Mount St. Mary's hired a private equity CEO to be their president. You'll never guess what happened next.
I made curried cabbage last night. It's a simple dish that, like most Indian dishes, can take as much butter as you're willing to risk and can be made in preposterous quantity. Basically: chop two large onions and around a head of garlic and sweat them in just under a stick of butter; add healthy amounts of turmeric, curry powder, cumin, and salt, then chop a head of cabbage and thinly slice some potatoes and throw them in; cook until everything's soft and glows like it's radioactive—
Oh, right. That. There are many thing to say about it and I guess I have to say them instead of working on the season preview as I intended to this fine Sunday. So we'll take them in slices. Slice the first will concern the possibility of NCAA infractions and starts now.
A reader has helpfully digested the NCAA rulebook into the salient sections:
17.02.13 Voluntary Athletically Related Activities. In order for any athletically related activity to be considered “voluntary,” all of the following conditions must be met: (Adopted: 4/18/01)
(a) The student-athlete must not be required to report back to a coach or other athletics department staff member (e.g., strength coach, trainer, manager) any information related to the activity. In addition, no athletics department staff member who observes the activity (e.g., strength coach, trainer, manager) may report back to the student-athlete’s coach any information related to the activity; [Editor's note: this has not been alleged.]
(b) The activity must be initiated and requested solely by the student-athlete. Neither the institution nor any athletics department staff member may require the student-athlete to participate in the activity at any time.
However, it is permissible for an athletics department staff member to provide information to student-athletes related to available opportunities for participating in voluntary activities (e.g., times when the strength and conditioning coach will be on duty in the weight room or on the track). In addition, for students who have initiated a request to engage in voluntary activities, the institution or an athletics department staff member may assign specific times for student-athletes to use institutional facilities for such purposes and inform the student-athletes of the time in advance; [Editor's note: a lot of noise about "required" in the article but these rules really require you to parse the semantics of "required"; playing time is voluntary, too.]
(c) The student-athlete’s attendance and participation in the activity (or lack thereof ) may not be recorded for the purposes of reporting such information to coaching staff members or other student-athletes; and [alleged]
(d) The student-athlete may not be subjected to penalty if he or she elects not to participate in the activity. In addition, neither the institution nor any athletics department staff member may provide recognition or incentives (e.g., awards) to a student-athlete based on his or her attendance or performance in the activity. [Former alleged, latter not.]
[Note: Coaching staff members may be present during permissible skill-related instruction pursuant to Bylaws 22.214.171.124.2 and 126.96.36.199.3]. (Revised: 4/29/04 effective 8/1/04)
The emailer also suggests this:
As far as I can tell, the authors of the article invented the rule about "quality-control staff" not being permitted to observe voluntary off-season scrimmages. The rules about voluntary activities clearly mention athletics department staff observing, and the following rule disallows observing "nonorganized voluntary athletically related activities (e.g., pick-up games)" for certain staff members, which a student-organized scrimmage is clearly not:
188.8.131.52.1.1 Noncoaching Activities. Institutional staff members involved in noncoaching activities (e.g., administrative assistants, academic counselors) do not count in the institution’s coaching limitations, provided such individuals are not identified as coaches, do not engage in any on- or off-field coaching activities (e.g., attending meetings involving coaching activities, analyzing video involving the institution’s or an opponent’s team), and are not involved in any off-campus recruitment of prospective student-athletes or scouting of opponents. A noncoaching staff member with sport-specific responsibilities may not participate with or observe student-athletes in the staff member’s sport who are engaged in nonorganized voluntary athletically related activities (e.g., pick-up games). (Adopted: 1/16/93, Revised: 1/10/95, 12/13/05, 4/27/06 effective 8/1/06)
…but I'm skeptical he read that rule right. Even if quality control staff qualify as noncoaching, they do have sport specific responsibilities and can't observe "nonorganized voluntary athletically related activities," which I'm very sure would include the voluntary seven-on-sevens and whatnot.
The article's hugely long and goes into detail about Barwis' workout regimes and Michigan's seven-on-seven "requirements" but the only section that specifically alleges NCAA violations is this one:
"It was mandatory," one player said. "They'd tell you it wasn't, but it really was. If you didn't show up, there was punishment. I just felt for the guys that did miss a workout and had to go through the personal hell they would go through."
