Study says canceled UAB football program actually made money
UAB said it made the decision to end its football program (along with rifle and bowling) in November because it could not afford to continue supporting the program. However, an independent economic analysis firm released a study Thursday that claims football actually made money for the university and the decision to terminate the three sports was "ill-advised from a net cash-flow perspective."
"We find that the three sports in question did not cost the university anywhere near the $3.75 million indicated on UAB's accounting statements," Dan Rascher and Andy Schwarz, partners of Bay Area firm OSKR, wrote. "Instead, after making the sort of adjustments suggested by the economics literature, we conclude that the three sports were effectively break-even to slightly positive. Football and bowling showed a modest positive return for 2013-14, the last year for which complete data was available. Rifle showed a deficit, but the three-sport balance was positive to the tune of $75,000."
According to ESPN, Rascher and Schwarz wrote in their study that athletic scholarships “cost UAB 65 percent less than their listed prices” because “any tuition number assigned to that scholarship is not a hard cost to the university.”
They also wrote that there would even be enough money to cover cost-of-attendance scholarships for UAB athletes, especially with the College Football Playoff bringing in more money to the sport.
"We conclude that going forward, anticipated improvement in ticket sales from 2013-14 levels and new College Football Playoff revenues will outpace new expenses from Cost of Attendance stipends and unlimited food allowances," they wrote. "Once these new revenues and expenses kick in, we anticipate the aggregate annual surplus from football, bowling, and rifle would exceed $500,000, even without including the anticipated but hard-to-quantify benefits to admissions and enrollment, donations, and media exposure."
UAB’s athletics task force originally hired OSKR on March 7 to complete a report about the school’s finances. However, the contract between the university and OSKR was canceled a week later because UAB was worried that OSKR’s report could be biased after reading articles written by Schwarz that were “critical of UAB’s decision to end football,” according to CBS Sports.
OSKR responded to the allegations of bias in its report.
"We stand behind our numerical work as honest, sincere, conservative, and certainly not biased in favor of maintaining the football, bowling, and/or rifle programs. It's just that the unbiased numbers happen to support that outcome."
Rascher and Schwarz were also involved in the Ed O’Bannon v. NCAA trial as consultants for the plaintiffs. According to ESPN, Rascher “challenged the accounting methods used by the NCAA to assert that most athletic departments in major conferences lose money.”
Even after the contract broke off, OSKR continued and its own accounting methods to complete its 156-page UAB report, which was “calculated to produce conservative estimates.”
Since breaking off its contract with OSKR, UAB’s athletics task force enlisted College Sports Solutions (CSS) to complete a report by May 15.
UAB spokesman Jim Bakken said in a statement to CBS Sports Thursday that the decision to terminate the three sports was “based on the best information available at the time, but a thorough review of the data used to make that decision is important to the UAB community. UAB leadership looks forward to revisiting the decision with community input after the completion of the College Sports Solutions review, due May 15. It is the intention of UAB leadership to make the most informed decision possible based on an objective review of actual numbers."
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Sam Cooper is a contributor for the Yahoo Sports blogs. Have a tip? Email him or follow him on Twitter!
