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Thread: "Candidates" for next Chancellor: Athletics/Football friendly?

  1. #16
    There's plenty of academic literature that concludes that football (and more broadly, intercollegiate sports success) success does not correlate to increases in unrestricted donations to the University. There is some weak evidence that increased intercollegiate success leads to an increase in restricted giving (i.e. sports-only donations).

    Winning and Giving: Football Results and Alumni Giving at Selective Private Colleges and Universities
    Objective. Our central question is how changes in an institution's football success affect giving behavior. Also, we consider whether former varsity athletes are more or less sensitive in their giving behavior than other alumni to the competitive success of their school and whether such effects differ by type of institution. Methods. Using micro data from 15 academically selective private colleges and universities, the analysis presents fixed-effects estimates of how football winning percentages affect giving behavior. Results. General giving rates are unaffected by won-lost records at the high-profile Division IA schools and at the Ivy League schools. Increases in winning percentages yield modest positive increases in giving rates, particularly among former atheletes, at the lower-profile Division III liberal arts colleges. Conclusions. While there is a modest positive effect at Division III colleges, our results do not support the notion that winning and giving go hand-in-hand at the selective private universities that play big-time football.

    The Relationship Between Sustained Success and Donations for an Athletic Department with a Premier Football Program

    Anecdotal discussions regarding donor contributions to athletic departments have long placed considerable emphasis on the success of the departmentsí athletic programs. Among the most visible sports is football. The purpose of this study was to explore one high profile athletic departmentís level of financial gifts and donations related to the performance of the universityís prestigious football program. The following data were collected for each year over an 11 year period (1998 thru 2008): the football teamís winning percentage; total money raised from donors; number of donors making contributions; number of contributions; and average size of each contribution. The researchers found that the only linear relationship that existed with the teamís winning percentage was a negative relationship between winning and the average size of each contribution (p < .05; R2 = .682).
    Intercollegiate Athletic Success and Donations at NCAA Division I Institutions
    The authors tested the hypothesis that donations to universities vary with athletic success using a comprehensive panel data set drawn from the Integrated Postsecondary Education Data System (IPEDS) over the period of 1976Ė1996. Estimation of a linear reduced-form model of the determination of donations to colleges and universities indicates that postseason football bowl-game and NCAA Division I menís basketball-tournament appearances were associated with significant increases in restricted giving and no increases in unrestricted giving to public institutions the following year, whereas only postseason basketball appearances were associated with increases in restricted giving to private institutions.

  2. #17
    Loyal Bear barabbas's Avatar
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    If Cal were to drop sports and become the Euro/Canada/UofChicago model "Berkeley," interest and pride in the University would fall through the floor. The on going culture war on campus should be fought by our athletic director, but IS NOT! The use of "Cal-Berkeley" has skyrocketed since Birgeneau's clueless change and this is a brand nobody wanted, but athletics is doing nothing to fight it!

  3. #18
    Quote Originally Posted by yellerbear View Post
    There's plenty of academic literature that concludes that football (and more broadly, intercollegiate sports success) success does not correlate to increases in unrestricted donations to the University. There is some weak evidence that increased intercollegiate success leads to an increase in restricted giving (i.e. sports-only donations).

    Winning and Giving: Football Results and Alumni Giving at Selective Private Colleges and Universities



    The Relationship Between Sustained Success and Donations for an Athletic Department with a Premier Football Program



    Intercollegiate Athletic Success and Donations at NCAA Division I Institutions
    Then somebody come up with some "alternative statistics"!

  4. #19
    Quote Originally Posted by packawana View Post
    I think the faculty would get behind Carol Christ based on what/who I know from working with some of them.
    She led the Socal day and ended her speech with a rousing "Go Bears"!! Sure looked like she was running for Chancellor.

  5. #20
    Quote Originally Posted by Big C_Cal View Post
    Then somebody come up with some "alternative statistics"!
    All you have to do is look at all the premier public flagship universities in the country, their endowments, their athletics success and then look at ours. Being a large public school and having athletic success begets much greater alumni engagement than we enjoy. Limiting this conversation to unrestricted giving is pretty silly. Should we discount the $600m Phil Knight just gave to UO because it's restricted to the building of an engineering campus?

    Ask yourselves, if Cal wins more and more consistently, will alumni be more or less engaged with the university?