In addition, the players cited these practices within the program:
Players spent at least nine hours on football activities on Sundays after games last fall. NCAA rules mandate a daily 4 -hour limit. The Wolverines also exceeded the weekly limit of 20 hours, the athletes said.
Players said members of Rodriguez's quality-control staff often watched seven-on-seven off-season scrimmages. The non-contact drills, in which an offense runs plays against a defense, are supposed to be voluntary and player-run. They are held at U-M's football facilities. NCAA rules allow only training staff _ not quality-control staffers _ to attend as a safety precaution. Quality-control staffers provide administrative and other support for the coaches but are not allowed to interact directly with players during games, practices or workouts.
If verified, the quote about punishment would violate blah blah blah subsection D above. What qualifies as a "punishment" in a regularly scheduled S&C workout is unknown. Working out harder?
And if "quality control" staff were observing seven-on-seven, a claim disputed Michigan compliance department spot checks, that would be a violation as well. And the "nine hours" on Sunday would be a violation if the voluntary workouts gray area was breached.
There is some expansion on blah subsection D:
Under Carr, off-season seven-on-seven drills were run by players, without coaches or staff members present, players said. The only staffer there would be a trainer, in case anybody got injured, as allowed under NCAA rules.
Several players said Rodriguez's coaches were more likely to insist they participate in seven-on-seven scrimmages, which have become more frequent. They also said that members of the program's quality-control staff frequently watched seven-on-sevens.
"They usually just watched and would write down who wasn't there," one player on the 2008 team said.
Another said graduate assistants would track them down.
"The phone would ring: 'Where you at? ... You gotta come.' 'I'm in class.' "
Ah, smell the objectivity: "insist" is another man's way of saying "suggest you participate lest you fall behind the rest of the team and find yourself on the bench." But taking attendance is verboten. Calling players on the team probably not.
The rest of it is filler, like quotes from some freshmen about the offseason workout program…
"Hooooo!" Stokes said. "A typical week is working from 8 a.m. in the morning to 6 or 7 at night, Monday through Saturday."
And that was starting in June?
"Yes, sir," Stokes said. "We do the weight room at least three times a week, and seven-on-sevens and one-on-ones. Speed and agility on the other days. Every day we have something new to get ready for the season. The coaches have done a great job of stressing the importance of getting us ready for the big season that we're about to have."
…that would be totally evil if Rodriguez was an idiot who hadn't dealt with NCAA compliance for 20 years and hadn't made sure the strenuous workouts fit the definitions of "voluntary." This is unlikely. The same goes for the assertions that Rodriguez had his players exceed daily limits on required activities and 20-hour-per-week maximums on practice time: all of those sections rely on vague quotes about what the team does from players who aren't complaining and include things like workouts that, again, probably qualify as voluntary. Here's the big reveal on exceeding maximum hours per week:
With three hours on Saturday and a full day on Sunday, players tallied about 12 hours on those two days. They were off Monday. Players said they would spend an additional three to four hours with the team on Tuesday, Wednesday and Thursday afternoons, bringing the weekly total to 21- 24 hours.
If any section of any of those days fit the definition of voluntary, that's not a violation.
a. During the summer of 2006, members of the men's basketball coaching staff, including the former head coach, were present during, and in some instances, briefly observed men's basketball student-athletes' participation in the team's strength and conditioning program. Additionally, student-athletes were sometimes required to report to a coach the reason they did not attend a conditioning session.
b. During the summer of 2007, members of the men's basketball coaching staff, including the former head coach, regularly, but not to the extent of the prior summer, were present during, and in some instances briefly observed, men's basketball student-athletes' participation in the team's strength and conditioning program.
c. During the fall of 2006 (August through October) and spring of 2007 (March through May), members of the men's basketball coaching staff briefly observed men's basketball student-athletes' participation in a few on-campus out-of-season pick-up games, including one occasion in the spring of 2007 (around April 24), when some coaches observed a prospective student-athlete, completing an official paid visit, participate in an on-campus pick-up game with some of the men's basketball student-athletes.
