Category Archives: Editorial

The Case For Mergers: Marrying The Big Four HBCU Conferences Into Two

“The way a team plays as a whole determines its success. You may have the greatest bunch of individual stars in the world, but if they don’t play together, the club won’t be worth a dime.” – Babe Ruth

0-1

Many years ago, HBCU Money called for the creation of HBCU super conferences. It is time we revisit that conversation. This time we hope to give more scenarios and a clearer picture of what we now believe is the right course of strategic action. We will simply focus on the schools currently within the conferences as opposed to previously making an argument for expanding beyond the current five HBCU conferences, the Gulf Coast Athletic Conference is the only HBCU athletic conference in the NAIA. This conversation will focus again solely on the SWAC, MEAC, CIAA, and SIAC, all are whom a part of the NCAA. Whether that should continue to be the case will be a conversation for another time – one we hope HBCU athletic alumni and administrations are less afraid to have, but that is likely not the case as far too many still desire to chase the dreams of competing against their PWI counterparts for “their” championship.

Between the four HBCU conferences in the NCAA, there are 46 HBCUs and 2 PWIs that make up the four conferences. The CIAA and SIAC both having non-HBCU members who have joined their ranks. More pointedly, the SWAC/MEAC have 21 member schools in their conference, while the CIAA/SIAC have 27 member schools. Most know that the SWAC/MEAC and CIAA/SIAC play in the same divisions with the former being FCS and latter being Division II programs. Geographically though, the SWAC/SIAC and MEAC/CIAA share more accommodating footprints.

Why are both of these things something too heavily consider? First, the divisions that the schools play in is vital to understanding the cost difference associated with different divisions. FCS schools spend more, are expected to spend more, and do spend more than Division II and Division III schools. The fact that HBCUs largely lack the booster power to maintain their FCS infrastructure, largely leaning on the backs of their students to drive revenues through student fees has always been a matter of concern and why some advocates have called for them to drop down to Division II where sports are significantly more affordable. However, in fairness to the SWAC/MEAC, the numbers for the CIAA/SIAC in their own right as it relates to revenues, expenses, and student fee subsidies has not been compiled and scrutinized as it has with the FCS HBCUs. On a percentage basis things could look eerily the same. The NCAA reported in 2011-2012 that Division II member schools with football incurred a net loss of $4.5 million per year, while schools without football incurred a net loss of $3.6 million. While $900,000 does not seem like a huge difference, in the world of HBCUs where every dollar is dire it is worth noting in the conversation. This means if the CIAA/SIAC held the median, then the two conferences combined for an annual loss of $112.5 million as it pertains to the HBCUs in the two conferences. The SWAC/MEAC in 2017-2018 were losing a combined $150 million annually (without student subsidies). Also, a key factor to take note of is the cost between FCS and Division II conferences by the NCAA, “Division II institutions contemplating a move to the Division I Football Championship Subdivision (FCS) will likely be spending significantly more money as the median net expense was over $10 million in Division I FCS versus $4.5 million for Division II programs with football.” A factor of 2.2 between the two divisions.

Second in the conversation is the geography. A major factor in expenses for institutions. Travel costs alone can tear into a school’s athletic budget and the greater the distance the more the cost, obviously. Instead of buses, now it is planes. Instead of a one night in the hotel, now you need two. The cost can escalate quickly, which is why many colleges try to maintain their non-conference schedules close to home. This by its very nature means that a natural merger between the SIAC/SWAC and the CIAA/MEAC would make the most geographic sense. It would provide ample opponents in proximity and in-state greatly reducing costs across athletic departments. The linchpin is of course what division would the member schools play in. Do the Division II schools take on more cost to go up a level and hope they can increased revenues can support this? Winston-Salem State University tried it and quickly realized, not likely. What exactly FCS HBCUs are holding onto of not dropping down to Division II seems to be anyone’s guess at this point other than the belief that eventually they will rise to the FBS, join a Power 5 conference, make millions upon millions, and compete for a national championship against Alabama. A perfectly sensible (delusional) strategy somewhere. The path of least resistance says though that the divisions trump geography.

