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March 14, 2000

The Carr Study: To Do Or Not To Do The Football High-Wire Act At USA?

brennan.jpg - 18176 Bytesby Tom Brennan

On Thursday, February 24, at a public meeting held in the University Center, Carr & Associates presented their long-awaited study to a full house. When the meeting began the audience was in a buoyant mood, expecting really good news, but as the meeting wore on, a number of somber facts took much of the festive air out of those expectations. True, Carr & Associates did recommend that University of South Alabama (USA) advance from 1-AAA to 1- AA status, but not without stating some very important caveats.

It appear to me that Carr & Associates made the recommendation to proceed toward acquiring 1-AA status not because there’s any real evidence yet that football at the University will prove to be a viable sport but because, in the limited scope of their report, they found that USA, as a developing university “with its expanded emphasis on institutional advancement and creative partnerships with its constituents for the future,” has demonstrated in a short span of time that it is now “positioned to achieve new levels of excellence and recognition.” And thus because USA has “positioned” itself so advantageously, “the Consultants conclude that adding football is consistent with the overall institutional advancement of the University of South Alabama and recommends that the University begin the process.” If one can stand the odor of such flatulent rhetoric, the cheerleading proclivities of Carr & Associates amounts to nothing more than -- “hey, fellows you’ve done pretty well over a few years, so get with the football program!” It is true enough that the University has done quite well in a short period of time, but hey let’s give credit to where it’s due and not much of it is due to those who are currently leading the university. Though the Mitchell name on the Mitchell Center casts a dark shadow over it, guess whose statue stands in the lobby of the Administration Building!

About the limited scope of the Carr Report: Reporters at the Mob.Reg. in repeatedly calling the Carr Study a “Feasibility Report,” have done their best to misrepresent the actual content and purpose of the report. It is definitely not a “Feasibility Report,” and Carr & Associates shrewdly never said it was. William Carr III says in his letter to Mr. Gordon Moulton, USA president, which prefaces the report, that the report is, as its title states, a study of “Consideration for Football at the University of South Alabama.” Absent from those “considerations” is an assessment of “the potential financial support for USA Football from the campus and external communities.” Carr & Associates did, apparently, rely on the data about the potential of the market given to them from the University. I take it Carr is referring to the highly speculative market analysis of Professor Semoon Chang, and apparently the Consultants give little credence to it because they state in their most salient recommendation that the university hire a reliable consulting firm to “conduct the comprehensive level of support from all sources for USA football.” Put simply that means: “check and see if there’s any real money out there.” The real work to assess this big unknown has yet to be done.

What the Carr Report has in it are a lot of considerations that more or less indicate what might have proven successful at other institutions, especially at the University of South Florida in Tampa. These considerations are pretty well summed up in the Executive Summary; the rest of the report is mostly boiler plate taken from Carr & Associates data bank developed from similar studies Carr has done in the past. Carr’s report is meant, as the letter says, “only to assist the administration in its decisions as to the feasibility of Football at the University of South Alabama. That assistance preeminently includes the recommendation quoted above that the university have a real feasibility study done, i.e., a report that assesses the potential of the market to produce external funding.” The decision “as to feasibility” must wait upon the findings of the real market-analysis report. Moreover, the consultants’ final recommendation that USA begin the process of adding football is a contingent recommendation. The process of adding football should start only “if a formal Market Assessment reveals that there is sufficient support forthcoming in new external revenues for football (including those from the City and County of Mobile) which, when combined with the internal resources of a potential increase in student fees and the current level of institutional support, will provide adequate funding to justify the move.”

The thumbs up could, in other words, turn into thumbs down, if the market-feasibility report turns out bad. But even supposing that it does turn out good. What does that really mean? It means among other things that in the Greater Mobile Area there are sufficient numbers of people with deep pockets who could provide major gifts for football at USA if they’re so inclined to provide big money for that purpose. I focus on the major-gift donors because they are crucial to the success of the program and because the major-gift-donor problem is potentially the most disastrous problem facing the program. You can spot all the geese who can lay golden eggs, but you can’t make them lay those eggs. Doubtless, the market analysis will confirm what we really suspect, namely that there are a sufficient number of deep pockets. So the real problem will be one of extracting the golden eggs from the nests. The Carr report warns:

“Prior to advancing to 1-AA/1A football, it is advisable to establish a threshold requirement for private fund raising as an expression of tangible support from the community. These gifts would provide the original “working capital” for the football initiative. According to officials at other universities that have added football recently, such contributions were the key factors in making possible their success in establishing a viable football program.’