    If you want to broaden your donor base, do you need more or less engaged alumni?

    If your counter is that they won't hand you blank checks, so what? Rarely does anyone do that. All we need is more alumni to take in interest in the university. And until alumni start visiting campus by the tens of thousands to see our nobel laureates, we need entertainment.

    Oh, and comparing us to private colleges is pointless. They are able to do plenty of other things to increase giving that we can't even dream of. There is no scenario where Cal becomes the University of Chicago.
    Last edited by socaliganbear; 02-10-2017 at 01:41 PM.

  6. #21
    Oak, there is a fallacy to using the term "Campus" (which I interpret to means academics), in that Campus actually will not pay for the debt on the stadium. There also is a problem in that your mixing operations and capital projects together, which are by law, two different revenue streams and costs, that can't be commingled. That doesn't mean the main thesis of your comments doesn't have merit, but let me take a shot of restating this the way things actually work. Most of the costs and benefits to my knowledge canít be tied down to concrete numbers. And while high capital costs for the stadium may under certain circumstances mean less endowment of Cal capital projects, there is a misunderstanding of the debt structure accounting.


    I did benefits to spending on sports, but it really also applies for stadium and SAHPC costs because football pays most of the fright for other sports:

    1) Campus get approx. 600 students paid for by donors who pay to OPERATING funds and that other OPERARTING revenues pay for (note there are many more student athletes, but some our walk-ons, and some get partial scholarships, which are added-up to get around 600)
    2) Campus gets around $4 Million in overhead and fees paid for by the I/A operating fund
    3) Cal gets name and brand recognition, which in some way that canít be quantified (or at least economic studies canít come up with consistent results), improves donations levels, and, surprisingly, when your major sports are dong well, increases applications, and improves your student body (economists have actually looked at this and come-up with numbers on application increases tied to football success). I donít know how this translates into a dollar amount.
    4) Cal sports provide an activity or social scene in campus life that some students care about. Some students prefer to come to a college with power 5 conference sport events, cheerleaders, bands, and all that comes with than. I donít know how to quantify this into a monetary amount.
    5) Some students enjoy vexing adobe to compete in athletics at a high level. For example, my friendís son turned down Harvard and Yale so he could walk on a non-revenue highly regarded sports program at Cal. Again, I doní know how you put a number on that.
    6) The only way you get a large number of Cal alums and donors to campus or to look at anything Cal related is through football or basketball games. Itís not even close to any other form of event. This provides administrators or those desiring to raise funds access they donít otherwise. Again, its impossible to place a specific value on this as gifts, especially large gifts, take a long time and are complicated. Let me give you some examples. Most of the members of the Wall gave both sports and academics. If you believe Chancellor Dirks, most donors/alums initially came back to Cal for a sporting event. Another example, yesterday there was event held in Santa Monica for donors. The most attended break out session, by far, had to deal with sports. Those that raise funds see sports as a gateway to raise funds for Campus, but no one I know can tell you exactly how much sports brings in. But if sports didnít matter to Power 5 donors, including the school across the Bay which has more teams than any other Power 5 school, they would drop them. Stanford subsidizes sports more than any other school in the Pac for a reason.

    Negatives:

    1) Cal pays a $5 million subsidy (the lowest of any Pac school) to I/A, most of which is consumed by overhead and other fees (see no. 2 Benefit above). this is paid by the Chancellor's discretionary fund which is descried below.
    2) If the sports program screws-up, it embarrasses the school. Look at Baylor. This is very hard to quantify in dollar and cents, though in Baylorís case it likely will mean legal liability and related costs.
    3) Paying high read coach salaries attracts negative attention . I can't put a dollar amount on this.
    4) There is a lot of time and effort put into Power 5 sports which could be put elsewhere and benefit the school. This model works okay for Ivy schools for example.
    5) If I/A runs up an OPERATING (AS OPPOSED TO CAPTIAL FUND) deficit, discretionary Chancellor funds are used to pay the deficit. In theory, the deficit is supposed to be $5 million, which historically was not met, though lately there was a surplus and now there is a minor deficit. The OPERATING DEIFICT is expected to stay minor as revenues are increasing due to increased revenues from various sources. That said, Cal I/A now has an accrued interest payment that is paid out of Capital Fund, and does not impact the operating deficit, despite all the bullshit you have heard from journalists. The Chancellor has access to small amount of money called an unrestricted fund, which he or she can use legally in any way they feel fit (they are basically gifts left to Cal w/o any specific purpose and is not generally not the way large fits are provided by the donor base, who typically want their gifts tied to a specific purpose). The Chancellor typically uses the funds to pay speakers, fund cultural events, and subsidize sports, specific research projects, and other things of general interest to the university. To the extent the money goes to sports, it will not be used for these other purposes.