Lastly, the mergers would give something that small schools like HBCUs need – scale and cooperative ventures. Power 5 conferences are profitable because of three simple factors and the athletes on the field (albeit a nice piece) have little to nothing to do with it: 1) being able to put 100,000 people in the stands, 2) television contracts because of the alumni base size, and 3) boosters who shell out annually more money than most HBCU athletic budgets have. For HBCU conferences, the scale that doubling in size would bring along with the cost savings would be immeasurable regardless of the pairing structure from four to two. This could be magnified even greater if the five HBCU conferences would agree to form the HBCU Athletic Association, but for now, baby steps.

There is no denying that what HBCU athletics need most – like the schools themselves – is ways to drive revenue that do not rely on the backs of their students. HBCUs themselves rely heavily on tuition revenue to keep the doors open and HBCU athletics rely heavily on the students fees that most students and parents do not even know are in the small print being used to fund said athletic programs.

 

HBCU athletics is still an oversized concern for HBCU alumni who should be focused more on things like research, endowments, graduation rates, student loan debts, and the like. The notion that sports will bring in financial sustainability to HBCUs is wishful thinking on the best days. However, how a school manages its athletics and athletic budgets can make or break institutions if done so poorly. If we are insistent on sports, then it should be done so in a way that allows for the institutions to run those departments in a fiscally responsible way. and is far less reliant on students having to assume student fees that are being paid for with student loans. Scale in business is a prime way to cut expenses, increase revenues, and ultimately (hopefully) find a potential path to profitability or at the very least not have to rely on student fees being 75 percent of athletic revenues. To achieve scale, institutions or organizations often either merge or acquire and HBCU conferences should undoubtedly consider the same. 

 

HBCU Money™ Turns 10 Years Old

By William A. Foster, IV

The most basic question is not what is best, but who shall decide what is best.” – Thomas Sowell

A DECADE! HBCU Money is still here, still growing, and still strong. We continue to be here to ask the hard questions, present strategic analysis, and be objective about African American and African Diaspora economic, finance, and investment from an HBCU and institutional perspective. The HBCU Money culture remains deeply rooted in our Pan-African values in how we observe the investment world. This means that everything we see will always believe that African America and its institutions will always be stronger together and even more empowered as they connect and partner with our brethren African Diaspora institutions and the larger Diaspora ecosystem.

What does the next decade hold for HBCU Money? More. The original goals of HBCU Money have not changed and while the path there has taken longer than we expected, our constitution is as strong as ever. We plan to expand our staff, our coverage, and the mediums through which we provide information.

Thank you to those who have been there since the beginning, who have joined along the way, and all of you who continue to be our champions.

Editorial Rerun – In Memoriam: The 100th Anniversary Of The Black Wall Street Massacre

First published on June 1, 2012 for the 91st anniversary of the Black Wall Street Massacre and a foreword from an article done by the Atlanta Black Star.

“The dollar circulated 36 to 100 times in this tight-knit community, according to sfbayview.com. A single dollar might have stayed in Tulsa for almost a year before leaving the Black community. Comparatively in modern times, a dollar can circulate in Asian communities for a month, Jewish communities for 20 days and white communities for 17, but it leaves the modern-day Black community in six hours, according to reports from the NAACP.”

By William A. Foster, IV

Remember that life is neither pain nor pleasure; it is serious business, to be entered upon with courage and in a spirit of self-sacrifice. – Alexis de Tocqueville

This is the first year I’ve had a chance to remember Black Wall Street on the very day that in a 12 hour battle a model community of American aspiration would be destroyed. It has always been at the heart of my economic and institutional development beliefs. I once railed on twitter that I wish Spike Lee would make the movie of Black Wall Street. Although, I dare say he’d run into even more problems than he did with Malcolm X. The threat of social and economic power coming to African America is much more frightful than one man.  I’ve even griped that my issues with Dr. Cornel West and his ilk  who want to speak “truth to power” is they ignore the model of the greatest moment in African America’s social and economic history as well as the very basis of how capitalism works. Our own fault for listening to a theology professor instead of our own economist. I always say there is “No Country for African American Economist” in the African American community. We’d rather speak to power than build our own. The story of Black Wall Street in Tulsa, OK is one of those moments where if we’d learn from history it would be worth repeating it. Instead, we’ll ignore our history to our own peril.

