Inside sports business
Plenty of eyeballs popped when the University of Washington announced in early September a record 10-year, $41 million Husky Stadium naming rights deal with Alaska Airlines.
But while the largest deal of its kind in U.S. college sports allows the university to reap new cash the next decade, Husky fans hoping to see the football team’s fortunes reignited overnight are likely in for some disappointment.
After all, this isn’t Major League Baseball, where teams can try to outspend rivals limit-free and quickly stockpile the best talent available. The Huskies won’t be throwing their newfound millions at quarterback Vernon Adams Jr. so he’ll swap his Ducks jersey for the purple and gold.
What the deal does is make it easier for the school’s entire athletic program to meet current and future costs. Those costs have risen since last year, when the Pac-12 introduced sweeping reforms that include guaranteeing scholarships for a full four years, enhanced medical coverage and additional financial support for players wishing to continue their education post-on-field career.
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“It’s significant for them, it really helps at the margins, but it’s not going to transform the athletic department,’’ says Pulitzer-winning journalist Gilbert Gaul, author of the new book Billion Dollar Ball: A Journey Through the Big-Money Culture of College Football. “They’re not going to be able to hire Nick Saban. They’re not going to be able to go out and announce that they’re going to build a $300-million stadium for something. It’s not of that magnitude.
“But,’’ he adds. “You’d rather have it than not have it.’’
Indeed, as Gaul points out, the most taxing costs for athletic departments these days aren’t scholarships — which a significant portion of the Alaska Airlines money will go to. Instead, it’s what teams pay football coaching staffs that often consumes the biggest budget money and helps determine winning and losing on the field.
The Huskies are already paying head coach Chris Petersen $3.4 million this year and $18 million over the life of his five-year deal. To upgrade the head coaching spot alone from Petersen to the University of Alabama’s Saban, they’d have to double that base salary and eat most of the $4.1 million annual Alaska Airlines intake.
So, even several million dollars per year has its limit as far as impact. Don’t forget, the naming rights money is supposed to be for the entire athletic department, not just football.
Still, as Gaul, mentions, you’d rather have that $4.1 million in “found” money than not.
And while the Huskies won’t be using it to buy their way back to prominence, there are areas they can bolster and improve their long-term ability to compete recruiting-wise.
NCAA rules changes now allow top FBS schools to implement “cost-of-attendance” incentives that essentially pay players a stipend for personal expenses and travel costs. As such, schools are rushing to revise prior estimates of what such costs entail for their student populations in order to offer higher payouts to athletes as a recruiting incentive.
Some schools — Alabama and Auburn among the notables — have hiked estimates considerably and now offer stipends exceeding $5,000 per player. The U-Dub has pegged its stipends at $2,679, according to figures compiled by the Chronicle for Higher Education, leaving it only the sixth highest in the Pac-12.
But with the new Alaska Airlines money set to roll in, the U-Dub could revise its own estimates — nobody is capping the stipends just yet — and offer more.
Meanwhile, Utah, according to May figures, is paying football players a conference-high $3,574 while Washington State offers $3,542.
U-Dub athletics spokesman Carter Henderson confirmed that, beyond scholarships, some of the new money is indeed earmarked for these new “cost of attendance” stipends and the Pac-12-mandated medical coverage increases.
Henderson grouped those two things in with so-called “student experience” initiatives, along with sports psychology and strength and conditioning programs, meals, training and competition facilities.
Those initiatives, he added, all “play a major role in how our coaches recruit student athletes’’ and are expected to receive the new money. No exact breakdown of allotment is being given.
But indeed, if the plan is to use the new money to bolster stipend payouts to the football team, we’ll know more by this time next year.
It’s possible the school could use the new money simply to cover the higher cost of maintaining the status quo.
A Seattle Times report last year found the school’s athletic program turned a profit of nearly $9 million in 2013 and has used university subsidies to bolster financial reserves. That profit hasn’t declined, especially with a hefty Pac-12 Networks television contract funneling extra millions to the Huskies each year.
So, the school, in theory, could already afford to cover any increased costs and then some.
We’ll know in a few years time whether the new Alaska Airlines money truly helped give the Huskies a competitive boost. Or, whether it’s simply another way for the athletics department to meet rising costs without putting a dent in its profit margins.