There is now a for-profit university entering NCAA Division I ranks

by on July 30, 2013 at 9:49 am in Economics, Education, Sports, Uncategorized | Permalink

…Mueller’s company, Grand Canyon University, in Phoenix, is in the process of becoming the first-ever for-profit university to join the NCAA’s Division I ranks. The Antelopes (hence, the ticker symbol) accepted an invitation to the WAC last December when the oft-raided league was on life support. On July 1 they became official members, beginning a four-year transition period from Division II to Division I

The presidents of the Pac-12 — including one in particular — are none too pleased about it.

The conference’s 12 presidents signed and delivered a letter dated July 10 urging the NCAA’s Executive Committee to “engage in further, careful consideration” about allowing for-profit universities to become Division I members at the committee’s August meeting. In the meantime, Pac-12 presidents decided at a league meeting last month not to schedule future contests against Grand Canyon while the issue is under consideration.

“A university using intercollegiate athletics to drive up its stock value — that’s not what we’re about,” Arizona State president Michael Crow said in a phone interview over the weekend. “… If someone asked me, should we play the Pepsi-Cola Company in basketball? The answer is no. We shouldn’t be playing for-profit corporations.”

There is more information here, and the hat tip goes to Tim Johnson on Twitter.

bluto July 30, 2013 at 9:53 am

Shows the real value of athletics (getting one’s branding on TV for a bunch of regionally and demographically popular programming).

anon July 30, 2013 at 3:56 pm

“A university using intercollegiate athletics to drive up its stock value — that’s not what we’re about,”

No, what it’s about is – “A university using intercollegiate athletics to drive up its” public profile and administrator visibility and compensation.

Arizona State president Michael Crow sounds like a hypocrite.

Pay the players and get rid of the NCAA.

Ironman July 30, 2013 at 9:55 am

If you think about it, most modern universities are really professional sports franchises that operate academic institutions on the side for the tax advantages….

Enrique July 30, 2013 at 10:16 am

Plus, they don’t have to pay their athletes fair mkt value

TallDave July 30, 2013 at 11:06 am

And don’t forget their strident political advocacy.

Untaxed business revenue, political advocacy, unpaid employees, unpaid labor, massive subsidies, undischargeable student debt… if I described the industry without naming it I bet I could get 90% of academics to support banning higher education.

Steve-O July 30, 2013 at 12:28 pm

I really don’t think this is the case given that athletic department revenues are quite small in relation to the total budget of the university, even at those universities with the highest athletic revenues.

TallDave July 30, 2013 at 11:53 pm

Oh good, then they can start paying taxes on it.

http://espn.go.com/ncaa/revenue

Alabama’s athletic revenue seems to be about 1/5th of their total budget.

aharris July 30, 2013 at 9:58 am

Harrumph! Harrumph!! How dare one of those upstart schools that might prove that people can get a good post-secondary without going in hoc to the government for over 100K possibly gain some extra legitimacy as a post-secondary option by fielding athletic teams and advertising their brands further? We can’t have that we just can’t I say. HARRUMPH!!

Claude Emer July 30, 2013 at 10:14 am

I don’t think you understand the business model of for profit schools. Close to 90% of their revenues come from the government and that’s not including money that goes into veterans’ education.

To the other point, isn’t it about time to abolish the NCAA? Create sport academies and leave education where it belongs. I’ll be more sympathetic to university presidents’ plight when a college education costs less than a condo.

Brian Donohue July 30, 2013 at 11:21 am

Yup. From a tiny acorn, the NCAA has grown into a monstrosity:

http://www.theatlantic.com/magazine/archive/2011/10/the-shame-of-college-sports/308643/

albatross July 30, 2013 at 10:01 am

aharris:

Isn’t the issue at hand *which* schools people should go $100K into hock to attend? The existing crop of schools doesn’t want to compete with the new set. The new set is largely drawn into the industry by the large amount of money being pumped into education, with a side order of employers that will give their employees promotions for getting degrees or will only consider applicants with college degrees.

prior_approval July 30, 2013 at 10:03 am

Who knows? – with enough support, MRU could finally bring football to NoVa. Especially considering how the interest in basketball at this website seems to have declined in the recent past, much like Patriot’s basketball fortunes. (Loyal readers are welcome to chime in, of course.)

Because as it is, GMU’s various benefactors just don’t have the interest to waste money on sports. Something as seemingly true in 1993 as it is today,. It isn’t as if these benefactors aren’t businessmen with their own interests, after all – GMU’s carefully constructed reputation is far too useful to waste on something like athletics.

Cliff July 30, 2013 at 10:07 am

GMU has a football team http://www.gmufootball.gmu.edu/.

