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Volume 21 No. 6

Colleges

College sports could look very different by the end of the new year. Just think about what’s in play in 2018.

The NCAA is expected to pass sweeping rules changes to college basketball recruiting, while the Jenkins v. NCAA (pay-for-play) antitrust lawsuit will develop clarity — a hearing is set for Jan. 16.

Legalized sports betting is under consideration in several states, and the new tax bill going into effect this year will challenge the way athletic departments fundraise.

Those specific issues are in addition to the broader topics of increased spending in facilities, salaries and buyouts, athletic department debt, and the health and well-being of student athletes.

Indeed, the table is set for a volatile and potentially pivotal year in college athletics that could dictate the way the college game is managed for years to come.

“The amount of uncertainty or turbulence is probably more than I can recall at any other time,” said Bubba Cunningham, North Carolina’s athletic director and president of NACDA, an AD trade association. “The media coverage and the amount of money in sport has created more tension on our campuses than at any other time in our history.”

In a recent survey of college insiders, ranging from athletic directors to former ADs, consultants and search-firm executives, SportsBusiness Journal asked what are the biggest challenges facing college athletics in 2018.

What follows, based on feedback from the insiders, is the consensus on why 2018 will be a year to remember in college athletics:

Jenkins v. NCAA: This is the antitrust case that could vault college sports from the amateur model to a free-market system. The case was quiet in 2017, but that’s about to change.

An important hearing on Jan. 16 in federal court in Oakland could dismiss the case or move it forward. U.S. District Judge Claudia Wilken, who ruled in the O’Bannon case, will preside.

The student-athlete plaintiffs, Martin Jenkins and Shawne Alston, are asking for an injunction prohibiting the NCAA from setting a limit on compensation, which is currently a scholarship plus cost of attendance. The plaintiffs, represented by Winston & Strawn and Hagens Berman Sobol Shapiro, argue that schools don’t have to pay athletes, but they cannot conspire to cap compensation, either.

The NCAA, represented by the law firm of Skadden, Arps, Slate, Meagher & Flom, is arguing the issue was already decided in the O’Bannon case and will seek dismissal.

Tax man cometh: At a time when ADs lament the ever-growing cost to do business, they got hit with a new tax bill that in 2018 will increase expenses and take away an important deduction. For more than 30 years, donors have been able to write off 80 percent of a contribution that went toward securing season tickets, like a seat license, but this tax bill eliminates that deduction.

Schools now wonder to what extent donations, which pay for athletic scholarships, might take a hit. And will schools raise ticket prices and lower the required donation for a seat as an adjustment?

“There are some huge debt service obligations out there that rely on a steady stream of revenue from premium seating,” said Todd Turner, a former AD whose Collegiate Sports Associates conducts searches and consults with universities. “You wonder how the new tax bill will impact the marketability of those seats.”

Athletic departments, which operate as nonprofit businesses, also will face a new 21 percent excise tax on up to five salaries that exceed $1 million annually. An analysis from Spencer Fane LLP found that 188 coaches and ADs at the 65 power five schools are guaranteed at least $1 million, so any dollar amount above that would be taxed at 21 percent.

Spencer Fane, in a report for AthleticDirectorU.com, specifically examined the University of Kentucky, where its salaries for men’s and women’s basketball coaches and football coach go well over $1 million each. The excise tax on the amount beyond $1 million will cost UK $1.9 million in unbudgeted tax expenses this year.

Some insiders suggested that schools will look at routing compensation to their coaches through third parties, like shoe companies or multimedia rights holders, but it’s uncertain if that would be considered institutional income or outside income.

College basketball changes: NCAA President Mark Emmert and conference commissioners are confident that basketball recruiting can be better regulated. When an FBI sting led to 10 arrests last September for bribery and fraud charges, Emmert formed a commission, chaired by Condoleezza Rice, to reform the recruiting scene. The committee’s recommendations are expected in April and implementation could be in place by the start of next season.