I may be mistaken but I believe that the Carr Report is saying with this admonition that it is not enough to count the birds in the bush. Those birds are not birds in hand until they have signed checks in the hands of the program. USF wisely counted their golden eggs only after they hatched and if the process gets to this stage, USA would do well to follow USF’s example.

The “threshold requirement for private fund raising” for USF was established in 1991 to be $5 million. From 1992-1997 one-time gifts totaling $5.5 million were successfully solicited from 50 donors, coming in increments of $50k to $1 million. The $5.5-million reserve provided support for (1) start-up capital and operational funding; (2) for a scholarship endowment necessary to field a competitive team; and (3) for capital construction of an Athletic Training Center. So USA can expect at least five years devoted to an intensive fund-raising campaign before the groundwork capital is in hand, assuming, of course, that the campaign is successful. However, as USA trustee Pat Linsay pointed out today’s market is not the same as the one USF started with in 1992. The “threshold requirement” for USA could be as much as $15 million. Be that as it may, the Carr report puts the figure at $8 million to $10 million. The Mob.Reg. quotes Carr as saying, “You are looking at roughly an $8 million shortfall in the first six years.’ ‘Large gifts to allow the program to gets its feet on the ground are necessary. Based on what we have shown hypothetically, $8-to-$10 million is a reasonable number” (Feb. 25, 2000). Whether 8 or 10 million, the figure is probably a conservative estimate and that means for USA to meet its threshold, at least $100 donors will have to be found with some few giving a $1 million or more.

Jack Brunson, Chair of the USA Board of Trustees, is upbeat; he doesn’t believe that the Greater Mobile Area lacks a tradition of giving; he believes it lacks a tradition of asking? Maybe so Jack, but trying to squeeze a little extra tax money out of County taxpayers is, as we all know, like trying to squeeze blood out of a stone. But maybe large gifts will be easier to get. Judging by the way business and industry in the City and County have reneged on their sums-in-lieu payments to the School System in Mobile, I wouldn’t expect to get much by holding out a tin cup in that direction (See Edmund Tsang’s article elsewhere in this issue).

USF’s football feasibility study that all agree is the model to follow came into being “on the heels of a successful capital campaign (more than $100 million raised) and during a period of stability at the university.” So, Jack, now that you and your fellow football boosters on the Board of Trustees have decided to spend $60,000 for a real feasibility study, you had better get busy initiating that tradition of giving because you’ve got some real work to do if you decide to go for it. Don’t forget you’ve another problem too. The current situation at USA can hardly be said to be a stable one. Asking people for football money might strike them as just a trifle frivolous given all the other needs. And you’re internecine warfare with the USA Foundation hasn’t help the University’s image either. That squabble has doubtless alienated a portion of the big donors who might have been inclined to support football if the Trustees and higher administration had been making some serious efforts to raise capital instead of stubbornly and fruitlessly trying to gain control of the USA Foundation in order to suck off money for football.

Aside from alienation among potential big donors, there’s the problem of finding enough ordinary folks -- around 5,000 in today’s market -- willing to buy season tickets at $50 per seat for a program that may never materialize. They will have to be persuaded to pay pledge money now to establish a seating priority when and if the program ever gets off the ground. But even if the major donors and enough common folks can be found for gifts and ticket pledges, those gifts and pledges won’t cover an anticipated shortfall. In addition to the initial $10 million start-up costs, Carr & Associates’ pro forma spreadsheet projects the total cost of adding and advancing football over a six-year period will not produce a net profit for USA. “In fact, the net loss in the first year of 1-AA competition is $1,614,777 even if USA generates $1,325,000.” In any event, the pro forma spreadsheet shows that should USA opt for football, it is faced with the monumental task of generating nearly $1 million in the first year of competition. The report warns that “if the revenue does not increase to the required level, the addition of football will prove nonviable and the financial losses will be considerable.”

