Friday, March 30, 2007

On the Eve of the Final Four – NCAA President Myles Brand

Once again the focus of the sports world has their eyes set on the Final Four, the culmination of the college sports year. There may be a BCS Championships and there may be NCAA championship contested in a myriad of other sports but none are as prized as the opportunity to cut down the nets following Monday night’s championship game in the Georgia Dome. Tens of millions will be watching Saturday and Monday night, the hopes and dreams of basketball fans at Florida, Georgetown, Ohio State and UCLA hope to hear the strains of their team earning that One Shinning Moment Monday night. But for NCAA President Myles Brand there is a much bigger game at stake, a game where much more will be decided than which school earns the opportunity to call themselves NCAA Men’s Basketball Champions.

Brand met with the media Thursday afternoon in Atlanta facing a series of questions the media wanted answered. The hopes of Buckeye Nation rest on the broad shoulders of 19-year old Greg Oden. If Oden was born a year earlier he would have never played one college basketball game. Oden, an All-American in what will be his only year of college basketball was the first high school basketball player forced to play at least one year of college basketball under the NBA’s 19-year old minimum age rule that was included as part of the league’s last CBA negotiated between the league and its players association.

Brand made it clear the NCAA had absolutely no input in the NBA’s decision (the rule applies to any basketball player) to force high school’ers to play at least one year of college basketball, but did express some concerns about the impact players like Oden could have on the NCAA and the message it’s trying to disseminate.

“If there are individuals who are just looking at this as one and out, not taking care of business in the second semester, we have to deal with that. There may well be some of those. There's another, I would say, unintended consequence of the rule, which actually has a beneficial effect. We haven't yet fully seen that work out, but I think it's a critical important effect.

“Namely, it sends a very clear message to young men, their families, third parties, that if you do think you can play in the NBA, and far more think they can than actually do, but if you do think you can play in the NBA, you're going to have to go to college for a year. ”That means you better prepare for the admission standards, and you have to be prepared to do the academic work.

“So the message, I hope and I believe, is getting back to many of the high school students. And I hear earlier and earlier in their high school career, that even if they believe, correctly or not, they're going to play in the NBA, they will have to prepare for college.

”Hence, they'll come into college better able to undertake the academic work. As we all know, the vast majority who come into college, even with NBA dreams, and I don't want to disturb their dreams for a moment, the vast majority of them will find they just don't have that very high level of elite athleticism that allows them to do that.

”But now they'll be in college, they're prepared for college, and the likelihood they'll stay on is increased because they've prepared for it, and we hope that will show up in the graduation rates and the education of these young people.

”Leaving aside the few elite individuals who think that they're not going to the NBA one year and having to spend it in college, not necessarily happy about it, and then blowing off the second semester, leaving aside that very small group of people, we're talking about a handful, I expect hundreds, maybe even thousands, over the years to be positively affected by this rule.

”Now, if I had a vote, which I don't, and I told you I didn't in the beginning, I'd like to see it for more than one year, two years, three years. The football rule works well (the NFL’s CBA only allows players to become draft eligible after their junior season). We see a good graduation rate in football. Part of that is due to the fact the young men can't leave for three years. But I don't have a vote.”

The NCAA has often been accused of micro-managing college sports and at time following a set of rules that might seem nonsensical to anyone but the NCAA. One area the NCAA is trying to come to grips with text messaging and recruiting.

“That's an area of great confusion. The fact is, text messaging has been discussed by our membership. They have not resolved it in their own minds about how best to handle it.

“There are some cases in which a great deal takes place, and that is a burden on youngsters, particularly if there's a fee attached to it, it could be a burden on their families as well. We don't quite have it amongst our members what's the right approach on that.

“Moreover, text messaging may be last year. It may be we're moving on to a different means of communication electronically. By the time the NCAA gets clear about text messaging it won't even be used any more.

“One of the issues that we face, and we all face, you in the media and we in the NCAA, is to understand how the new media is evolving and how to create fairness and how to project our rules -- our old rules into that new media that make sense, and that are not overly burdensome and not practically enforceable, on the other hand, it's fair to the student-athletes and doesn't allow for abuses.

“I think we have a very hard job to do that, and we run as fast as we can to catch up” Brand said.