“I think there is a bias for action,” Pac-12 Commissioner Larry Scott said. “What’s different is the fact that these are federal crimes and that’s a wake-up call for anyone who cares about college basketball. What stronger signal do you need?”

The one-and-done rule, summer basketball and the role of agents and shoe companies are among the issues being examined by Rice’s commission.

Athletic director longevity: As John Currie found out at Tennessee and Jeff Long discovered at Arkansas, the shelf life of an AD is shrinking by the year. Both highly respected ADs lost their jobs after an unexpected turn of events.

The unpredictability of the job has led to a record number of changes — 54 ADs have been hired in the last 12 months at 350 Division I schools, including a robust 15 since Oct. 1.

Based on the pace of change since he was hired in 2015 as LEAD1’s CEO, Tom McMillen said the 130 FBS schools will see 100 percent turnover by 2020. LEAD1 is the AD trade association for schools in FBS.

“The pressures to win and succeed financially are increasing and job security is fleeting,” said McMillen, who sees the industry getting more volatile.

That’s especially true at the highest levels where ADs are tethered to the football coach they hired. Currie was run out of Rocky Top for trying to hire Greg Schiano; Long was dismissed as the football program under Bret Bielema struggled.

“The job has changed dramatically in the face of conference expansion, finding and managing the right student athletes and coaches, and the pressure to win and generate revenue,” said IMG College President Tim Pernetti, the former Rutgers AD. “It’s by far the hardest job in college sports and it’s never before been subject to more scrutiny.”

While these four issues stood out, they’re not the only ones that merit watching. The Learfield-IMG College merger should close in the first quarter of the year, sports betting could be legalized and declining attendance has schools trying to create a more enticing fan experience, all of which set up 2018 to be a pivotal year in college sports.

“There are a number of things at work in 2018 that we’ll look back on and say, ‘That was a very, very decisive year in intercollegiate athletics,’” Long said.

Staff writer Liz Mullen and Research Director David Broughton contributed to this report.


CHRIS DEL CONTE
ATHLETIC DIRECTOR, UNIVERSITY OF TEXAS

When the University of Texas offered its athletic director position to TCU’s Chris Del Conte, he knew he faced a difficult decision. Professionally, Del Conte had accomplished more than anyone could have imagined in nine years at TCU, building football and basketball venues and getting into the Big 12. But with two teenage daughters in high school and knowing the upheaval that would result from a job change, Del Conte deferred to them. He knew he had their blessing when he saw the girls shopping online for burnt orange dresses.

Del Conte’s mid-December leap from TCU to Texas became one of the biggest college stories of 2017. In just a few weeks at Texas, Del Conte has put more than 1,000 miles on his truck, visiting the school’s donors, coaches, athletes and other stakeholders, including former football coach Mack Brown and ex-AD DeLoss Dodds. “They’re an integral part of the DNA at Texas,” Del Conte said.

In the midst of those travels, Del Conte found time for a late December interview with SportsBusiness Journal college writer Michael Smith.

The new Texas AD has been busy making the rounds.
Photo by: AP IMAGES
On the realization that he’s the AD at Texas: It’s such a surreal moment. We were in New York at the CFP meetings when I got the call from President [Gregory] Fenves that he wanted to meet with me. I wasn’t expecting it to come down like this. On that Monday [Dec. 4], he was heading to the 21 Club for a Longhorn Club meeting and we stopped for drinks at Bob’s Chop House. I thought it was going to be a quick hello. From there, it escalated to, “Hey, we’ve got an opportunity at the University of Texas and I’d like you to be a part of it.” Next thing you know, we’re in a whirlwind tour, it was getting my family on board, talking to my wife, just the reality that we’re going to leave TCU, where we’d done so much. The challenge of going to Texas, which is the standard of college athletics and a brand that is world-renowned, I couldn’t pass it up.