    What often is misunderstand is the interface of legal requirements and non-profit accounting requirements. Under accounting for governmental agencies, restricted funds are used for money subject to lasting donor stipulations and/or other legal restrictions, which mandate that the funds be ďheld in perpetuityĒ for that specific purpose. There are two types of restricted funds, those can be used for the entities operations or operating funds, and those to pay for capital projects (or to repay related debt service), which are called capital funds.

    Money for operating academics (e.g.. to pay operating expenses such as professor salaries, etc.), are in a restricted operating academic fund. Money used for academic-based capital projects is in a restricted capital funds for that purpose. Money for both funds come from clearly defined revenue streams that canít be used legally for any other purpose. So when anyone tells you that debt service will come out of academic funds, they are full of sh!t.

    Cal has set up capital funds to repay the debt, and put in the fund revenues from certain non-acdemic sources, mostly ESP. The ESP funding structure is highly impacted by interest rates. So if interest rates continue to stay at historically low rates for the last 50 years, then there is negative arbitrage, and at some point, principal in the fund has to be used to pay interest payments. If interest rates continue to rise and get say above 5%, all of a sudden there is material positive arbitrage, and in a few years, ESP looks like a great idea, since the income from reinvesting ESP proceeds will exceed debt service, even at current ESP tickets sales. If rates stay somewhere above 5% before the bonds are paid off, there will be additional endowment left over that can only legally be used for I/A capital projects (remember those fund accounting rules).

    Letís take this a step further. What happens 80 years down the road if there is not enough money to repay the debt obligations due too much negative arbitrage? The governance documents for the bonds only have pledged UC capital funds, not the funds of any specific UC school (appreciate the bonds financed various capital projects such as a faculty center for a new UC, labs, etc.) to repay the debt. This actually happens from time to time when donations and other revenue sources are insufficient to pay for the financed facility cost. In that case the deficit is paid out of general UC capital funds, without any recourse against the specific university (this may come as a surprise to most, but UC pays for athletic faculties in UC schools not named UCLA or Cal all the tine). Iím simply not aware of any shortfall every being paid out of funds earmarked for academic purposes.

    Now none of this answers your question of the expenditures (including questionable cost overruns) on the stadium are worth it? This does mean money likely will be taken out of funds that could have been used for future I/A capital projects. Also, ESP may have cannabilzed donations to the I/A operating fund. However, without properly including capital debt, the I/a operations fund is running roughly at break-even.

  7. #22
    Quote Originally Posted by socaliganbear View Post
    All you have to do is look at all the premier public flagship universities in the country, their endowments, their athletics success and then look at ours. Being a large public school and having athletic success begets much greater alumni engagement than we enjoy. Limiting this conversation to unrestricted giving is pretty silly. Should we discount the $600m Phil Knight just gave to UO because it's restricted to the building of an engineering campus?

    Ask yourselves, if Cal wins more and more consistently, will alumni be more or less engaged with the university?

    If you want to broaden your donor base, do you need more or less engaged alumni?

    If your counter is that they won't hand you blank checks, so what? Rarely does anyone do that. All we need is more alumni to take in interest in the university. And until alumni start visiting campus by the tens of thousands to see our nobel laureates, we need entertainment.
    Let's look at the top 10 by endowment:
    1. Texas A&M
    2. Michigan
    3. UVa
    4. Ohio State
    5. Pitt
    6. Texas
    7. Wiscy
    8. Minn
    9. UDub
    10. UNC

    Of those I'd say 6 have been consistently good or above-average FB programs. UNC and UVa you might be able to make a case for basketball support. But Pitt and Minnesota? There's some history but not a lot.

