So uh, what happens if we hit a recession?
This newsletter has talked about headwinds facing higher education a fair amount. But what about the big elephant in the room?
Good morning! No catchy intro this morning. Let’s get into it.
NC A&T to FBS? It’s a “thought exercise”
Monday’s Extra Points featured a tweet from Steven Gaither of HBCU Gameday which said that NC A&T was looking into jumping from FCS to FBS:
Could they pull it off? Well, that’s a fun thought exercise. Almost everything about NC A&T is different from the last few schools that have made the jump to FBS, and maybe not all of the traditional assumptions about the merit of such a jump apply.
Apparently, it was meant to be just that, a thought exercise. From the News & Record:
But in his address at Friday’s Faculty Institute to start the new school year, A&T Chancellor Harold Martin brought up FBS during a PowerPoint presentation.
The slide that launched a thousand rumors reads:
DO WE WANT TO BE TRANSFORMATIVE
How high do we want to rise?
> R1 Research University
> Division 1 – Football Bowl Subdivision
Earl Hilton, A&T’s athletics director, cautioned outsiders not to take the chancellor’s remarks out of context.
“It was certainly not an announcement of any kind of transition,” Hilton said. “It is a thought exercise. It’s the chancellor saying, ‘Our best work is in front of us.’ We expect to continue to grow.”
“I’m not going to say it won’t happen someday,” Hilton said. “There’s nothing formally in place to discuss it right now. There’s no timeline. But it’s an exercise to talk about what transformative would look like in A&T athletics.
For a variety of reasons discussed on Monday, that makes sense. After all, there’s no obvious place for NC A&T to go, no obvious answer as to whether the NCAA would grant a waiver, and a whole mess of logistical and financial questions to answer. Even without necessarily needing to build a new stadium, a jump to FBS would require significant new personnel and institutional investments.
Gaither followed up with a story that gives more historical context to HBCUs kicking around a 1-A/FBS kind of jump. I remembered Florida A&M’s disastrous attempt, but Tennessee State pulled it off as an independent in the late 1970s, and other programs like Grambling, Jackson State, and Alabama State.
But I love a school actually asking themselves these bold questions. I think anybody outside of the championship contending tier of their football division ought to routinely ask themselves difficult questions about what their exact mission is for their athletic department. Do we want to win conference titles, knowing that requires a certain level of investment? If we aren’t willing to make those investments or sacrifices, is it worth maintaining our status quo? What are we really doing here?
As Gaither pointed out, NC A&T sold naming rights for their stadium, something kinda rare across FCS generally, let alone for an HBCU. They’re beating FBS programs. The program has juice at the moment.
But the worst thing anybody can do about a division change is rush it. There are a gazillion questions to answer, some of them difficult or unpleasant. But I can’t fault anybody for asking them and daring to at least dream big. And if NC A&T’s fundraising ability pays off, and more donors pledge to help the school take the next step (in a lot of different ways), maybe more opportunities will present themselves in a few years.
Hey….so what happens if we get a recession?
Another reason for NC A&T to be wary, or hell, for anybody to be wary, about partaking of any especially expensive endeavor could be fear of a recession.
I’ve written a fair amount about potential headwinds for higher education and college athletics generally. There’s reason to be worried many schools won’t be able to recruit enough students over the next generation, as our country produces less. Attendance is down nearly everywhere, and between that and student loan debt, there’s good reason to be worried about this potential rising generation of donors and booster club members growth to a level needed to sustain current rates of spending. Future TV windfalls are not a guarantee. Costs are likely to go up. You get the idea.
All of this is happening while the US economy is allegedly pretty good! So what happens if that changes?
The 2007-09 Great Recession in the United States saw teams and leagues slash hundreds of jobs. Corporations laid off millions of workers and cut pay and benefits — unemployment peaked at 10 percent in 2009 — while sports sponsorship spending was severely curtailed or canceled. The WNBA contracted a team and reduced roster sizes. Teams across sports froze or reduced prices on tickets and concessions. The NHL’s Phoenix Coyotes went bankrupt. The Arena Football League canceled its 2009 season. IndyCar’s Detroit Grand Prix was canceled.
Allen Sanderson, a senior lecturer at the University of Chicago’s department of economics who often writes and speaks about sports economics, said the threat of fans staying home to watch games rather than buying tickets and concessions at stadiums and arenas is the more immediate crisis.
“Given that I can watch the White Sox or Bulls on TV, and have more than a 19-inch black and white TV, drinking $1 beer instead of $10 beer in the comfort of the family room rather than freezing my ass off with 20,000 drunks is a reasonable accommodation whether there is a recession or not,” he said via email. “Executives in sports are worried about that. Going to the stadium used to be a much bigger event than being at home. With changes in technologies, I’d rather be waterboarded than having to watch a Bears game in Soldier Field as opposed to home. An eight-hour commitment rather than three; replays; no drunks or obnoxious guys blocking my view.”
Well, if Mr.Sanderson is correct, it sounds like college football isn’t the only sport grappling with big questions about attendance.
What might happen depends on how severe, and how long, a recession hits, of course. And the single biggest revenue stream for big college football programs, TV money, is relatively secure in the short term.
But anybody that depends on selling tickets to actually help fund the department, rather than a long-term investment in building a donor class, could really be sweating. If you’re unemployed, dropping $100+ bucks on tickets, parking and hot dogs to watch Tulsa play Temple becomes a much harder sell, you know?
Recessions can also make borrowing more expensive, which could complicate matters for any program who is looking to build a stadium or indoor practice facility. Even if the bank may be just as willing to give money, some of those rich donors might not.
Our recessions are often relatively short, but they have been shown to negatively impact college football spending in the past. For some schools in D3, or even at the bottom end of FCS or FBS, one strong push from negative economic indicators could be what pushes them down a level, or off the field completely.
It’s smart for schools to make big picture plans for their athletic departments. But if they haven’t tried to model how they might function if unemployment tics up, or consumer spending declines, now would probably be a pretty good time.
If you’re the praying type, send one to the Anderson family
Arkansas State head coach Blake Anderson will be taking a leave of absence to tend to his wife, who is fighting cancer.
If you’re the kind of person who prays, perhaps consider sending some towards the Anderson family. None of us know how long we have on this earth. Let’s spend that time we’ve got looking after each other. We’re all we’ve got, after all.