But the USA Board of Trustees and its football boosters still have one more card to play -- the City-of-Mobile card. Mayor Dow has repeatedly assured all and sundry that the City of Mobile will do everything in its power to assist in the creation of a football program at USA. Surely the City will find the financial breach to offset shortfalls in revenue. But so far our big- hearted Mayor has said nothing about giving sums of taxpayers’ money to USA. He has only promised USA will have the use of Ladd-Peebles stadium, sans mud puddles, and it’s not clear yet if that gift horse is rent-free. Carr’s project of revenues from Ladd-Peebles includes $500,000 from skyboxes that don’t exist yet. (Well, since the fat cats need skyboxes to do business in while they’re watching the games, maybe they can sit in the skyboxes at the Mitchell Center.) Before going for it full bore, the USA trustees should nail down the Mayor to get something concrete out of him. That may not be anywhere near enough given that there’s a major financial crisis looming on the horizon. The Mobile County School System, that perennial fly in the ointment, has been warned by the state that if it is to avert financial disaster “the school board must trim $7 million from the 2000-1 budget and should keep another $8.5 million in reserve in anticipation of less funding” (Mob.Reg., Feb. 24, 2000). The warning came from Robert Morton, Assistant State Superintendent for Finance with the Department of Education. Will the Mayor and Council be willing to funnel funds into USA’s fledgling football initiative while standing by as the school system’s administrative structure is flushed down the toilet? School board members are talking loudly about the need to slash administrative positions at Barton Academy.

Assuming that the real Feasibility Report commissioned on Feb. 24 by USA Board of Trustees -- the $60,000 one -- finds favorable conditions in the market, what will the trustees actually do next? Will they simply turn over responsibility for the successful implementation of the fund-raising campaign to Joe and Mike Gottfried, a few other football drum majorettes from the ranks of the alumni and the Board of Trustees, and a mixed bag of local media hacks? In short, to save money, will USA do it on the cheap by relying on local talent that hasn’t got what it takes to carry off an endeavor that even in best of circumstances requires superior competence and leadership? Should a football task force be formed (USF formed a 50-person task force) of the best people available, it will still have to push a huge rock up a rather steep hill. Right now -- judging from the way football has been hyped hysterically on campus and in the local media -- the force to move the rock looks puny and amateurish.

Besides all the other difficulties involved in fund raising, there’s another factor involved in giving that Paul Griffin, Director of Athletics at the University of South Florida, takes note of, and that is that “financial support usually only follows the emotional bond developed between the program and those who will build the foundation.” The “emotional fabric” factor is especially crucial in the Greater Mobile area because fan loyalty has long been preempted by Auburn and Alabama. USF spent the first two years launching their program by building what Griffin calls the “emotional fabric of the program.” That is, the program organizers spent the first two years cultivating an emotional bond with key people in the Tampa area building the foundation of the program with their major gifts and their ticket pledges. People won’t give money unless they’re emotionally committed to you. You see the problem? To cultivate the loyal support of the masses in lower Alabama, measurable in dollars contributed, will require some nifty palaver on the part of some really adept silver-tongued devils. What little emotional fabric exists now is threadbare woven mostly out of wishful thinking. Sports reporter, John Cameron, a confirmed loyalist, points to the 3000 plus-or-minus attendees at USA’s club football game as evidence of “vision” and as evidence of real interest in football at USA. Tell it to the bank, John! If attendance at the Jaguar-Cajun basketball game recently is any indication, sports loyalty at USA and in Mobile does not yet run deep. Those delegated to weave the emotional fabric will need to be exceptionally fine artisans to produce a net that will catch the big fish and the little fish.

On Friday, Feb. 25, the day after the USA Trustees decided unanimously to take the step recommended by the Carr Study, namely to do a market analysis, the Mob.Reg. headline read: “Jaguar Football A Step Closer.” The decision to do the market assessment may be either a step toward or a step away from football depending on the findings of the study. An accurate determination of revenue generation is, as the Carr Report says, “the key to the entire effort,” and the results of that determination could mean that USA shuts the door on football until the local revenue climate improves substantially enough to demonstrate that a football program is viable not just for one or two years but for years to come. Whenever performers in a high-wire act take risky steps across an abysmal depth that could spell disaster, they require not only consummate balance and skill but also a taut wire to balance on. Putting aside the question of competence, in the matter of the football high-wire act (Division 1-A status), a taut wire for the program requires that those who tend to the tautness of the wire do it unflaggingly and creatively year after year because each succeeding year of the program will bring new and higher costs, and if the wire sags even for a fraction of a moment, the performer may be doomed to a sudden death, i.e., to a financial debacle within the institution.

If the football partisans on the USA Board of Trustees are wise, they will look carefully at the way the chips fall from the feasibility study they have commissioned. If those chips don’t show unequivocally that football is a viable program, they should drop it immediately. If the report is favorable, they’re home free and they can happily allow that 900-pound gorilla to climb on their back. I look forward to the spectacle of the performers carrying that gorilla as they attempt to traverse a high wire that never reaches the other side. But once he and the rest begin pacing that wire, for sure, Trustee Mayer Mitchell’s attention span better not wander.

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