    And there's a lot of other variables to take away from this -- UM is undoubtedly the flagship university for Michigan while Berkeley is a flagship for the UC but its standing is much more equal to the other branches than the relationship between say UM and Eastern Michigan or MSU. College football also carries greater cultural significance in these parts of the country than the Bay Area. UT Austin has 12,000 more students than we do, etc.

    If we had more data about alumni engagement and giving during the Tedford years I'd find the good sports-higher donations-higher income thing to be true if we could see a visible uptick in giving, but as far as I know giving rates from those years and now aren't that far apart.
    Last edited by packawana; 02-10-2017 at 01:57 PM.

  8. #23
    True Blue Golden Bear okaydo's Avatar
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    This is a stupid question, but I'll ask anyway:

    We have a bunch of billionaire alumni, including Intel co-founder Gordon Moore, who's worth $7.1 billion and Masayoshi Son, who's worth $22 billion, and Eric Schmidt, who's worth nearly $11 billion.

    Can't we get 1 (or some) of these very rich guys to toss in some pocket change to pay off our stadium debt?

    Gordon Moore is 88. Can't we wine and dine him to put it in his will to give us a billion, or something, in exchange for naming rights somewhere, or a statue?

    Or does UC Berkeley suck at getting our own Phil Knight?



  9. #24
    Quote Originally Posted by packawana View Post
    Let's look at the top 10 by endowment:
    1. Texas A&M
    2. Michigan
    3. UVa
    4. Ohio State
    5. Pitt
    6. Texas
    7. Wiscy
    8. Minn
    9. UDub
    10. UNC

    Of those I'd say 6 have been consistently good or above-average FB programs. UNC and UVa you might be able to make a case for basketball support. But Pitt and Minnesota? There's some history but not a lot.

    And there's a lot of other variables to take away from this -- UM is undoubtedly the flagship university for Michigan while Berkeley is a flagship for the UC but its standing is much more equal to the other branches than the relationship between say UM and Eastern Michigan or MSU. College football also carries greater cultural significance in these parts of the country than the Bay Area. UT Austin has 12,000 more students than we do, etc.

    If we had more data about alumni engagement and giving during the Tedford years I'd find the good sports-higher donations-higher income thing to be true if we could see a visible uptick in giving, but as far as I know giving rates from those years and now aren't that far apart.
    So your point is most of the top 10 have top athletics. Which is also my point. . . Thanks?

    Anyway, the dumb way to look at this would be to look at a given year's record and gifts. The smarter way would be to take a holistic approach. Our goal, certainly Cal's goal, is to broaden the donor base. That is going to take a lot of time. Which is fine. It means having winning seasons so that students show up. When they show up, they become fans. If we keep winning, those fans eventually become donors, if we keep winning, their kids are hooked etc etc. It's a long term thing. What we do now will affect us 15-20 years from now to a greater degree than it will two years from now.

    Anyway, this is very much the typical bureaucratic Cal response. No one is saying win more football games and we get blank checks or that the endowment will just start growing. We're saying winning sports DOES result in alumni engagement, and you are NOT going to increase alumni engagement without sports (at Cal). Our issue isn't that our endowment hasn't met some arbitrary benchmark. It's that we 100% don't do enough to increase alumni engagement.

    Our position relative to other universities in the state doesn't matter, our base is our base and that's where we will draw from. The size of our base is also not an issue, because what we may lack in size (and we're large enough as it is) we more than make up for in $:

    http://www.forbes.com/sites/nickmorr.../#20f5905f28da

    https://en.wikipedia.org/wiki/List_o...ionaire_alumni

    http://abcnews.go.com/Business/top-1...id=18539608#14

    The issue is engagement. Athletics just happens to the a fantastic form to increase engagement.
    Last edited by socaliganbear; 02-10-2017 at 02:27 PM.

  10. #25
    Quote Originally Posted by socaliganbear View Post
    So your point is most of the top 10 have top athletics. Which is also my point. . . Thanks?

    Anyway, the dumb way to look at this would be to look at a given year's record and gifts. The smarter way would be to take a holistic approach. Our goal, certainly Cal's goal, is to broaden the donor base. That is going to take a lot of time. Which is fine. It means having winning seasons so that students show up. When they show up, they become fans. If we keep winning, those fans eventually become donors, if we keep winning, their kids are hooked etc etc. It's a long term thing. What we do now will affect us 15-20 years from now to a greater degree than it will two years from now.

