Money makes football go 'round
CORVALLIS — Life as a college athletic director is rarely boring. Scott Barnes never has to worry about finding things to do.
The third-year AD at Oregon State and I sat down for a podcast last week, running the gamut of subjects involving his work and his school. Much of our discussion was about money and the funding necessary to keep OSU alive and kicking in the arms race that is the Pac-12.
Some of the issues we covered, with Barnes' comments and my thoughts:
• The completion of the west side of Reser Stadium.
The east side was finished in the $80 million "Raising Reser" project of 2007. It's spiffy, with premium and suite seating and dining and bar areas — like a Power Five football facility should look.
The west side is a different story. It has remained largely unaltered since Parker Stadium was opened in 1953. The press box is the worst in the Pac-12. In a recent radio interview with John Canzano, Barnes referred to Reser's west side as "a crumbling asset."
"It has deferred maintenance issues," Barnes told me. "In terms of fan experience, it's not there."
OSU officials are moving through a feasibility study as they prepare to get serious about the west side project.
"We're working really hard and are further along than we've been in getting to the west side," Barnes said. "Ultimately, we look forward to renovating that."
Barnes said a three- to-five-year period "would be a target." Cost of the project is estimated at $175 million -- more than twice that of the east side.
Funding will be contingent on philanthropic gifts and premium seating revenue along with a public/private partnership of some sort. Barnes envisions a multiuse facility that "could be used 365 days a year" and would benefit not just the football team but "the entire student body, our campus community and beyond," with the possibility of "some health-care components."
Comment: Barnes was hired largely off his reputation as a capable fundraiser. The completion of Reser will be the biggest challenge of his career. There is no "Uncle Phil" to write a nine-figure check. He'll have to rely on networking and collaboration with hundreds of individuals and groups. It's not going to be an easy sell, but it has to get done, not just for the fan experience but for recruiting — the lifeline of any college football program.
• Funding of Oregon State's football program.
A recent Equity in Athletics Disclosure Act (EADA) report indicates Oregon State ranked last among Pac-12 schools in funding football. Barnes said part of that is the manner in which each school reports its spending.
"Over the years, Oregon State has put a lot of expenses into the administrative bucket," Barnes said. "There are about $5.5 million of expenses placed there that are directly attributable to football, things like equipment, team meals, facilities and debt service. For the sake of transparency in the future, we'll move (those figures) into the bucket it should be in — football."
OSU's annual athletic department budget for the 2019-20 academic year is $83 million, and 29 percent goes to football. The school is paying Jonathan Smith $1.9 million, less than the $2.6 million Gary Andersen received in his final full season at OSU. But Smith is a first-time head coach — and they're simply not going to make as much money. Barnes more than made up the difference by paying Smith's assistant coaches a total of $4.47 million, considerably more than the $3.6 million Andersen's aides received.
The recent $47 million renovation of Valley Football Center gives Oregon State one of the better football coaching facilities in the Pac-12. Barnes said it recently was named one of the top 25 facilities of its kind in the country. The athletic department is spending $4 million for an upgrade of the Sports Performance Center, where the strength and conditioning staffs with all sports do their thing, but it's especially important for football. Construction will be completed by January. "It's going to be a game-changer for us," Barnes said.
Said the OSU AD: "We're laser focused on four things in building and sustaining excellence in football — recruiting, scheduling, continuity in our coaching staff and facilities. We are working mightily in making progress in those areas."
Comment: Smith would like more support — but what coach wouldn't? I think he realizes the parameters with which his school is working.
Oregon State's support of its athletes isn't as gaudy as that of, say, Oregon. Never will be. But it has improved dramatically in recent years. As Barnes navigates the financial minefield ahead, he'll up the ante, noting the importance of football's success on the other athletic programs.
"It's the rising tide that moves all boats," Barnes said. "It's our biggest opportunity to gain revenue for all of our programs. All of our coaches are rowing the boat in the same direction. They all want to see football succeed."
Football, of course, must do its part by 1) being competitive with its Pac-12 brethren, 2) winning games and 3) going to bowl games. Last Saturday's 52-7 shellacking by Utah at Reser Stadium isn't going to cut it.
• Selling football tickets.
Season-ticket sales this season stand at 13,605, down significantly from the figures during the Mike Riley II era (2003-14). The peak came in 2010, after Riley's teams had back-to-back years in which they went into the Civil War needing a win for a Rose Bowl berth. Season tickets were at 24,908 that year. Sales have decreased by about 45 percent in the less than a decade since.
Attendance has dropped, too. From 2008-13, Oregon State had five years in which it averaged at least 42,000 for home games. OSU has not had a winning season since then, and that has taken its toll at the gates. Over the past five years, home attendance has averaged no higher than 37,000 in a season, and the Beavers are at less than 32,000 for the first four home games this year.
Barnes points to lower attendance as a national issue.
"In 2018, four of the five power conferences saw a drop in attendance," he said. "The days of season-ticket renewals at (the 2010 level) probably won't happen again. We have to look at things differently."
