Insiders use the college bowl system to loot American universities

Insiders use the college bowl system to loot American universities
Jennifer Silverberg

The summer sun glints off the Caribbean as the Majesty of the Seas, a luxurious 12-deck ship with nine bars and a topside pool, docks at a private island called CocoCay in the Bahamas. Guests hug the railings and look out at a paradise stocked with palm trees, tanned masseuses, bars full of rum, and sumptuous white sand beaches.

The deck is crowded with college football bigwigs: Pete Garcia, Florida International University's executive director for sports; Florida State athletic director Randy Spetman; and Kirby Hocutt, then the University of Miami AD. Also present are more than three dozen colleagues from Missouri to Mississippi to Duke, all with spouses in tow.

And this NCAA who's who looks happy not just because of the sun; they're all enjoying this luxury cruise for free.

Bill Hancock, executive director of the BCS, defends the college bowl system.
Bill Hancock, executive director of the BCS, defends the college bowl system.

More accurately, they're taking a vacation on the backs of the students and taxpayers who subsidize an outrageously crooked college football system that culminates in January with the Bowl Championship Series (BCS), including Miami's Orange Bowl on January 4.

The Orange Bowl is a rat's nest of corruption and waste, critics say. Ostensibly a nonprofit, the South Florida organization that runs the game was named last year in a complaint to the IRS for spending $535,000 on gifts, $40,000-plus on golf outings, and more than a million bucks in salary for its top executives, all while giving only a fraction of the cash the festivities earn back to local charities.

"To claim that items like this Caribbean cruise are 'business expenses' for a nonprofit is just a ridiculous abuse of the taxpayers' trust," says Matt Sanderson, an attorney who heads the Playoff PAC, the anti-BCS group in Washington, D.C. that uncovered the questionable expenses.

Bowl execs argue that Sanderson's numbers are inaccurate and that the game brings millions of dollars to South Florida while helping local youth football leagues. "It's really unfair to pull numbers out of a line-item form without context and accuse the Orange Bowl of misspending its funds," says Larry Wahl, the bowl's vice president for communications. "We give much more to the community than shows up in our nonprofit reports."

But spending aside, there's an even larger problem with the Orange Bowl and its ilk such as the Fiesta and Sugar bowls: Thanks to a corrupt system lubricated with tropical cruises and huge bonuses, games bleed struggling public universities by forcing them to buy tens of thousands of tickets at absurd markups — all so a needless middleman can make millions.

This scheme plays out across the nation each year on the ostensibly pristine fields of amateur athletics. Bowl executives grant themselves breathtaking salaries — some more than $600,000 per year. The games, meanwhile, provide coaches, athletic directors, and the suits who nominally supervise them with an unending stream of bonuses.

Everyone else picks up the tab.

There's a reason cities hosting the Super Bowl or rounds of March Madness bid with buffets of giveaways to land the tourist traffic: If you want a taste, you have to pay.

College football is the only sport that gives away its postseason revenues. The business model is akin to Walmart keeping its profits for the first ten months of the year and then letting Target pick up its holiday sales.

This is an especially hazardous form of capitalism for the nation's universities, which have been bloodied by ever-diving state funding combined with double-digit tuition hikes. And contrary to popular belief, their athletic departments just widen the damage.

Depending upon the year, only about 20 of the 120 athletic departments featuring Division 1 football actually pay for themselves. The rest require students and taxpayers to ride to the rescue.

The racket works like this: Through required purchases of anywhere from 10,000 to 17,500 tickets, schools essentially pay for the right to appear in a bowl. The bowls keep the ticket and sponsorship money. Bowl execs also negotiate their own TV contracts.

After taking 50 to 60 percent off the top, the bowls then write checks to the teams' conferences. The conferences, in turn, split that money among their schools. (Profits from the five BCS games are spread to varying degrees among all conferences.)

But only about half of the 35 bowls offer payouts large enough to cover team expenses. So the conferences use money from more lucrative bowl games to cover losses from the barkers.

"You don't lose money going to bowl games, at least not in the Big 10," says Andy Seeley, a spokesman for the University of Minnesota, whose football team won't be headed to a bowl this year after suffering through a 3-9 season.

But that's true only in a technical sense. In one case involving Minnesota — a 2009 trip to Tempe's Insight Bowl — the Big 10 covered the university's million-dollar loss. (The school had to eat $476,000 in useless tickets and then paid $542,000 for airfare and thousands more for food and hotels.)

What insiders don't mention is the humongous pyramid of cash that schools are leaving on the table. "They should go take Economics 101," says Dan Wetzel, a Yahoo! Sports columnist and co-author of Death to the BCS. "Lost profit is lost money to any other business in the world."

