Tag Archives: college sports

The 5 Steps To HBCU Athletic Profitability


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“Growth and profit are a product of how people work together.” – Ricardo Semler

HBCU presidents, athletic directors, athletic commissioners, and stakeholders gather around the camp fire. We are going to tell you a story of problem solving using critical thinking. Do not worry, this is not a scary story like the one you are telling your students and alumni currently. Many of you want athletics to be your legacy and are willing to mortgage every current student and burgeoning alumni’s future in order to see it come to fruition. Many of you think so far inside the box that Carter G. Woodson would probably blush at just how far you have taken his quote of controlling a man’s mind and how that control will make a man build a back door if one is not present. We even lie to ourselves that the door we have been relegated too looks like our neighbors front door just to suffice our ego. Refusing to even use the assets at your disposal like HBCU business schools, computer science departments, etc. to solve some of our institutions most basic problems.

You know what is not a basic problem? The $147 million that the SWAC and MEAC conferences are hemorrhaging were it not for the $142.5 million in subsidies that come primarily on the backs of their students. Even with those subsidies, the two conferences still managed a $4.6 million loss in the 2014-15 school year. Yet, the same playbook is rolled out every year to makeup for shortfalls. The infamous money games that alumni argue over every year as good or bad for their programs. Ultimately, athletic departments have made them part of their funding model usually in an exchange for treatment that would make Ike Turner blush. However, there is no plan and has been no plan seemingly offered by these HBCU athletic departments that would strategically some day let the money games be icing on the cake if they chose to play them instead of a vital necessity. There is always this talk of the players on the team wanting to test themselves against the “best’. The reality is they have no choice. Players do not schedule these games nor are they consulted. These games are scheduled by those that know if they do not play them, then there may not be an athletic department next year. There are five steps though that can allow HBCU athletics to actually make every program profitable: 