This was part of a laundry list of other violations, including an impermissible car trip and two separate instances where boosters or coaches paid for school fees or tuition. But what really got SEMO in hot water was the head coach's response to the investigation; that and the collective malfeasance-lookin' thing got SEMO the dreaded three words that indicate serious ire on the part of the NCAA:
Other violations include unethical conduct by the former head coach for knowing about the program's involvement in NCAA violations and providing false and misleading information to the institution and enforcement staff when questioned about his involvement in and knowledge of possible NCAA violations; unethical conduct by the former assistant coach for failing to act in accordance with the generally recognized high standards of honesty and sportsmanship normally associated with the conduct and administration of intercollegiate athletics for his knowing involvement in NCAA violations; and the institution's failure to monitor the men's and women's basketball programs.
All this added up to three years of probation and one scholarship taken away for one year, AKA nothing whatsoever.
So, Yeah… What Might Happen?
You're not dealing with amateurs here:
Van Horn said, "Compliance and administrative staff conduct in-person spot checks of practice during the academic year and summer. We have not had any reason to self-report any violations in this area with any of our sports."
At the very least a detailed list of clean spot checks will assuage the NCAA if they choose to investigate. "Failure to monitor" can't be alleged when there is monitoring. This is a major reason big schools report a lot of minor violations and escape the NCAA hammer: they pay attention and back it up with documents. Meanwhile, the accusations leveled are anonymous, unverified, and vague. It takes a huge leap to go from this article to even the tiny wrist-slap SEMO received.
The Free Press says the NCAA's reaction is "impossible to predict," but I'll predict: it'll be slightly more strenuous than their reaction to the NCAA's reaction the Ann Arbor News academics story. Since their reaction to that story was to ignore it, that only implies a cursory look through the books.
Hey, kids! MGoBlog is out in force at the Big Day Prep Showdown and Devin Gardner is about to take Inkster up against Ricardo Miller and Pioneer. Let's talk it up.
For the last few years, Michigan has been building a name for themselves in volleyball. It wasn't too long ago that Michigan was always a bottom wrung team. Under the tutelage of Coach Mark Rosen, Michigan has scraped its way to respectful. Friday, it took the next step.
In front of a packed house of 5,772 in Omaha, NE, just an hour away from the University of Nebraska campus in Lincoln, the Wolverines took on the #3 Cornhuskers in the Runza/AVCA Challenge, the top tournament in the college volleyball regular season. This game was going to be tough; Nebraska has dominated Michigan in 3 games, sweeping Michigan in 3 games each time. The Cornhuskers have only lost once ever in the Qwest Center. Nebraska was coming off yet another Final Four appearance, knocking Michigan out in the same stadium during the Sweet 16 round.
But Michigan came out looking to match the effort of the 2007 season opener against Hawaii in Hawaii. They wanted to take out the crowd early. They wanted to get into the heads of the younger Husker lineup. They did just that. Michigan came out strong early. Juliana Paz and Alex Hunt were putting tremendous pressure on the Huskers front line. Megan Bower and Courtney Fletcher, who wasn't even slated to start until the last minute, were strong on the front, affording Michigan plenty of opportunities for easy passes. Everything clicked. [Full recap after the jump]
For round 2 of The Great Ohio Creeper Van Trip, Paul and I traveled to Dayton to consume part of the Skyline Chili™ Crosstown Showdown, wherein the Talbott brothers' Huber Heights Wayne team took on the Princeton Vikings of Cincinnati.
Terrence Talbott missed the game with an injury to his left leg or foot (he was on the sidelines in an aircast and crutches), but Terry was a full-go, and the defensive tackle performed well for the Warriors. Also playing for Wayne was 2011 QB prospect Braxton Miller, who impressed as well (don't hold your breath M fans, he's highly likely to end up a Buckeye).
The Warriors shot themselves in the foot many times, including on their first drive. A big kickoff return gave them possession well into Viking territory, but QB Braxton Miller fumbled a snap on the goal line, which Princeton recovered. The Vikings drove the ball past midfield on the ensuing possession, but a long pass was intercepted by Wayne at the 1-yard line. This didn't turn out so well for the Warriors, however, as the very next play resulted in a loss of yardage and a safety. Wayne was able to strike back before half, as a big Miller run on a speed option gave the team good field position, and he finished it off with a 20(ish)-yard touchdown pass.
After the half, Wayne struck again, as the Vikings fumbled the ball on the first play from scrimmage, which the Warriors recovered inside the 10-yard line. Miller ran the ball in on an option from about a yard out, giving the team a 14-2 advantage. As the game turned to the fourth quarter, the rain picked up, and the play became a little sloppy. As Wayne was trying to run out the clock, a shotgun snap over Miller's head went out the back of the endzone cutting the lead to 14-4. As Princeton started driving the field to bring the game within a single score, a fumble led to a scoop-and-score for the Warriors, providing the final 21-4 margin.