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12 comments
j50wells
j50wells

Also, I get tired of these sports announcers that try to make us feel guilty for complaining about the current system. I hear it all the time from these guys, "Oh, here it comes, complaints from a team that thinks they should have a got a Bowl bid. Obviously they didn't make the BCS bids. So stop complaining!" When the real truth is that they rigged the games for their pocket books and not for the teams or the fans. The sports announcers are part of the racket because they defend the corruption and keep it quiet in order to protect their careers. C'mon man, what are you trying to sell? A sport that doesn't have a playoff? Are you serious? We're supposed to buy this garbage?

j50wells
j50wells

This won't end next year. I already see corruption in next years committee that will pick the four teams that will play in the play-off. Condoleezza Rice? What? This smells of corruption. It will be the same people playing the same insider tricks. And why do people buy into this stuff? Why would anyone watch a game that doesn't have a true playoff? That's where the real issue is. It starts with the fans. If you agree to watch a game that doesn't require a playoff and a true champion, then that's what you will get. It's really basic stuff, and pretty simple.

joblow2000
joblow2000

money 


money 


money  $$$$


70-90% of college sports budget comes from Football/basketbal.  

Anyone paid money to see a table tennis match.

if you know nothing, know about the money.. it all about the money in college sports.

keep the money $$$$, flowing, the only people exploited are the """"student -athletes""" who do NOT get a single penny to play.

biggest scam in USA.  Free workers/free labors. All you got give them is Free chicken/Fee dorm/Free pass to class/Free pass to library...

Mikoe Wozz
Mikoe Wozz

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Lbilquist
Lbilquist

More abuse from people in power. It's criminal the amount of money these bowl execs make off the back of mostly poor minority football players. Why don't the NAACP or ACLU look into this!!

Mark
Mark

They need to take away the tax exempt status of the bowls since they do not really serve a charitiable purpose.

edgough123
edgough123

Why doesn't everyone just "Occupy" these games. College football is a loaded gun and stacked with fraud. Until the government, IRS starts to bring these thugs down, there will be no mercy. As seen at Penn State, they will abuse your children, lie to authorities, steal your money, and if you are real lucky, they will haze your kid and if he/she is lucky she just might survive. What the fuck is up with school these days. Kids take a few years off and travel the world - go to a school in Europei. You end up with too much college debt in the U.S. and pay into these Ponzi schemes to enrich the administration/coach "thugs".

Kpryan
Kpryan

Oh, and one last thing:

Why did it not surprise me to read this paragraph: "The coaches smiled, the bowl's anthropomorphic fruit mascot Obie danced, and Jeff Roberts — a local vice president of Goldman Sachs and the bowl's chairman — gave the company line."

It is shocking - SHOCKING to think that a 'Goldman Sachs local vice president (emphasis on the 'vice' word) is affiliated - no indeed the CHAIRMAN! of one of these rip off bowl games.

Kpryan
Kpryan

Terrific article.

While not taking away from the reality as reported, it should be noted that of the ubiquitous 'Athletic Directors', the article states: "(The A.D.'s).... they're not inclined to get too inquisitive over contracts. And this allows their so-called friends to utterly rip them off."

The AD's are as culpable as the school presidents and the rest who suck off the system. The AD's aren't 'getting ripped off'. The dollars aren't coming out of their pay. Check out what the average AD earns per year. Coaches make millions of dollars a year, and presidents make a half million dollars a year and the AD's earn around a quarter of a million. No one earning that kind of pay is getting ripped off by anyone.

Rather, all (except the players and the fans) are getting rich off the bullshit system. That's why no one (with a few notable exceptions ... see Chris Petersen @ Boise St. [who probably wouldn't say anything if his team were playing for a national championship] ) will yell: "The emperor wears no clothes!"

It is disgusting.

And still the schools act as if paying the players a Grand a month would send the schools into banko court. It is OK to screw the fans with rising prices to attend games and the screw the players but God forbid someone associated with a Bowl or an employee of a university gets ripped off. Until they do, this fraudulent system will continue to burn those it claims to serve.

MiamiDanny
MiamiDanny

Disney/ESPN paid $500Million for 4 years of the BCS. That is $25Million PER GAME! The so-called losses you are talking about are chump change.

GILMORECLARETHA
GILMORECLARETHA

So what else is new everybody that is connected with government,school charities and etc finds a way to get over on the taxpayers,If there were no taxpayers there would be no extra free rides on the taxpayers back.

 
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