Longform

Insiders use the college bowl system to loot American universities

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.

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.)

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Tim Elfrink is a former investigative reporter and managing editor for Miami New Times. He has won the George Polk Award and was a finalist for the Goldsmith Prize for Investigative Reporting.
Contact: Tim Elfrink
Pete Kotz