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When I decided to turn on a paywall, I told everybody that if we hit the benchmark for financial viability, I wanted to use some of that subscriber money to pay freelancers. We hit that benchmark in just a few days, and today, I’m excited to publish the first freelance story on Extra Points. At the end of this newsletter, I’ll share more details about freelancing for Extra Points, including rates and submission guidelines.
This story comes to us from Matt Stahl, a senior at Western Kentucky. Matt can be reached at @Mattstahl97 on Twitter, and at firstname.lastname@example.org.
As you’re probably aware, the price of oil is down.
Matt wrote about how the price crash might impact Power Five programs last week. But what about the lower end of the Group of Five? What about the Football Championship Subdivision? Do those pressures look the same for Texas Southern and Texas A&M, or is it different?
For this story, I’m choosing to define the Oil Footprint as the top five oil-producing states, which, according to statistics from the U.S. Energy Information Administration are Texas, North Dakota, New Mexico, Oklahoma and Colorado.
Of the D1 schools in that footprint, I looked at which athletic departments face the most potential financial difficulties based on what percentage of their athletic budgets come from outside contributions, which could rely heavily on oil rich boosters, and school funds, which will almost certainly drop, as states cut higher education funding.
According to a recent Houston Chronicle article, the state of Texas is already expecting to lose at least $300 million in higher ed funding due to:
“State-operated University Lands, a company that oversees oil leases on land owned by Texas, expects to send $700 million to the Permanent University Fund this fiscal year, down from $1 billion in 2019 after oil prices plunged to about $20 per barrel this year during a price war and the coronavirus pandemic.”
In addition to those funds, the state stands to take a hit in revenue from crude oil taxes, which fluctuate with the market value of oil, and from income taxes. Oil accounts for just under 2% of jobs in the state, according to Texas Labor Market Information, which counts jobs directly held in the industry. However, oil supports over 16% of jobs according to the Perryman Group, an economic analysis firm.
This could spell trouble for programs in the region, as the five schools that are most school fund-reliant in the oil footprint are in Texas. Those schools, based on school funds and student fees combined as a percentage of total athletic revenues in 2018 according to USA Today, are:
- Texas-Rio Grande Valley: 86.2%
- Stephen F. Austin: 82.8%
- Lamar: 80.7%
- Texas A&M- Corpus Christi: 80.6%
- Texas Southern: 77.4%
Stephen Kosovich, an economics professor at SFA, said that he believes if funding takes a major hit, smaller schools like his will be hurt worse than the state’s largest universities. However, he felt that schools like Texas and Texas A&M are more exposed to risk if football isn’t played.
“If our budget gets cut 10-15% it’s gonna affect everybody on campus,” Kosvich said. “There’s no way it couldn’t. I don’t know. Again, I’m not in a position to determine where the cuts would come from, whether coaches would be expected to take cuts. There’s limited things you can do. The NCAA has talked about suspending the requirements on the number of sports that you have and I could see some schools doing something like that.”
The NCAA denied a request to temporarily suspend the number of required sports in April.
SFA is an interesting case due to not charging students an athletic fee, something Kosovich cited as a way to protect the athletic department. Kosivich also wished to express that he does not speak for SFA, and any solutions he offered were hypothetical.
Kosovich also said that schools with growing enrollment, such as Texas State, which has experienced steady growth since the 1990s according to its website, might be able to stave off trouble.
“[Texas State has] grown in enrollment substantially,” Kosovich said. “And obviously they’ve risen up the ranks as far as sports as well. I don’t know, this is my speculation, but when enrollment is increasing, you can increase student fees and not lose students.”
A decline in oil-related private donations could hurt lower level Texas schools, but programs in North Dakota might be even more at risk. Within the oil footprint, the two programs most reliant on private donations for their athletic budget were North Dakota State, at 23.9%, and North Dakota, at 16.4%.
For those programs, the state’s oil boom began relatively recently, so they may not have the depth of industry alums as schools in Texas or Oklahoma might, places where folks could have worked in the industry for years.
However, David Flynn, an economics professor and department chair at UND, said that the recency of the boom could also work against the state’s donor base.
“People haven’t yet been able to develop large pools of assets as a result of say, 20 or 30 years of oil success in a sustained fashion,” Flynn said. “I suspect that there’s some mitigating factors and that there’s some who are going to be insulated from it, but I think there’s still a significant risk here.”
Of the 59,000 results for people listing NDSU as a school, only 635 are listed as being in the Oil and Energy industry. Out of 60,000 from UND, 1,300 are in O&E. Those are much smaller percentages than at programs like Tulsa, Oklahoma or Texas A&M. Flynn said while the donor base was a major concern, a drop in state funding could be a bigger issue.
“I think it’s gonna be a very, very difficult situation to go forward,” Flynn said. “The size of the drop in dollars that we would expect to see from taxes as a result of the oil price change, it’s gonna be pretty sizable and pretty important.”
As for the drop in funding’s effect on the state’s athletic department, Flynn said that he didn’t know what the future will look like. However, he said he thought missing an entire football season would have less of a detrimental effect then the possible missing donations.
“I don’t think that there would be, of necessity, just sort of across the board elimination of athletics,” Flynn said. “But I think everything is gonna have to end up being on the table for discussions at least, even if some of these things maintain rather than get cut.”
So how are the conferences preparing for the revenue loss? I reached out to C-USA, the Sun Belt, the Southland and the SWAC to see, however, only the Sun Belt got back to me, directing me to a March 26 teleconference, where Commissioner Keith Gill didn’t discuss oil directly, but did say that the Sun Belt was preparing for a possible revenue decline.
“We’re doing our modeling right now and trying to work with our institutions so they can identify where their financial risks are,” Gill said.
“Some of those are unknown.”
If you are interested in pitching a freelance story to Extra Points, shoot me a DM at @MattBrownEP, or an email to MattBrownOhio@Gmail.com. I’d love to discuss all sorts of college football related topics, but I am most interested in
- Title IX stories
- Deep college football history stories
- Stories on political issues that have a college football angle
- Interviews with experts in the college football space
- Higher education trend stories
I am less interested in #takes, especially on the field stuff, or personal essays, but hey, I’m not ruling it out. Feel free to pitch me.
I’m paying everybody that gets something published here. My rate is based on what I pay myself for each Extra Points newsletter, which varies between $70-$100 bucks as of May 6th. I am also happy to pay a bonus for each new paid subscriber that signs up after reading the freelance piece. I pay out via Venmo or mailed check, three days after publication, so you have enough time to get a fair calculation on subscriber bonuses. I’m not going to put freelance stories behind the paywall.
As my subscriber base grows, I’ll want to revisit both my freelance rates, and the number of submissions I can publish each month. I plan on sharing a financial report on a regular basis, so I can be as transparent as possible with my readers, this community, and potential contributors.
Anyway, if you’re interested in talking about this stuff, or have other article ideas, questions, comments, or angry missives, drop me a line at email@example.com.