http://seattletimes.nwsource.
We already know that major college sports are corrupt, exploitative, and dysfunctional, but the actual numbers are shocking (thanks to an HBO Real Sports investigation and others). First, it's inconceivable that the org's running each bowls are classified as non-profit charities, despite earning over $250M combined each year. There used to be about 10 bowls, but now the number is up to 35. Even the most successful charities on the planet don't grow that fast, only scams and bubbles do.
The bowl org's claim they are charities because they purport to give 75% of revenues to the participating schools - institutions that benefit society in many ways. Yes, the perennial bowl participant football factories like OSU, Nebraska, and Miami have really used the money to provide top education and discoveries for America (often head coaches are paid much higher salaries than the most famous and productive professors). But in actuality, the avg. school payment is about 55% for the dozen or so bowls whose financial records were made available. The poorly-named Humanitarian Bowl only gave 27% to the schools. When confronted with these facts, bowl reps say they are saving the rest for posterity to pay out to schools "at a future date." Well schools are laying off employees, raising fees, and letting buildings crumble NOW.
The problem here is similar to the race to host the next Olympics or over-bidding to win an auction. Schools and communities are so obsessed with getting to a bowl (and the perceived value it entails) that they fail to consider whether it's really cost-effective. Part of the contract between the bowl and schools often involves paying for their own travel, and a guarantee to sell a block of tickets to fans, or the school will have to eat the cost of empty seats. But it's hard for small schools to get alumni and fans to travel across the country during winter holiday time (and eat the big costs of tickets, hotel. etc.), so some schools predictably end up on the short end.
The bowl gets paid no matter what, and then short-changes the schools with smaller contributions. Some bowls even forced the school bands to buy tickets even though they were providing free entertainment during halftime. So knowing all this, why do some cash-strapped schools still fall into the trap? They fall in love with the "prestige" of participating, and many coaches/athletic directors are paid bonuses for reaching a bowl. The bowl org's claim that despite these concerns, schools come out ahead in the end because the publicity will increase alumni donations and fan/student interest for the future. Of course it's very hard to quantify and verify this benefit, so we just have to trust them. And apparently schools do.
So maybe the bowls short-change schools, but they give back to the community, right? Bowls claimed that they've given "tens of millions of dollars" to communities and charities each year. But according to tax documents, the grand total last year was about $4M, or <2% of revenues. But that giving is still generous, right? Well not if you consider the tax incentives and other perks that cities and politicians offer to the bowls, sometimes totaling in the millions. Again, bowl reps repeat the Olympics argument that the event "pays for itself" with all the extra tourism and commerce. Sure, tell that to Greece. Remember that cities also have to eat the clean-up, security, traffic congestion, and other costs. The show examined the example of the elite Sugar Bowl and the financially depressed host New Orleans. The Sugar Bowl gave $1M to Louisianans, but took $6M from their state leaders. Former LA governor Blanco took thousands of dollars from the Sugar Bowl in campaign contributions, which is technically illegal due to the bowl's tax status. And in return, Blanco has helped to maintain this profitable arrangement, even to the detriment of her Katrina-ravaged, cash-hungry state.
Bowls are also lobbying politicians to fight any changes to the system that would hurt them financially, such as a move to a nationwide playoffs postseason format. They've used the profits that didn't go to schools/communities to sponsor lavish trips and "retreats" to discuss strategy and woo VIPs. The org's defend these actions as legitimate efforts to maintain and improve the quality of the bowls. How about executive compensation? The heads of MSF, Amnesty Int'l, and the Salvation Army all make less than $300K/year. The heads of some bowls take in $500-700K, despite managing a much smaller org than the true charities. In some cases, "honorary execs" are paid hundreds of thousands for a few hours of seasonal work per week. Despite their ludicrous pay, a former Fiesta Bowl exec (J Junker) was found to use bowl funds on golf and strip clubs. They give the usual Wall Street excuse - the market sets the going rate to recruit and retain the talent necessary for the job. So I guess "the market" just values a guy who sets up a single football game more than a guy who is in charge of helping millions of Americans day in, day out.
Again, imagine the opportunity costs of bowl profits that could have gone to the causes that they're supposed to go to. Nonprofits are not taxed because they serve a public need, but it seems that the bowls are making off with millions while actually undermining some critical public services.
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