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A Continued Discussion On The Financial Priorities Of Cal Athletics

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TwistNHook: Last time we discussed the increasing "arms race" of college football, including increasing assistant coaches' salaries. We pick up today with Ragnarok being sad.

Ragnarok: It saddens me, too. It's the "arms race" aspect of this that bothers me most. Everyone would like to have a athletic program like Texas, where football generates a huge amount of revenue that can be poured into other sports, or even back into the University itself. However, the zero-sum nature of competitive sports means that, for every winner, there is a loser, and when it takes so much winning to be profitable, that means there is only room for so many of these programs in Division I-A. In theory, Cal could spend its way to the top of the Pac-12, and in doing so, create a massive revenue stream that more than makes up for the dollars invested. In practice, the rest of the Pac-12 would be spurred to do the same, diminishing the returns on Cal's investment, both in terms of dollars and wins. Coaches across the west coast get richer, but there remains just 54 conference wins to be spread among 12 schools.

Football is the driver here -- I don't think anyone would dispute that. But since Cal does not have a Phil Knight or a T. Boone Pickens to drop unlimited funds into the athletic department, Cal must be smart with the budget it has. If football is to help subsidize all of the non-revenue sports, it must not only bring in lots of revenue, it has to be profitable. The athletic department can't be cheap -- that approach has proven not to work -- but it can't afford to throw money at every talented coach and assistant it would like either. They have to pick their spots, get talented people at reasonable value, and try and find people who want to be at Cal, rather than just mercenaries willing to work anywhere for the highest dollar amount.

Of course, even if Cal gets football right, the other 26 sports are not off the hook. They need to be focused on competing at a high level within a reasonable budget as well. Among Pac-12 schools, only Stanford sponsors more Division I teams, and those costs add up. Every sport is going to have to focus on being self-sustaining from a financial perspective, and that's just reality. In California's current fiscal climate, the Berkeley campus won't support anything else.

Finally, I think the athletic department needs a more professional approach to marketing. A lot of opportunity was lost last year in the awkward move to AT&T Park, and anyone who has been attending basketball games recently (and that's not enough of you) knows that the quality of the product on the court far outstrips the support in the stands (with last Sunday's game vs. Stanford being a notable exception). Compared to other, similar businesses, Cal does not come close to maximizing its revenue streams. I'm not sure why this is, other than I'm not sure that the Athletic Department operates enough like a business.

TwistNHook: But the thing is that we aren't comparing like things here.

The choices aren't "spend less on football" or "spend more on football." The choices are "spend more on football" or "spend ASTRONOMICALLY more on football." This whole discussion stems from Cal being either unable to unwilling to pony up the additional $200,000-unknown millions necessary to keep two key coaches (and keep the salary structure reasonable so a DLine coach isn't making more than a Defensive Coordinator etc etc etc).

So, the question is do you spend a SHITLOAD more money on football to maintain essentially the status quo or do you let other schools do that and then hope to get some pretty good coaches at more reasonable prices.

Spending the ASTRONOMICALLY more to keep the current coaches (or lure other big name coaches) does not necessary mean that Cal is going to do better. Yes, this year, it had a direct and negative impact on recruiting and the team. No denying that. But I think it is a once in a generation situation that we just encountered. Hopefully!

So, I don't find it unreasonable to try to find hungry and effective coaches willing to coach at reasonable rates and then use the $200,000-unknown millions for other purposes.

Like paying off our massive SAHPC debt.

NorCalNick: I'm someone who loooooves our non-revenue sports. I write about women's basketball and baseball, and I'm very much looking forward to writing about soccer and track and field and goodness knows what else the Pac-12 network will air. Hell, I've attended a rowing championship!!!

So this is an important topic. On the one hand, the sports I care about are dependant on the success of football. Cal's lack of historical football success has arguably negatively impacted sports like baseball because Cal hasn't been able to afford to support the program in a way that would allow them to consistently compete on a national level. So I want to see football get everything it would reasonably need to succeed.