Part of the problem, he said, is that "Generation Z" (under 24) and millennials (25 to 39) "are consuming the product differently," Barnes said. "We have to be adaptable. We're continuing to understand their habits of purchasing and consuming. They want connectivity when they're at the game. You have to create social spaces. There's a different way to do this. We have to be the best social gathering in town, not just the product of good football."
Comment: Attracting younger fans is essential to the future of college football. I get that.
But there are a lot of other important factors here.
In the case of the Pac-12, two things loom large: 1) night games and 2) not announcing kickoff times until between six and 12 days before the game.
Except in Arizona, fans don't like night games, period. It's especially problematic in Corvallis, Eugene and Pullman, Washington, where population bases are an hour and a half to two hours away. That pushes the drive home after a game into the wee hours of a morning. Simply doesn't work.
Barnes is sympathetic, but "we're trying to balance start times that are baked into the current TV contract and the fan experience. If we were to take out some of those night games, TV revenue would go down significantly. So there's a balance between maximizing TV revenue and the fan experience. It's a really hard recipe."
People want to plan for a game time, and I'm not talking six or 12 days ahead. They prefer to know at the start of the season what the game times are. It's just another contributing factor to fans deciding to drop their season tickets after so many years.
I understand that television pays a lot of the bills, and that's why the game times are set at such a late date. But the Pac-12 Network payouts to each school have been much less than expected when the conference signed the deal eight years ago. The network generated about $2.75 million for each of the league's colleges last year. Big Ten schools, for instance, received four times as much.
Commissioner Larry Scott never was able to sign a deal with DirecTV, which hurt. And the Pac-12 contract doesn't come up for renewal for another five years.
"We don't see any significant growth in our own TV deal or Pac-12 distributions until '24," Barnes said.
I've always wondered why it's so important to have 7 and 7:30 p.m. starts. Sure, some fans want to watch football that late on TV, but on Saturdays, they'll watch games at any time. And a 7 p.m. start is 10 p.m. in New York, Boston or Philadelphia, too late to capture an East Coast audience.
The high cost of game tickets is another factor. The average for a nonpremium seat this season at Reser is $73, and it gets way beyond that when you include premium-seat licensing, parking and so on.
If Oregon State fields a winning football team, more people are willing to make the drive to Corvallis and watch a game. If not, they'll stay at home with the remote in hand, watching games on TV from the comfort of their home at the cost only of their cable (or DirecTV) bill.
• California's "Fair Pay to Play Act" has caught the attention of players (or "student-athletes," in NCAA nomenclature), administrators and fans across the country.
The bill, which doesn't go into effect until 2023, will allow college athletes to be paid for the use of their name, image and likeness. Schools will not pay athletes, but athletes will be allowed to hire agents and seek business deals.
Barnes, like many college athletics administrators, is not on board with the bill. He points out that many other states are now coming out with similar legislative proposals.
"To try to manage that in any equitable manner is impossible," he said. "Then you think about managing this at the federal level. We would much prefer the 'federal level' be the NCAA than Congress."
Barnes worries about greater avenues to cheating in recruiting.
"Recruiting wasn't thought about at all," Barnes said. "(With the best players), there's a bidding war, and you have donations disguised as endorsement money. Those dollars can be astronomical just because a donor in that market lands (at a certain school). Those are the things that become unbelievably concerning.
"We are here to provide a world-class education. We aren't here to provide a living for them. That comes later. We need to do more for our student-athlete, but let's do it under the auspices of the NCAA and tether it to higher education."
Comment: Sportswriters throughout the country have come out in support of this bill, and have unloaded their wrath on the NCAA and schools for reaping all the profits from intercollegiate athletics while the athletes "get paid nothing." They rail on the seven-digit salaries of NCAA President Terry Emmert and the likes of Scott.
I say "hear hear" to the last point, and I'd add the names of FBS football and many Division I basketball coaches, who are making obscene money. Alabama football coach Nick Saban is being paid $8.7 million this season. Duke basketball coach Mike Krzyzewski will pocket more than $9 million during the 2019-20 campaign. Good lord.
I've often suggested we halve the salaries of all of these coaches and then trim the ticket prices in half, making attending a game more affordable for the working class. I know — that has as much chance as the NBA cutting its schedule to 41 games. But you get what I mean.
I get that California's bill wouldn't mean more expenditures for colleges, and it would be nice for college athletes to have more opportunity to capitalize on their success from a financial standpoint. But I would worry about it making it easier for donors — through "endorsement contracts" — to entice athletes to sign with their schools.
And let's be fair — college athletes aren't getting "nothing."
An in-state full scholarship to Oregon State is now worth $28,000; an out-of-state full ride is $47,000. Athletes who redshirt get five years of school paid for. In-state, that would be valued at $140,000; out-of-state, $235,000.
Athletes' medical care is covered while they're playing in college. Then there are the cost-of-attendance stipends that were enacted in 2015, the intent to help an athlete cover incidentals and out-of-pocket expenditures. Nationally, the annual figure per scholarship athlete ranges from $2,000 to $5,000 a year. At Oregon State, it's at about $3,500. It's not a lot, but it's certainly not nothing.
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