom line is that the increases in all those areas have resulted in athletics spending per athlete increasing at twice the rate of academic spending per student.”
Athletic spending often requires money from a university’s general fund, according to Perko, because most athletic programs don’t generate enough revenue to cover their expenses. Iowa and Iowa State have self-sufficient athletic departments that don’t rely on public money.
Jay Bilas, an ESPN college basketball analyst, sees no harm in the high-stakes guarantees.
“If you don’t want to play, then don’t pay it,” said Bilas, who played and was an assistant coach at Duke and holds a law degree from the university. “The market should dictate all that. There’s so much money in the game now. There’s no reason that if a big shot needs a game, a BCS school, that a smaller school shouldn’t take advantage of it. If you don’t want to pay, fine.”
Charles Clotfelder, an economics professor and author of “Big-Time Sports In American Universities,” said the decision to increase the amount of money for nonconference games is based on a simple reality.
“It is to get a win because that is good for your postseason prospects,” said Clotfelder, who is also at Duke, a school whose basketball team has been in the NCAA Tournament 27 of the past 28 years. The only teams in the Register’s study to lose guarantee games this year were Kansas (which lost to Davidson) and Texas A&M (which lost to Rice).
Clotfelder, whose book asserts that big-time athletics are now a core function for large universities, said that increased spending to schedule basketball games is no different from any other kind of spending by colleges and universities.
“There is an old saying that in higher education, institutions will raise as much money as they can, and they will spend everything they can get,” Clotfelder said. “You shouldn’t talk about these departments as free-standing franchises because, in reality, they are part of universities. And they are acting like every other part of the university.”
Big schools, little schools: Who has upper hand?
Major conference schools like Iowa State and Iowa look for several types of games — guarantee games against non-league teams they can beat, games that will help develop their team, and home-and-home agreements that include no guarantee money. They also have to schedule enough home games to generate an acceptable revenue stream because in many athletic programs, football and men’s basketball are the only revenue-generating sports.
But mid- to low-major programs use the revenue from these games — which often include incentives like tickets and hotel rooms — to fund their programs. At Central Michigan, for example, coach Ernie Zeigler’s program made a total of $260,000 to play at Minnesota, Nebraska and Iowa State this season.
“We play three guarantee games to offset and supplement our budget,” said Zeigler, in his sixth season at the Mid-American Conference school. “I have it in my contract that we have to play two. I play one more, just so I can get that money and be able to do things and be competitive from a recruiting standpoint, salaries, those kinds of things.”
The reason for the escalating costs has become a hot-button issue.
“There are some folks out there right now that, in some cases, are holding teams hostage,” said Reggie Minton, the deputy executive director of the National Association of Basketball Coaches.
The cost to schedule guarantee games escalates in the spring, when schools are hustling to fill open dates and low- to mid-major teams hold out for the best deal.
“The number gets out of whack in the spring,” said Jeff Rutter, Iowa State’s director or basketball operations. “When teams are in scramble mode, supply and demand doesn’t work in a school’s favor. They’re paying more. And teams get more if they want to hold out.”
Coach Fran McCaffery has seen scheduling at all levels as he’s climbed the coaching ladder, from Lehigh to North Carolina-Greensboro to Siena and now Iowa. At Greensboro, he was required to play a certain number of guarantee games to fund his program. At Iowa, the cost of those games put a dent in the budget.
“I think it’s the worst part of this profession, and it’s unfortunate,” McCaffery said. “I would prefer they put it in a computer and say, ‘This is who you’re going to be playing and be done with it.’ But that’s not going to happen.”
Valparaiso lost its game at Ohio State by 33 points but went on to win the Horizon League championship. Athletic director Mark LaBarbera called the $110,000 from Ohio State a budget-enhancer.
“It provides some additional resources we can put back into the basketball program to do some things and make some strategic decisions to make it better,” LaBarbera said.
How did the $110,000 payout come to be? The Buckeyes were still trying to fill the date in mid-August. Ohio State’s Egelhoff knew that playing Valparaiso wouldn’t hurt the Buckeyes’ NCAA resume, and would appeal to fans.
“Since they held the bargaining chips and we faced the choice to pay or not have a game, we went ahead and paid more that we typically do,” Egelhoff said. “It was out of necessity to secure the deal. Otherwise we lose out on the money we would earn from the home game and the revenue that comes along with it.”
But LaBarbera disagreed with the notion that Valparaiso had bargaining chips.
“They could have played anyone,” LaBarbera said. “I’m sure they could have found some other schools that would have rearranged their schedules for that amount of money. I would have happily told Ohio State, ‘Hey, we’ll play you home-and-home and you can give us less money.’ But that’s a difficult conversation to have with them.”
Creighton University coach Greg McDermott calls the rising cost of guarantee games “ridiculous,” but acknowledges the complexities facing colleges.
“Once you allow yourself to be bought, then everyone knows you’re willing to do that,” said McDermott, who has also coached at Iowa State and Northern Iowa. “It all goes back to the TV contracts, and the money that is available, and the value that is placed on a home game. Paying $70,000 for a home basketball game sounds like a lot. But if the net, at the end of the day, is between $250,000 and $500,000, that’s a small price to pay.
“I remember when I first started at Northern Iowa. We were paying $20,000 to $25,000 and that was only 10 years ago. It’s really escalated. Who knows where the end is?”
Category: Iowa Hawkeyes men's basketball