Alaska Fiscal Policy| Follow the money …

Readers of these pages will be familiar with the recent controversy surrounding University of Alaska-Anchorage Athletic Director Dr. Steve Cobb.  If not, a quick grounding is available from the Anchorage Daily News (see “State hockey association approves vote of no confidence in UAA athletic director,” Apr. 20, 2013, and “Former players issue vote of no-confidence in UAA athletic director,” Apr. 23, 2013).

I have written during the week on this page (and my shorter takes blog)  about the significance of the controversy from the perspective of Alaska fiscal policy.  This issue has arisen at a time when the central question facing Alaska state government increasingly is “where can we cut the state budget.”  

The University system is a significant consumer of state spending and this situation raises the question of whether the University is doing all that it can to limit its call on state funds.  As I wrote in an earlier piece, athletics is often a front door through which potentially significant private donors enter a university.

By reversing this process — athletics causing donors who previously have given to use that door to leave — UAA is undermining its ability to reduce its dependence on state dollars. 

Since my last piece on the subject I also have come to realize another aspect of this issue.

On Thursday, UAA Chancellor Tom Case defended Dr. Cobb, based largely on the school’s performance in sports other than hockey.

“What doesn’t resonate as well with some hockey people is we’re a Division II school and our Division II sports are in the top four percent in the nation.

“That’s something I don’t take lightly. That says a lot. I was talking to (Great Northwest Athletic Conference commissioner) Dave Haglund recently, and he told me it was OK to share this: In his experience, Steve is probably the best athletic director in the conference.

“That’s not compelling to our hockey fans, maybe, but it is to me.”

See “UAA chancellor defends athletic director Cobb,” Anchorage Daily News, Apr. 25, 2013.

As I have dug deeper into that defense it appears that UAA’s success in DII sports, which Case attributes to Cobb, instead also appears to be grounded in state funding.

While the NCAA regulates the maximum number of scholarships that a school can provide, it does not require that a school actually provide them.  The level of funding is up to each individual school, and often, DII schools do not fund the full number of scholarships the NCAA permits.  (See “Myths and realities of college athletics and recruiting,” varsityedge.com).

The same is true of recruiting budgets.   “DII colleges are required to sponsor a minimum of 5 sports for men and women or 4 for men and 6 for women. … Since their athletics programs are financed by the institution budget like other academic departments they tend to have a smaller recruiting budget, which limits coaches to a recruiting area of 500-600 miles from campus.”  See “Realities of Recruiting,” recruitu2.com.

While scholarship and recruiting budgets at most DII institutions are not transparent, from conversations it has become increasingly clear that UAA has a significant financial advantage in these areas over others in the Great Northwest Athletic Conference (GNAC), and by extension, many of the other DII institutions.

Simply put, due to generous state funding UAA has been able to put more real scholarship money on the table, and recruit much more broadly, than its peers.  Or, as Dr. Cobb is reported to have put it at one point, “it doesn’t matter how much money this Athletic Department loses, the state is awash in money and we are just going to get a blank check.”  (See Casey Reynolds Show, Apr. 22, 2013, podcast at 7:50 mark).

Scholarships and recruiting money make a difference in sports.  The ability to travel to find, and then recruit the best players with scholarship money is a significant competitive advantage.   As a result, it appears the credit that Case wants to direct to Cobb instead should  be directed to the state budgeting process — the authors of the state “blank check” on which Cobb appears to rely.

As sometimes is the case, in attributing success for UAA’s programs we should follow the money, not the person.

The question, going forward, is how this plays out.  It is clear from the events of this week that Cobb has alienated a not insignificant portion of UAA’s potential donor base, and from Thursday’s statements, that, notwithstanding that the rationalization doesn’t hold up, Case is going to defend Cobb.

That may leave the next step up to the Governor and Legislature in the next budget cycle.  The question will be simple.

As UAA’s own Institute of Social and Economic Research (ISER) has made clear, the current state budget needs to be cut by an additional $1.3B (or, roughly, 2o% from this year’s $6.8B) in order to reach the long term sustainable level of $5.5B.   See “Maximum Sustainable Yield:  FY 2014 Update“ (Jan. 2013).  As the Governor and Legislature contemplate where those cuts need to be made, the question will be whether UAA athletics should continue to receive the “blank check” claimed by Cobb, or, instead, realize a reduction at least equal to the amount that peer institutions are raising from private donors.

When compared with other things like additional cuts to basic education the answer to that question likely will be clear.  Even Chancellor Case won’t be able to defend Cobb’s “blank check” in a showdown between “teachers v. athletics,” especially when athletics isn’t carrying its own weight.

At that point, if it hasn’t before, perhaps UAA will begin to realize the value of maintaining good relationships with its alumni and support base.  If not — or as is more likely, it takes awhile to rebuild them given the recent events with Dr. Cobb — the financial advantage on which UAA has built its DII results will begin to unwind and the foolishness of Case’s interim defense of Cobb will become clear.

At the end of the day, it was the money that made the difference, not the man, and by retaining the man, the University lost the money.