But like Kodiak mentions, I'm wary of the attitude that we need to immediately throw as much money as possible at the football program. As far as I'm concerned, Cal is already spending close to the ideal amount on football as is. They've rebuilt the stadium, built entirely new facilities, and proven that they are willing to pay handsomely for a head coach. And reportedly they were very willing to offer a major pay raise to a very young assistant coach.

I find myself conflicted from a moral perspective. Cal's success on the football field is important enough that I'm willing to consider accepting certain actions that I'm not entirely comfortable with. Could you imagine if Cal dropped half a million dollars to appease an assistant coach that many Cal fans are now convinced doesn't do things the right way? What measures are acceptable because the ends justify the means, and what measures compromise the values we as alums believe in?

Atomsareenough: Well, what's "ASTRONIMICAL"? Is it spending another million+ dollars a year on finding/retaining top quality coaches? Maybe (and it seems like the answer is yes to you, Twist) that is astronomical, with whatever form of capitalization you prefer. I think that you have to put it in context, though. Do those millions translate into additional wins? What's the value of a marginal win? I suspect that each marginal win during a season is increasingly more valuable. That is, the 11th win is more valuable than the 10th win which is more valuable than the 9th win, etc... The more wins you have, so many more people pay attention to you, buy tickets, buy merchandise, elite recruits want to play for you, viewers will tune in... you get the idea. So, I think the questions we should ask ourselves in terms of the budget is, are these investments in staff or whatever else likely to translate into wins, likely translate into extra revenues, and will it be enough pay for themselves or better in the long run?

The point about the SAHPC debt is a good one, but another way to think of it is, we've already invested hundreds of millions of dollars into those facilities, so is it worth spending a little bit more to make sure we can reap the full dividends of those new facilities?

Look, I share a lot of the concerns here about the value system and the arms race, but I think we also need to take a little bit of a quantitative approach and figure out whether we are maximizing the program's potential. Nick seems to think we're spending "close to the ideal amount" on football, and you know, maybe he's right... but I'd like to see that validated by an actual business strategy that pencils out, rather than simply what feels right. I also want to give a hearty second to ragnarok and his point about how our marketing could be so much better.

HydroTech: If somebody could demonstrate and guarantee to me that if we put more money into Cal Football that it would in turn produce more money, then I would be all for this idea of making Cal Football the #1 priority of athletics. However, I think a lot of people have suggested concerns that more money may not necessarily mean more wins or enough wins to justify the money. The ROI on this sort of investment seems fairly speculative. And as Ragnarok pointed out, there are so many games to be won between all these Pac-12 teams. If everyone pours more money into football, then all our efforts will seemingly negate each other rather than give one team a guaranteed win. Cal may be forced to pour more money into football not necessarily because it's the #1 priority, but because failing to do so might put Cal dead last in this new college football arms race.

TwistNHook: Obviously none of us can ever crunch those numbers. I wonder if bean counters at athletics have done those analyses. It would be interesting to know the answer here.

CBKWit: I think we're all basically in agreement that we need a big ROI from football in order to sustain our other sports. If football is not bringing in a ton of cash, we're not going to have the money to pay for the other sports. I agree with Ragnarok and NorCalNick that the arm's race aspect is, at best, morally ambiguous, and I share their discomfort in the increasingly ignominious world of college football and recruiting in particular. However, if we want to see any significant value from our football program, it has to be successful.

I mentioned at the top that I think there are basically two ways to field a successful football program - you can out-recruit other programs and beat them by fielding a more talented team, or you can outsmart or out-coach them. I think it's painfully clear that Tedford's program is not going outsmart many of our opponents, and lacking a decided talent advantage, I highly, highly doubt we will see results beyond what we've had for the last 5 years - 7 to 9 win seasons and mid level bowl appearances. If Tedford is going to reach a BCS game, he's going to need a very talented team, and as we just witnessed, it's going to be difficult to out-recruit the rest of the conference without shelling out more money. If we want to spend less to get more, we would need a different coach.

HydroTech: Since CBKWit suggests that Cal's problem is Tedford's ability to out-coach the other teams, then I pose these questions: How is Tedford failing to out-coach the other teams? And what can Tedford do differently to out-coach other teams?