    Anyway, this is very much the typical bureaucratic Cal response. No one is saying win more football games and we get blank checks or that the endowment will just start growing. We're saying winning sports DOES result alumni engagement, and you are NOT going to increase alumni engagement without sports. Our issue isn't that our endowment hasn't met some arbitrary benchmark. It's that we 100% don't do enough to increase alumni engagement.

    Our position relative to other programs in the state doesn't matter, our base is our base and that's where we will draw from. The size of our base is also not an issue, because what we may lack in size (and we're large enough as it is) we more than make up for in $:

    http://www.forbes.com/sites/nickmorr.../#20f5905f28da

    https://en.wikipedia.org/wiki/List_o...ionaire_alumni

    http://abcnews.go.com/Business/top-1...id=18539608#14

    The issue is engagement. Athletics just happens to the a fantastic form to increase engagement.
    My point is that top athletics and endowment are correlated but there's no proof of causation here. Sure, having a good football program might mean more donations. But that's a might. Having a top football program might be a result of a bunch of other factors as well, just as having a larger endowment might be the result of a lot of other factors, such as importance within the state or student population. Having a good football program might also mean less endowment. Look at LSU -- they've won a nattie in the last 10 years and their endowment is less than a quarter of ours.

    Having a good athletics program might get you more alumni engagement. But alumni engagement != moolah. While having good athletics is what draws Phil Knight to give to Oregon, it's also not what draws Mark Zuckerberg to give us or Stanford a crapton of money. None of this is to say that we shouldn't be investing in our athletics department in order to be competitive, or that we shouldn't be competitive in general. I just don't necessarily buy the "if we win more, the alumni will give more" argument because there are a million different reasons alumni could give money and simply being engaged with the university's athletic success isn't going to propel donations.

  11. #26
    Actually thinking about my time working in fundraising, I almost always encountered one of two options as to why alumni didn't want to give. It was either:

    A) My taxes are already going to this (You'd expect Cal grads to be more intelligent about school funding but I digress)
    B) The school treated me like crap

    If we want alumni engagement, we can start with the university giving the undergrads a better experience and stop treating undergraduate education like the Hunger Games.

  12. #27
    Quote Originally Posted by packawana View Post
    My point is that top athletics and endowment are correlated but there's no proof of causation here. Sure, having a good football program might mean more donations. But that's a might. Having a top football program might be a result of a bunch of other factors as well, just as having a larger endowment might be the result of a lot of other factors, such as importance within the state or student population. Having a good football program might also mean less endowment. Look at LSU -- they've won a nattie in the last 10 years and their endowment is less than a quarter of ours.

    Having a good athletics program might get you more alumni engagement. But alumni engagement != moolah. While having good athletics is what draws Phil Knight to give to Oregon, it's also not what draws Mark Zuckerberg to give us or Stanford a crapton of money. None of this is to say that we shouldn't be investing in our athletics department in order to be competitive, or that we shouldn't be competitive in general. I just don't necessarily buy the "if we win more, the alumni will give more" argument because there are a million different reasons alumni could give money and simply being engaged with the university's athletic success isn't going to propel donations.
    Winning sports WILL result in more alumni engagement, and there's no way that can be spun as a bad thing. Now, if you personally believe that we would actually increase our engagement but all these generally well off fans will still withhold, sure that could be. But that would make us quite the unicorn in the premier brand + sports combo club. But unfortunately, that's how we explain every bad thing that has ever happened to us, in sports or otherwise.

    Yes, there are a million other reasons why alumni can/do give money. But those reasons already exist and our engagement, giving, endowment are what they are. So obviously, something has to be done differently. And you know what would be radically different? Winning sports.

  13. #28
    Sperling is dead but his companies name is on a stadium, so I assume he was a sports fan. Of the living, most of the guys don't live in the US, and I suspect don't follow college sports. Moore attends Cal games. Milken gives to Cal sports. Don't know about Schmidt or Stryker.

  14. #29
    Schmidt gives to Cal, doubt Cal sports.

  15. #30
    The more I think about it, maybe the Sports program should do some sort of schmoozing with grad students. The past few decades have shown they have a higher chance of becoming millionaires and billionaires post-Berkeley than the undergrads do.

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