Talbott was the Warriors' defensive MVP, e-fact. He was constantly in the opposing backfield, whether he was lined up at tackle or end. He was a quick-penetrating type, and even when the Vikings started trying to counter against that (eventually), he was harassing QBs, forcing running backs into his teammates, and generally being a disruptive force. He doesn't have the biggest frame in the world, but there is certainly potential to add some mass and be a quick-penetrating "SEC-style" (ugh, shoot me) defensive tackle when he arrives in Ann Arbor. Trust me, he may be a little underrated because he's a tweener, but I think this kid is an absolute steal.
Miller had some struggles, be it from a wet field, first game jitters, or even just a bit of inexperience. That said, the dude can freakin' play. Though his dad says he doesn't want to play in a college offense where he'll have to run the ball much (note: Terrelle Pryor ran 139 times last year, and passed for 165 attempts), he is rather fast, and has super quickness and agility. Though he's likely to end up playing in Columbus, he's someone that Michigan should really try to sway for next year's class. Wayne was running a spread-zone offense, with a QB read much of the time, so it's not something he'd be unfamiliar with. He's a very good fit for Michigan's offense, and would allow for Cornelius Jones to switch positions if need be.
Photo Gallery (Video in next week's Friday Night Lights post)
On Thursday I posted my impressions of the luxury boxes going up in 2010 and offhandedly mentioned that Michigan is constructing a money factory, or "mint." A reader challenged those assumptions with numbers:
I am quite surprised that you describe the stadium expansion as a "money factory" or anything like it. Remember, the cost of this project (even if it comes in at budget) was set at $235M. [Editor's note: He later corrected this email: the overall cost for the renovations was $226 million.]
Looking at the Athletic Department numbers, and assuming they sell every seat and find folks to pay for everything they put a price on for naming rights, I don't see this as anything more than a break-even proposition. They list $56.3M in naming rights ($33.45M of which is apparently spoken for), which gets the amount they need to finance (I am assuming they are financing it, but even if they are not, there is at least an opportunity cost for the money they are using) down to $178.7M (235 minus 56.3). Taking your $5.7M number for the Suites revenue per year, you can add $1M for Indoor Club Seats (250 @ $4000 per), $6.2M for Outdoor Club Seats (2750 @ an assumed average of $2250), and $1.3M for Chairback Seats (650 @ $2000). The annual total is approximately $14.2M. At that annual payment, it would take 30 years to pay off $178.7M at a 6.88% interest rate. At a 5% interest rate, it would take 20 years.
In 20 years, these "luxury" places will need considerable renovation, I would guess. If they do not sell all of the naming rights or all of the seats, they will have to pay for a longer time to get this paid off. Even Mr. Martin never said this was to be a money maker. He claimed it was the only way to pay for needed upgrades to the existing stadium. However, now, the aisle widening (which I do not really understand, because the bottlenecks are the entrances to the sections, and I don't think they can do anything about those) is not happening as part of this original project (which is to be done in 2010), and the seat widening may not happen at all. I agree that they seem to be doing a first class job of what they are doing, but, other than to provide a few rich guys with fancy digs, I do not see this project as a financial winner. Please help convince me I am missing something.
I thought the assumptions above were pessimistic. Not all of the money in the renovations is going to the boxes and holding revenue constant over a period of ten or twenty years is excessively conservative. Also, the assembled media was told specifically that the seat widening was on and given a timeline for that process. But I am not a business guy and I don't have the numbers at my fingertips to dismiss his point out of hand.
So I asked a guy who goes by the handle "rekker" who's close to the project and has been providing solid information on the construction since it was announced. He responded like so:
This guy is reasonably coherent, but his analysis contains a couple of big, incorrect assumptions and logical flaws. I’ll start with the analytical problems. I’ll then present what I think of as the proper way to consider this project.
1. Your emailer assigns the entire cost of the project to the luxury boxes and club seats. That’s wrong. The project consists of three distinct elements. Because they are intertwined, it is difficult to assign a precise share of the cost to each piece, but these are approximations.