On his one-on-one meeting with Fenves: That was part of what inspired me. That meeting was quiet, it was clean, there wasn’t a bunch of speculation. You think about it: The University of Texas has lost over 100 years of leadership in the last few years — Bill Powers [president], DeLoss Dodds [AD], Mack Brown [football coach], Augie Garrido [baseball coach], Rick Barnes [basketball coach]. Those are a lot of coaches and institutional knowledge that was lost. The rudder was drifting a little. … When President Fenves laid out his vision and his team, I was truly inspired. I couldn’t help but jump up and say, “Yeah, baby, let’s do this.”

On being approached about other AD jobs, and why Texas: We had said no a lot of times because the timing wasn’t right, whether we were in the middle of a project, just hired a new coach, it was just never right. But with this one, Texas is Texas.

Who do you turn to for professional advice? I go to former ADs I used to work with, mentors of mine like Jim Livengood. Peers of mine like Scott Stricklin, Greg Byrne, Bubba Cunningham, John Currie, Ross Bjork, Whit Babcock. We talk a lot and share a lot. But on this one, I didn’t talk to any of them. I didn’t talk to anybody but my wife and kids. I wasn’t trying to leverage anybody else. We were really quiet. My friends didn’t even know.

On his family’s role in the decision: My daughter is a junior in high school and she left me a message the next morning: “Life is all about taking risks. If you don’t take a risk, you’ll never achieve your dreams.” That was pretty profound for a 16-year-old.

Is there a 100-day plan? You don’t come in and think that you’re Johnny Law. Come in and make an assessment. I’ve sent out a SWOT analysis [strengths, weaknesses opportunities, threats] to all 429 of our employees. What are our strengths, what are our threats, who do they go to when they have problems, tell me about yourself, all that.

On being AD at Texas, a premier collegiate brand, and how that changes the job: Oh, are you kidding me? So much so. You’ve gone from the hunter to the hunted. That’s the challenge. You know every single day that burnt orange walks on any field, they’re the hunted against anybody. That’s why anybody chooses to come to the University of Texas. They know everybody is looking at them, and that’s the ultimate challenge.


Columbia University has tapped longtime Wharton School professor Scott Rosner to head its well-regarded sports management master’s degree program, which also will add two other full-time faculty members to the stacked lineup of adjuncts for which it is known.

Rosner joined the program last week as academic director and professor of practice, replacing former director Vince Gennaro, who departed in August to become associate dean of professional studies in the sports management program at NYU.

He will be joined by Grant Son, founder of successful digital media startup SchoolSports, who has taught entrepreneur-focused classes at Yale and Columbia; and Len Elmore, the college basketball TV analyst and Harvard Law School grad who serves on the Knight Commission.

It was assumed that Scott Rosner (right) would replace Ken Shropshire at Wharton, but family obligations changed his plans.
Photo by: GETTY IMAGES

Both have taught as adjuncts at Columbia in the past. By adding them and Rosner as full-time faculty in Columbia’s School of Professional Studies, the school hopes to build an academic infrastructure more like those of other programs in an increasingly competitive field.

“It’s the best school in the world to offer a sports management degree,” said Rosner, who holds a master’s in sports administration from the University of Massachusetts and a law degree from the University of Pennsylvania. “If you’re starting from that position, you’ve got an opportunity to really grow something special.”

At Wharton, Rosner was associate director of the school’s Sports Business Initiative, which offered students at the elite business school an opportunity to work on sports-related consulting projects and find internships and jobs in the industry. He was the presumed replacement when program founder Ken Shropshire left for Arizona State in April. But when his father was diagnosed with pancreatic cancer in July, Rosner, 47, reduced his workload to spend more time with his parents.

Not long after that, Columbia called. Because the school is a far easier commute from his northern New Jersey home, Rosner felt he could better balance work and family there. Laurajean Holmgren, who served as interim academic director after Gennaro left, will remain with the program as deputy academic director.

“It’s an amazing opportunity that came at the right time,” Rosner said. “It’s already a strong program that’s known around the world. But in the past, it’s been an academic director who wasn’t a faculty member and a group of very good adjuncts. Now, you’ll have an academic director who is also a faculty member, with two other faculty members joining and maybe the opportunity to add to that. You can build more of an academic culture. And you’re better equipped to connect that culture between faculty and students and alumni.”