Closing Words on College Cash-ketball 2010

There was pleny of excitement as college basketball pools around the country went bad this spring. There was also talk of all the deserving teams that did not make the field of 64+1. Now there is considerable chatter about expanding the field to 96 teams. With the emergence of the Butler University there were comparisons to the movie Hoosiers and the role of the small school in the big tournament.

This is where I would like to say two things.


1. Good for Butler


and to the schools that didn't make the field of 64+1...


2. You reap what you sow. Deal with it!


Here's why. Butler is a school of less than 5000 students. Their licensing revenue more than doubled to $85k last year. Due to this year's performance that number will grow significantly. Duke spends more on one player's expenses than Butler does on all of theirs. I am not bashing the big guys, but I am giving credit to a small school that seems to have gotten the most bang for their basketball bucks. The catch is that the big schools are less ikely to play small schools that are on the rise. Too much to lose if they don't win and not enough to gain if they do win. The best recent example is Gonzaga University. They have improved their program to a level that recognizes them as a big time small basketball school. The catch is that good teams will meet them in tournaments or possbily at neutral sites, but rarely do they go to Gonzaga (where the 'Zags would potentially make more profit.)


On the 2nd point, teams from big conferences get more TV money, more exposure, and greater NCAA money even when they don't make the tournament. For example, St. John's finishes last in the Big East. Because 8 teams from the Big East made the NCAA tournament, every team in that league gets a cut of that money. This doesn't even count that all 5 teams that didn't make the NCAA tourney, played in the NIT. More moeny to share. When you have the conference advantage to get exposure and money, it helps with recruiting. If you cannot win after taking those advantages along with the visibility that allows you to cut favorable deals when you do play smaller schools, YOU DON'T DESERVE TO GO TO THE NCAAs!


The Most Profitable NCAA Tournament Teams - CNBC


...and if all that didn't convince you that this is really about money, this link is my last try to quantify how much it IS about the $$$. Thanks to Darren Rovell for much of the linkage that puts the money behind the sport into perspective.

Bare Naked Bucks--Prepared for Sudden Wealth?

Last week a number of young men have moved into an expected sudden wealth financial category based on their draft status with the NBA and NHL. While this is good news for them, it also comes with a number of strings attached.

Because these guys were expected to make big money, I am sure that tons of "lost" relatives have come calling. In addition, some of them will have collected best buds faster than Facebook friends.

What some of these people will not do is protect the long term investment. The average NBA career was just under 5 years. If we apply the average (mid level) exception salary for the past 5 years (2004-2008), we get about $26 million. HOWEVER, the NBA pays its stars very well and most players on a roster make LESS than the average salary. The more acccurate number to use is the MEDIAN salary. (You get this number by ranking the salaries from smallest to largest and stopping in the middle.) For this past season it was just above $3 million. If we assume that the median salary and the mean salary have grown in similar percentages over the past 5 years, then the median salary over an average 5 year career is actually $14,213,779.

Take the rookie scale for draft picks. In 2005, out of 30 first round draft picks that are given automatic raises annually, their first option year is the 3rd year of the contract. At that point, only the top 4 picks exceed the median. So 26 rookies are actually trying to get above the median on their 2nd contract, which many may never see as it comes after their 4th year in the league.

Anyhow, take that almost 3 mil/yr and subtract federal taxes (34%) and a standard agent commission (4%). We will skip over the variety of state and local tax possibilities and look at the average player as a person with $1,762,509 annually for 5 years. After that time it is likely that the salary will drop significantly for the remaining work years.

By the time the player gets a place to live and spreads some of that money around to the "friends & family" just how much will really be left to live on when you retire in your mid 20s?

To all my newly rich "friends" that were drafted, be careful with your money and don't collect an entourage...unless it is the DVD box set!

March Madness - The Most Wonderful Time of the Year

I am a basketball fan.

This is the best sports time of the year for me.

Call in a favor, use personal time, but free yourself to catch a few college basketball games. Those office pools bring out folks from all corners to put their 2 cents in to win bragging rights (or maybe a prize).

While I enjoy both college and pro basketball, the energy and excitement that goes with March Madness is unmatched--particularly in the first weekend. I am generally neutral in games like Stanford vs Marquette. HOWEVER, it was a great game to see. The Stanford coach gets thrown out in the first half. The game goes to OT. A 7 footer wins the game on an incredible, off balance, twisting shot.

While there are not as many games this Thursday-Sunday, I am sure that some of them will be very close and the crowds will be into them far more than any other event that starts and stops during three weeks.

While I enjoy watching, Cheech and Chong recognized the excitement that players have for the game in the early 70s. Love the song, but the video can rub some the wrong way. The Basketball Jones