Many of us have a hard time imagining a place where African Americans owned and controlled as Mike House documents in his research “twenty-one restaurants, thirty grocery stores and two movie theaters, plus a hospital, a bank, a post office, libraries, schools, law offices, a half dozen private airplanes and even a bus system”. Just this economic power alone in one centralized place makes one realize how far we have fallen. Many of us simply see nominal gains in income and assume we have progressed. Not realizing that capitalism’s power and reward ultimately rest in the institutions you own and control.

I have tired of the marches. I have tired of the “leaders”. I have tired of the speeches. I have even tired of my own writings. I am tired of telling us we are poorer today than we were in 1921. I have tired of our dependency on liberal ideology that says wait for a government to do the right thing by us. The government does the right thing by those who have the economic means to grease it. We simply need to build communities that we control and own. We need to build institutions that we control and own in those communities. We need to build social, economic, and political partnerships with Africa just like every other group in this country has with its ancestral homeland which creates a global power. We then need to use that social and economic capital to influence the political system to protect our social and economic interest. This is what made Black Wall Street so powerful and why it ultimately had to be destroyed. They were on the verge of leveraging their influence into the political system which would have allowed them to control Oklahoma. Can you imagine that?

We have HBCU communities that already are built to become Black Wall Street reinvented. Over 100 of them. Less talking. More building.

For the entirety of the events of June 1, 1921 just click the date.

HBCU Money™ Turns 9 Years Old

By William A. Foster, IV

“I still believe that if your aim is to change the world, journalism is a more immediate short-term weapon.” – Tom Stoppard

It is hard to believe that it has been nine years since HBCU Money was founded. It began with a conversation with Jarrett Carter, Sr., founder of HBCU Digest, about the lack of economics, finance, and investment information from an African American and African Diaspora perspective. He simply said, why do you not start one then. Challenge accepted and a challenge it has been. HBCU Alumni Owned media across the spectrum continues to fight to be a real and present voice in the ever changing landscape of media. Both trying to push the old guard forward and try to keep up with the competition and outsiders that seeks to control and own our narrative. They often seeing the value of our content, but with wretched intentions. This has and continues to be one of our great fights.

To be a voice of a community is an immense responsibility. Holding decisions makers accountable, helping inform the community in an unbiased manner, and yes, at times shaping the conversation. Sometimes it has been the duty of HBCU Alumni Owned media to present thoughts and visions that are ambitious and bold into the conversation about what is possible. It is a gentle balance that must be minded.

Going forward I will continue to help build HBCU Money, HBCU Politics, and our other media assets to be a formidable force for empowerment for the HBCU community and Diaspora. This I believe to be part of my life’s work. I am thankful for those who continue to fight along side me and for us.

The Cultural Danger Of Covid-19: A Devolution Of Intellectual Progress

By William A. Foster, IV

“A man only learns in two ways, one by reading, and the other by association with smarter people.” – Will Rogers

I am rarely one who likes to write qualitative pieces over quantitative ones, but for the moment I am going to make an exception. I can give you numbers about how the economy is suffering and is going to continue to suffer for the foreseeable future. I could give you the number of cases, deaths, lack of PPE numbers, and percentage of overworked medical and essential workers. I could go on and on and on with numbers, I am economist after all, but here is the reality of all those numbers – they are bad, real bad, and will be bad for sometime to come. Instead, what I would like to discuss is an acute qualitative cultural loss we may potentially experience and perhaps give us an opportunity to think about what this very new world could look like that we are about to embark upon if we are not proactive in maintaining a core essence of our humanity.