JWatts July 30, 2013 at 10:33 am

Now, don’t go confusing his narrative with the facts.

prior_approval July 30, 2013 at 10:51 am

Why bother with narrative when the facts are so easily read, though it does involve more than cutting and pasting the top google link – do enjoy the links below.

prior_approval July 30, 2013 at 10:48 am

They have a football club, which you pay to be a part of – it doesn’t even involve student fees. (Google’s top link is not a replacement for actual knowledge of an institution.)

Just like the rugby club – ‘The GMU Rugby Club is the oldest club on campus and we consider ourselves gentlemen, scholars, and athletes. The Men’s Rugby Club has been in existence since 1965 and has been a major player in the northern Virginia and DC area. The Men’s Rugby Club currently competes in the Potomac Rugby Union, and although our competitive season is played in the fall, we compete year round. Everyone is welcome to come out and play rugby, no experience is necessary, although athleticism is preferred.’ http://recreation.gmu.edu/club-sports/mens-club-sports/rugby/ (Why yes, I did enjoy their parties in the late 80s, even with the more than occasional police presence.)

GMU has yet to have an ‘official’ football team – it occasionally comes up for discussion, and tends to be almost universally rejected by administration, faculty, students, and alumni, for the most rational of reasons. About the only thing I thoroughly respect about today’s Mason, it should be noted. And the fact that the Board of Visitors (do check out the current membership) is consistently opposed to wasting money in this area.

Check out this article for the DC view – http://www.washingtonpost.com/blogs/the-state-of-nova/post/george-mason-and-big-time-football-probably-not/2012/04/05/gIQAuc5ewS_blog.html

Or better, read the Broadside – http://broadsideonline.com/2012/04/02/an-undying-question-football-4665/

OK, as paid PR professionals, we laughed at the Broadside in the past, but still, it does reflect the student body in its own precious way, and as the Post notes, this is a well reported article.

Though amusingly, this is the Broadside quote from GMU’s then prospective president – ‘Incoming university president Angel Cabrera recently said that he would support the acquisition of a football team if the university is able to afford it.’

See? GMU will just buy whatever it can afford, when necessary, in the eyes of the people footing the bill. Do check into the history of the Center For Study Of Public Choice to see how this works in practice (we know what happens when I write details about how that previous ‘acquisition.’)

prior_approval July 30, 2013 at 11:07 am

However, I will admit to my own ignorance in terms of the GMU football club, founded in the year GMU no longer paid my health insurance. Possibly, American college sports has been so degraded that only athletes that pay a fee are allowed to participate.

Sure, it doesn’t sound like any actual football program at any NCAA football school one reads about – but then, it isn’t as if Mason isn’t something other than a typical university. And my only academic and professional experience involving universities is quite GMU specific – something that certainly provides one with a more complete view of how things have worked in the DC region over the past decades. Where the Redskins reign supreme – though I’ve heard that some local turtles play football somewhere outside the Beltway.

Cliff July 30, 2013 at 1:24 pm

I’m not sure how knowledgeable you are about the United States, but lots of colleges have lots of club sports teams. At Virginia Tech they have club rugby (which I played) and club lacrosse and club ice hockey, and plenty of others I am sure.

Andrew' July 30, 2013 at 10:06 am

Would you guys pick up the pace with MRU, please?

Mark Thorson July 30, 2013 at 10:38 am

When are student athletes at a MOOC going to get together to practice? Do they do it from home using their Wii’s or Kinect boxes?

TallDave July 30, 2013 at 11:08 am

We’re still working on the haptics, but we hope to have our android meatspace avatars ready for the 2017 season.

bob July 30, 2013 at 12:00 pm

They play esports of course. There’s people making money playing videogames. Only a few people make enough money to earn a decent living with it, and even those that do have a lot of yearly variance: Only a few tournaments pay big money, and even those that do will concentrate the prices in very few contestants to make it seem grand. So a winning team might make 200K a player, but 3rd place will earn 3k.

Bob July 30, 2013 at 10:08 am

The concept of “non-profit” as applied to the modern university is almost pointless. So many of the things they do generate vast accumulations of wealth without benefiting their owners (citizens of their state in the case of public universities). They’ve move way past providing a useful education to where they are merely selling a brand.

dbp July 30, 2013 at 10:14 am

Public and non-profit private universities all justify the value of having sports teams and that justification always comes down to how it somehow benefits students.

If it adds value in a public university, why shouldn’t it add value and in exactly the same way for students at for-profit institutions?

Ted Craig July 30, 2013 at 10:19 am

GCU does have an existing athletic tradition:
http://en.wikipedia.org/wiki/Tim_Salmon

RPLong July 30, 2013 at 10:21 am

As a former NCAA athlete, my reaction is: “Dear god, why would they want to do that?!?”