The Final Four returns to Atlanta this weekend for the first time in five years, five years Brand and the NCAA have witnessed the continued and at times unparalleled growth of March Madness.

“I was reflecting upon that myself just the other day. You're right, the event has changed. I was here five years ago. I remember how it was. There were great basketball games, too. But it is more than three basketball games right now. It's turned into a several-day event with its own nature.

“We try and make sure it has a collegiate flavor to it, that it is a family-friendly event, that there are lots of things to do for youngsters as well as families, as well as those who want to hear music. Last couple years we've started to have music. I think in Indianapolis last year we had very large events which we'll also have here as well.

“It is evolving along those lines. I think our fans and our public enjoy it. Our task as that happens is to make sure at the same time that it is a collegiate event, that it keeps that feeling and flavor of college basketball. There are temptations and challenges not to do it that way. But we're working very hard to make sure that we keep the flavor and sense of the games as it grows to be more fan friendly.”

The Final Four is a weekend filled with much more than three basketball games and as many personal appearances as Dick Vitale can squeeze into a weekend. Its concerts, a Fan Fest, a basketball fan’s weekend wonderland. A fair question Brand was asked about; does he and the NCAA believe the ancillary events that are very much a part of the Final Four weekend will trickle down to the earlier round NCAA basketball tournament sites?

“We're not there yet. Maybe eventually we will be there. Right now we're focused on the final weekend, Final Four weekend. That may not happen. Although we're beginning to see some enlargement of other events.

“In Division II, we've brought together a series of championships, five to seven championships now each year, which we call a festival. It does have music. It's mostly for the student-athletes who are there. But I can imagine at one point that will blossom a bit and involve the greater community as well.

“It's possible it will happen. There are no plans for it right now. It's not on the drawing board. At this point we are focused on this final event. The point that it is changing and be more fan friendly, that is our intent, that did not happen by accident.”

Much of the off-court attention throughout the Final Four will focus on the University of Kentucky hiring a new men’s basketball coach. Long considered one of the historically marquee college basketball programs, the talk has Kentucky officials suggesting they’re ready to pay the right coach millions of dollars a year to bring basketball glory back to Lexington, call it Nick Saban money and the obscene contract worth more than $4 million annually Saban signed in January to coach the University of Alabama’s football team.

“Yeah, the basketball coaches have not yet gotten to the Nick Saban level. What's happened is Nick Saban, the market between the NFL and the college coaches has collapsed. The pay rates for the very highest celebrity coaches are similar. We're seeing more and more movement back and forth.

“When we were at a million dollars, which is an enormous salary for a coach compared to what faculty members make, for example, it probably was justifiable because there weren't very many of them. There are a number of people on all major campuses, including the ones in Kentucky, particularly when you look towards the medical school, who have compensation packages of that kind.

“We always have to remember the schools aren't paying all these dollars. In fact, on average the schools only pay 25% of those large compensation packages. The rest are through media contracts and speaking engagements, but the compensation package is clearly very large.

“I thought a million dollars was a lot. But when we moved away from that and moved, in one case a $4 million contract, I think we have to begin to ask some very hard questions. Whether you can justify it or not in terms of rate of return, and I can talk more about that if you like, whether we can justify it or not in terms of rate of return, it raises the question of propriety for colleges and universities.

“I'm not sure you can justify it in terms of rate of return because, first of all, the seats are already sold and filled. There's a limit to how much you can raise prices, whoever the coach is. The media contracts often, mostly the conference and national contracts are not affected, and the local media contracts also don't have a great deal of elasticity.

“Fund-raising would be the only area in which you might say certain coaches could bring in more money. That's controversial because many of these institutions are already working very hard to raise funds.

“Let's say for the sake of argument you can make that up through additional fund-raising. I would believe that that could happen in some cases. Again, I want to say, you know, even if all that's true, I think you have to ask the hard questions. Is this the appropriate thing to do within the context of college sports?” Brand said.

Saban’s contract attracted all the wrong type of attention for the NCAA including raising the specter of the NCAA losing the tax exempt status it enjoys.

“We have not had any follow-up since there was interest by former congressman Thomas in the House Ways and Means. As you know, or I expect you know they sent us a rather long letter, or at least his staff wrote that letter, and we answered in detail. Both the letter and responses are on our website if you would like to look at the details of that.