- Long-neglected maintenance – including replacing all foundational concrete, replacing all benches, replacing all mechanical systems, replacing the press box, which is structurally unsound, etc.
The approximate cost of this (absolutely necessary) work is $60-75 million. Even if it there were no stadium renovation or premium seating, this work would have to be done over the next few years.
- Improvements that make the game day experience better for everyone. This includes new (double-decker) concourses, wider aisles, wider seats, new and more bathrooms, new concession areas, etc.
The cost of these “improve everyone’s experience” is about $75-90 million. So for items (a) and (b), we are now up around $150 million.
- The cost of the towers, which contain the club seats, luxury boxes, and the new lounges. [Editor's note: also the new press box.] The incremental cost of these is around $75 million.
2. The cost and financing details are much friendlier than proposed.
- The project cost is $226 million, not $235 million.
- The athletic department is covering $36 million of this cost out of existing reserves. They also plan to raise $40-50 million in naming opportunities ($33mm is in hand). So the net debt needed for the project is actually about $140 million (not $178 as he suggests).
- Because of the financial crisis, the AD was able to get a great rate on the bonds it issued for the project. They came in at just over 4%. Because the interest rate was so low, the AD decided to finance a total of $190 million, but this allowed it to retain about $50 million is cash reserves as a cushion. Net borrowing (since the cash reserve can be used at any time to pay off the debt) is $140 million.
- The carrying cost of $140 million at 4% (assuming a 20 year payoff of the principle) is $10.3 million.
3.The likely donations from the boxes and club seats are likely to be higher than the minimum required.
- The 82 boxes will provide a minimum of $70,000 per box ($5.7 million), but the AD estimate is that top-up donations given to secure better locations will bring this up to between $7 and $8 million.
- His estimates for the club seats are reasonable, but again too low. He presents the absolute minimums.
Club seat (and chairback revenues) will total at least $8.5 million. In reality, competition for the better seats it driving donations up. Zone 1 club donations are averaging about $5,000, vs. the minimum requirement of $3,000. This likely won’t play out over all seats, but the AD is confident that the club and chairback seats will produce more than $10 million in incremental revenue.
- So the total incremental revenue will come in at between $14.2 million and $18 million.
How to think about the project
UM has a large need. Maintenance had been neglected for decades, the bathrooms are medieval, and the flow in and around the stadium is horrible.
The AD could undertake a $150 million stadium improvement project with no luxury seating (items 1a and 1b above), and no clear way to pay for it. This would mean about $100 million in borrowing and a roughly $7.3 million annual financing cost. Or the AD could add luxury seating for an additional $75 million cost ($225 total), and ask those 4000 rich people people to cover the cost of the whole project.
Option 1 would require something like a $10 per game surcharge on all 100,000 tickets sold for every game for the next 20 years (7 million per year, 7 games, 100,000 tickets per game).
Option 2 has no surcharge for regular ticket holders. The overall project costs about $10.3 million per year to pay off, but the luxury seating crowd generates somewhere between $14.2 and $18 million per year in incremental revenue.
The AD has been generating annual surpluses of $5 million to $9 million for the past few years. Adding $4 – 8 million to this while covering the entire cost of the stadium expansion seems like a pretty great investment. And remember, this is all being done with no cost to the 100,000 plus people who will sit in the bowl each week.
Before someone objects that not all the seats are sold, I’ll admit they are right. But 70% of both the boxes and club seats are sold. And this is with a year to go. Even if not one more seat is sold, the current reservations would generate $9.9 million, just a few hundred thousand short of the carrying cost for the entire project. I’d bet on the over on this one.
While the project is perhaps not literally a “money factory”, it is about the closest thing we’ve seen in Michigan for many years.
[/insider, back to me]
We all love the Big House but we've probably all got horror stories about missing half a quarter because of congestion or excessive lines or (especially for women) bathroom overcrowding. And then there's always that one guy—you know that guy—who will battle you for every millimeter of space in your seat. And don't get me started on Incredibly Pointy Knee Guy.
When I took the tour, the SID repeatedly pointed out the new walkways, concourses, and points of sale across the stadium. The seat and aisle widening will be complete by 2013. And the entire stadium will be brought into ADA compliance. And the net cost to the bowl is zero, with the AD netting somewhere between $4 and 8 million per year above and beyond paying off the loan. Whatever issues you have will Bill Martin—and I have a few—financial acumen cannot be one of them.