  1. Form the HBCU Athletic Association. Also known as the HBCU version of the NCAA. This is about ownership and leverage. Advertisers pay for schools or conferences that have large alumni bases, strong geographic footprint, and affluent alumni. Although HBCUs lack the latter, the former two is strong leverage when you approach corporate sponsors who are looking to get their brand in front of as many potential consumers as possible. There are 100 HBCUs that comprise geography in the Midwest, Southeast, and even Northeast if you included schools like Roxbury Community College in Boston and Medgar Evers in New York. The NCAA is able to make over $1 billion per year from the March Madness Tournament because it owns the tournament. Again, ownership matters. Having the HAA gives it a powerful economic scale that could go in and do something like buy the old Morris Brown stadium and convert it to a stadium, arena, hotel, and conference center that could host all of the major HBCU sporting events. Now, instead of getting almost nothing of the pie, HBCUs would have an opportunity to share in the parking, ticket, concession, and entertainment revenue pies that ownership over these facilities brings. Again, ownership matters.
  2. Drones. Okay, not just drones, but drones, cameras affixed to athletic facilities, and a website and app that you can purchase a monthly subscription for $10 per month just like Netflix that gives access to every HBCU sporting event for your alma mater and a special up charge for Classics. All of the computer science and communication majors that HBCUs have this seems almost like spiking a beach ball for a score. Put a camera in every corner of the stadium, arena, and field so that it can be remotely operated during a game to show every team’s games. Use drones, they are $99 or build your own, to highlight special views during the games or matches. Get a website and app built that allows people to view it anywhere at anytime. For sports like football, there is an additional charge for professional scouts, which can be a whole other package – a more expensive package.
  3. Conference Endowments. This could be done tomorrow and the fact that it has not been done is sad, really. HBCUs are stronger together than apart. A lesson that Florida A&M University learned the hard way when they tried to make the jump out of the MEAC to FBS. Wherever we go we must go together. With that said, it would make so much more sense if an athletic endowment was set up for each conference that could be equitably split among all the schools. Instead of each department trying to raise money independently, they share the common expense of doing so in hopes of reaching a larger audience. Conservatively, the MEAC and SWAC need an athletic endowment of $3 billion to produce the amount needed to ween themselves off of subsidies from their student population. All those golf tournaments by HBCU boosters that each school puts on could certainly assist in the greater good more so than the robbing Peter to pay Paul model our athletic departments currently exist on. It also provides a real vision – like the church building fund – that there is a goal and this is the result of that goal.
  4. HBCU football and basketball playoffs. This ties back into number one and ownership. HBCUs are forever trying to be the Cinderella story. Moments like North Carolina A&T beating Kent State, Grambling almost beating Arizona, or Norfolk State’s run in the NCAA tournament in 2012 where they reached the Sweet 16. You know what is better than being Cinderella though, getting paid and being profitable. An HBCU football playoff and basketball tournament is an opportunity to have a postseason, hold recruitment and marketing of high school students in cities, and again, own more if not all of the revenue. An eight team playoff from the four major HBCU conferences (SIAC, CIAA, SWAC, & MEAC) that starts the week after Thanksgiving and conclude on New Year’s Day at the HAA owned Morris Brown Stadium, hotel, and conference center. The playoff games themselves could be held in major cities that are geographically and expense friendly to the conferences, but also allow for exposure and recruitment. This is true for the basketball tournament as well. A 16 team (or 32 if you want to invite HBCUs not in HBCU conferences) basketball tournament held in cities like Chicago, New York, and other major basketball hotbeds that give exposure to our schools for future recruitment and a chance to create events we own around them that generate revenue only helps the bottom line. This is not limited to just football and basketball, but every sport. Events bring us money and using HBCU playoffs extends our seasons and extends the ability for them to generate revenue from the populations the events are held in.
  5. Black Owned Company Sponsors. When one hears how much HBCUs get paid by non-black owned corporate sponsors or in their money games it is utterly insulting. How someone treats you is a clear sign of how they feel about you and it is clear that the companies we receive sponsorship from currently think very little of our alumni as potential customers. Have you ever heard of Aliko Dangonte? He is the wealthiest man in Nigeria and owner of the Dangonte Group, which has interest in cement, sugar, and flour. Ventures Africa reports, “In Zimbabwe, Strive Masiyiwa, the founder of telecommunications giant, Econet Wireless, spent a reported $6.4 million setting up a trust for African students at Morehouse College, a historically black institution in the United States.” A sign that HBCUs are on these African entrepreneurs map. Why not approach them and their companies? The Dangonte Stadium, Arena, or Athletic Complex has a nice ring to it. It gives them an opportunity to expand their brand globally and to expand into the holy grail that is America.

Athletics is certainly an important part of the social experience of college and HBCUs, but it is not worth the burden to a people who are already trying to close a wealth gap that is sixteen times greater than their counterparts and are graduating with higher student debt loads despite HBCUs being cheaper on average. Instead of eliminating sports though or just subsidizing ourselves to death, there has to be the question of how do we make them an asset. Not just socially, but financially. There has been talk that the Power 5 conferences will eventually break away from the NCAA and super conferences come up every year in conversation. HBCUs have the opportunity to be ahead of the change curve, lead the change curve, and shift the paradigm instead of being reactive to it or simply mimicking our counterparts behavior after the fact. If we are going to be in a box, at least let it be a box we own and control.

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Prairie View A&M University Costing Students $90,000 With Athletic And Scholarship Fee


It is easy to be generous with other people’s money. — Latin proverb

By William A. Foster, IV

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The numbers do not lie. The African American median net worth is $2,170. European and Asian America’s median net worth is approximately $100,000 as reported by the Economic Policy Institute and Pew Research, respectively. The unemployment rate for African America is 14 percent while European and Asian America’s unemployment rates are 6.9 and 6.6 percent respectively.  At Prairie View A&M University 69 percent of their students are graduating with debt while Texas A&M University, its most prominent HWCU competitor, is graduating only 46 percent of its students with debt. Yet, the leadership at Prairie View seems to believe that it can operate largely and should chase the same objectives that its competitor has. In an article recently written by Nelson Bowman, Prairie View A&M University’s Executive Director of Development, admits that 95 percent of the student body is financial aid dependent. That most of financial aid for African Americans ends up as some form of student loan debt seems to be missed on the university’s leadership.