“We have heard no follow-up on that whatsoever from either the House or the Senate. “The issue seems to have changed when we moved from a republican Congress to a democratic Congress. At this point we have no questions on that regard or any follow-up.

“What the issue was at the time, I believe, and your question I think is correctly directed, namely that it wasn't the NCAA national office, because we're basically a pass-through operation, 96% of all our revenue goes to the campuses, so we're basically a pass-through operation. It is the campuses that were actually under threat for tax structuring issues.

“The two areas, amongst others, that probably would have been looked at, if that discussion had continued, would have been the deduction one could take in terms of boxes and so. Right now you can deduct 80% of the donation. That might come under additional scrutiny. At one point when this first came up many years ago, it was a hundred percent. Congress reduced it to 80%. It's possible that that could come under conversation.

“And the other part was the ability to use tax-free bonds for facilities. That's really more of a state issue in most cases, maybe not all, but most cases, and it would have to be taken up state by state.

“Those were the kinds of tax issues I think were on the table. But with the change in Congress, the change of leadership at the House and Senate, Senate Finance, House Ways and Means, we have not heard any additional comments about this, nor have we been asked about it from the Congress.” Brand related.

One issue Brand made clear regarding money and coaches’ contracts – it isn’t an issue that is going anywhere and at the end of the day Brand admitted he was hopeless to stem the tide of coaches signing multi-million contracts.

“The problem we face of course is the NCAA -- the national office can't do anything about it. The reason we can't do anything about it is we don't make the hires and we certainly don't set the salaries or the budgets of the institutions. Frankly, we should not do so. I don't think the national office, the NCAA, should have control over campus budgets or make the particular hires.

“But I think we can ask some hard questions in the following way. I think we can ask the schools and the conferences to consider this. We can't pass any rules. It's called collusion, anti-trust. You can't limit salaries on a national basis or even a conference basis. But I think we can prompt our members and our conferences to say, At what point do you believe in your context for your institution, for your conference, that this does not make sense? Each school is going to have to figure that out for themselves.

“Now we all recognize there are going to be fan and alumni pressures on the one side. There are going to be faculty and questions of propriety arising as well. So it's a complex issue. But I don't think -- this is my personal view. I don't think schools should be moving in this direction without giving it some deep thought and trying to work through in their own context the pluses, minuses, the balance. What are you saying about your integrity and value?

“I can't draw the conclusions for them. They have to draw them for themselves. Certainly we've reached the point, even as I told you before, the return on investment makes sense, even under those conditions, we're beginning to reach the point in which you still have to ask those questions in your context on your campus before making the decision.

“Ultimately I would suggest to you it's the board, not even the president or the AD, the board has to get involved when we reach that level of compensation.”

Nike, Adidas and Reebok are more than happy to pay coaches millions of dollars for ‘allowing’ their players to wear their products, making it even that much more of a challenge for Brand and the NCAA to try and regulate.

“You cannot. And you should not. Just as we don't regulate the compensation packages, universities don't regulate the compensation packages for faculty members. For example, if you're an academic physician, you're doing many procedures, you'll have a private practice plan which can easily give you a million dollars if you're an ophthalmologist or neurosurgeon or some such, cardiovascular. There's no way, either legally or in fact, a university can regulate that, nor can they regulate the compensation packages for coaches in this way.

“What we require of coaches, which aren't required of faculty members and others in the university, is that disclosure. We believe that transparency, while it's not regulatory, helps I think set the tone. So we do require, and you print, what those compensation packages are. That will continue.

“But the fact of the matter is you don't print or know about, and most of the time university presidents don't even know about, outside earnings from faculty members, law faculty, business faculty, so on. They do have rules about what you can do for outside earning. It's called the one-in-five rule for faculty. You can't devote more than one day a week to outside earnings if you're on full contract.

“They do regulate the time spent, but the amount of money spent, compensation for that outside consultation work, is not regulated, nor should it be in the case of coaches. But we do make that information known, and that transparency is I think what we're talking about.”

Big business yes, great basketball – to sports fans that’s what they’re looking for. But be very sure, hundreds of millions of dollars will be on the line.

For Sports Business News this is Howard Bloom

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