The world we are entering will be far more online and far more physically distanced from each other both on a micro level and global macro one. Everything from work, school, and socializing. Many would argue that online college is the way of the future. This maybe true, but people forget one of the most critical components of college in person is the social aspect, the relationship building that simply can not currently be replicated online. A few decades ago, I was a freshmen at Livingstone College in Salisbury, NC and there I would meet my three best friends that I am sure will be that for the rest of my life. Our meeting was happenstance. None of us had the same major, personality, or interest. We called ourselves the Variety Pack because nothing about us was alike, but alas, we found each other, bonded, and formed a brotherhood that has stood the test of time. For all the differences of course, two of us did share the same Algebra/Trigonometry class. The class was an 8AM class and the pain of getting up for it when you are not a morning person can not be overstated in my case. However, myself and Rashad, the one of the said Variety Pack with whom I had the ungodly morning class with, loved to sit up and debate theology many nights. Rashad was/is a devout Christian. I on the other hand am something of a spiritual nomad you might say, but am fascinated by the intellectual aspect of religion. One particular night in our dorm hallway we got into one of our intense discussions and the hours clearly raced by because before we knew it the sun was rising. Sleep? Forget about it. We both agreed we would get ready and meet for breakfast and try our best to stay up through class. Moments like these and many more are what built our bond and there is simply no way to replace it online. People from different backgrounds meeting, sharing an experience, bonding, learning from each other, evolving, and developing their understanding of the world.

Simply put, COVID-19 has the potential of sending us back to the dark ages in terms of cultural evolution and development. Thousands of students who study abroad every year will no longer get to do so. Student exchanges, especially from China and Asia in general, will be looked at with heavy skepticism if considered at all. Americans, who are already known to be culturally hubris and inept, often failing to travel much and experience culture even within the United States will be even more isolated. Tourism and vacations that allow us to experience distant lands and bring back with us new ideas will be vastly reduced. Academic tourism for professors who may themselves spend time as visiting professors at different universities will be greatly hampered. Cultural developments like fusion cuisines from different parts of the world will retrench and much more will simply begin to deteriorate. The rise of intellectual incest, a term I use when someone or an institution is only receiving ideas from the same petri dish of thought. If a student receives all of their degrees for instance from the same institution, this would be an example of intellectual incest. Because the world is now going to shrink itself in an effort to protect itself, there is a unknown danger that may start to form. We have seen the world where people are exposed to different cultures, ideas, and ways of life and we have seen a world where people are isolated and xenophobia forms out of it.

The danger that we become a less tolerant, less compassionate, less understanding, and less intellectually evolved is a real possibility that could have far reaching societal implications for future generations. In a world where terroristic nationalism has been on the rise in far too many countries, COVID-19 may give many the “pass” they have been looking for to justify retrenching from a world that was evolving and developing towards efficiency of its intellect. Sharing best practices the world over is something we need more of and not less. This is by no means to say we were in Utopia. I do not believe in Utopia and not sure I would I enjoy living in it. Conflict has its place within measure in a society. Disagreement has its place within measure in a society. My Global Economic Environment professor, Dr. Catherine Mann, taught me years ago in business school that if you do not truly understand your opposition’s position, then you can not truly understand your own. To this day she is one of the most brilliant and wisest people I have ever met and there is an acute truth in what she said. How does one know their position is best if they have nothing to compare it with? Plan A maybe good, but an objective view of Plan B may allow it to have tweaks made to it that can make it great or perhaps it is Plan AB that is great. Without that engagement, we will be taking steps back in the interactions that create evolution and development of thought.

I am not sure when we will come out of this state we are in and I am not sure how we will be when we do. What I do know is that fear can drives even the fiercest animals into hiding and that fear for humans could undo hundreds of years of intellectual progress. Great ideas will become fewer and farther apart if that is true. The grand ideas of humanity like cleaning up pollution, reaching Mars and beyond, eliminating poverty, and so many more will take hundreds of years longer to accomplish than they otherwise would have. Yes, the world has forever changed and we will have to interact with each other differently, but make no mistake about it, we must continue to interact. Can you imagine a world where peanut butter never met jelly? Neither can I and I do not want too.