I grew up at Prairie View A&M University. My father’s family legacy runs deep with purple and gold. Many of the important first in my life even happen on that campus. I earned my master’s there in community development so there is a strong emotional investment to see this school improve in every way possible. That being said it can not do so on the back of its students because it can not find creative ways to raise funds for projects. Ultimately, if a college or university can not raise the money from alumni, outside sources, and endowment returns then it just simply does not need to engage the project. Asking students who are going to graduate playing catch up in terms of wealth and income or asking HBCU faculty and staff who are already underpaid and overworked in comparison to their peers is simply an apathetic way to show improvement without actually having to put much thought into actual achieving any.

It was during my time in graduate school that the current administration proposed building a $50 million athletic complex (it only has a $10.8 million research budget) as well as proposed to implement a $10 per credit hour fee onto student to help build the athletic department’s scholarships and improve their facilities. Some would argue a guise to help the university raise money for its proposed $50 million proposed athletic complex for which it could not use any state funds it had received to do so. Either way students were asked to bear the burden essentially by adding to the amount they already would need to borrow in student loans. Even more recent I had lunch with my cousin, an engineering major at Prairie View A&M University, who told me of a new $10 fee that was being added. He said it was being used to build the endowment as he understood it and provide a permanent endowed scholarship. Wait, what? You are asking students to borrow more money to fund a scholarship that they themselves actually need. A scholarships purpose is to decrease student debt but instead they are increasing their student debt. I guess standing outside in the rain when you have a house will keep you dry. There was something sad, unimaginative, comical, and paradoxical in all of it. Students of course approved the athletic and scholarship fee believing they were doing something to help their school. Somehow this is being sold to students as “giving” and not adding to their debt which will already have them at a wealth disadvantage upon graduation. A disadvantage they have to try and close with an income gap that currently has African Americans earning $0.65 for every $1.00 European Americans earn, wealth almost 50 times less than European and Asian Americans, and unemployment twice as high as their counterparts.

Just how much is this $150 athletic fee and $10 scholarship fee costing students? Federal statistics show that only approximately 40 percent of African Americans will graduate from undergraduate within six years. If one considers that a majority of Prairie View A&M University students will take six years to graduate it means they paid $960 over their six year academic career. What happens if they had been able to put that $960 into a Roth IRA or other investment account and just bought a standard S&P 500 Index? Over the next forty years at the historical average return of 12 percent that $960 would be worth $89 328.93 at retirement. What else is that $960 equal?

  • It would be equivalent to 5 months worth of savings at the current African American monthly savings rate. Something the majority of African American families did not have in the recent financial crisis.
  • As a percentage of the African American median net worth it is 44.2 percent.
  • Equal to 36 percent of the monthly median income for African Americans

The goal HBCUs should be working toward is decreasing their student debt burdens. By doing this it allows students to reach a point of wealth faster that they can be contributing alumni without sacrificing the financial health of their families. A complicated matter for African Americans who earn less and have higher student loan debt burdens while starting off with a wealth gap. Having less student loan debt also allows for the pursuit of home ownership faster and more importantly the ability to save money for the creation of businesses. Those businesses then can generate the kind of wealth that could provide seven and eight figure donations, employment faster for graduating students, and garner political influence for the HBCU. The logic that somehow burdening the students of today who will be the parents of tomorrow’s HBCU student makes little to no sense. It in fact endangers the possibility that the HBCU student of today and the parent of tomorrow will be forced to send their child elsewhere. Especially, if they are still paying off debt and must send their child to the school offering the most non-debt financial aid. Prairie View A&M University prides itself on saying it produces productive people. It must move beyond productive and do all it can so that it can produce powerful people. Ignoring the reality of its core demographic in its strategic planning to achieve that goal and mimicking HWCU behavior is something that far too many HBCUs are guilty of and it will be at the peril of our future if such behavior continues.

EDITOR’S CORRECTION: The fees are by semester. Therefore the $960 is actually $1,920 over six years. The cost to students is approximately $180,000.