Ted Craig July 30, 2013 at 10:25 am

“A university using intercollegiate athletics to drive up its stock value — that’s not what we’re about,”

But using it to attract students and increase donations, that’s OK. Striking deals with companies like AT&T, that’s OK. Paying coaches more than $1 million while paying the players northing, that’s OK. Spare me the sanctimony.

Andrew' July 30, 2013 at 10:30 am

Hypocrisy of making millions on the backs of ‘amateur’ athletes: PRICELESS!!!

PStu July 30, 2013 at 10:49 am

+1 @Ted. I was about to compose a witty comment but you captured my thoughts perfectly. For many schools $1 million would be a bargain. I saw recently that Charlie Weis will get a guaranteed $2.5 million/year at UofKansas after flaming out at Notre Dame, and Kansas isn’t even a big football school.

albatross July 30, 2013 at 11:30 am

To be fair, while some schools make a lot of money on athletics while going to great lengths to make sure employees will never be paid except in company scrip, that’s not wildly different from how a lot of universities get their teaching and research done. I mean, adjuncts are paid in dollars, just not very many of them and with no promise that they will continue. And grad students are mostly paid in company scrip.

Andrew' July 30, 2013 at 11:44 am

Wait just a cotton-picking minute, there bub. Grad students are compensated by the privilege of hanging around great minds and stellar coaching.

Lester July 30, 2013 at 10:28 am

LOL. Maybe they should play in the BIg-Ten. Worse conference EVER.

Andrew' July 30, 2013 at 10:29 am

THIS is the correct place to point out that all the football coaches are millionaires!

Bill July 30, 2013 at 10:54 am

This is not all bad.

Consider: Increasing the supply of football teams reduces the price of football teams.

This could also be an end run around the monopoly professional franchises. Let’s say a bunch of for profit universities later decide to spin off their football teams as a separate enterprise and form a league of similar for profit university spin offs.

Or, consider this: What is the “location” of an online university: Could Coursera, of Univeristy of Phoenix, in the future form a college football team in a city without a major league franchise.

It is more likely, though, that Coursera will form a fantasy football league where football avatars play against each other.

Claude Emer July 30, 2013 at 11:52 am

Reduces the price of football teams? To whom? Econ 101, right? Notre Dame’s football team is going to “cost” less because ITT Tech has a football team? That’s not how it works in real life.

Why would they form their own league when they’re trying to join the multi billion dollar industry called the NCAA? If they were going to do that why even bother joining the NCAA?

The location of an online university is wherever said university picks. There are already home schooled children playing high school football on a team of their choosing. This is just the next step.

If there’s as much money to be made from online football as with college football then I can see that happening. This would bring its own set of issues, though, like why would it only be restricted to for profit school?

Bill July 30, 2013 at 2:59 pm

Lower the cost of admission and the lower the academic qualifications of prospective students to attract athletes.

I bet ITT Tech will beat Northwestern.

Claude Emer July 30, 2013 at 4:14 pm

That’s not how it works though. Otherwise, with the number of colleges already part of the NCAA or the NAIA or any other college athletics group, the cost of admission should be really low, and declining. But that’s not the case.
Also, the NCAA sets the rules on academic qualifications and those rules have nothing to do with the number of colleges.

Bill July 30, 2013 at 7:14 pm

I suppose with any cartel (ala TV rights) a league could admit more members while still maintaining a high price. It’s just that you would have to share TV revenue with more teams, making the better teams more likely to spin off or find some way of getting more take.

TallDave July 30, 2013 at 11:01 am

This is completely the wrong question.

What they should be asking is: should purportedly nonprofit colleges be running a multi-billion-dollar business with unpaid labor? Particularly a business that can impost huge costs on the unpaid labor.

I remember when the idea of colleges having TV deals was controversial. They sold out long ago.

Andrew' July 30, 2013 at 12:04 pm

About 10 seconds after liberals get aroused over this issue I will be poised to switch signs because they are bound to make things worse. Colleges are free to do just about everything they are doing, but what they aren’t allowed to do is strong-arm potential competition.

TallDave July 30, 2013 at 11:55 pm

They could either start paying the players, or stop charging for the games. I’m open to either.

John Mansfield July 30, 2013 at 12:10 pm

Brigham Young University did it the other way around with men’s soccer. They bought a franchise in a semi-pro development league.

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Jay July 30, 2013 at 10:01 pm

Saying “for-profit college” to a Liberal is like sunlight to a zombie.

Floccina July 30, 2013 at 10:08 pm

Higher education and big time sports entertainment seem like a bad bundle but a good season brings in the applications.

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