Tuesday, November 20, 2012

Maryland, Under Armour, and the Big 10

This is turning into a sports-heavy week, which is ironic given that in my first post yesterday I said that we probably ascribe way too much importance to sports, since they're just a form of entertainment. But given some of the things I've written about in the past, I felt that it was necessary to chime in on yesterday's decision by Maryland to leave the ACC for the Big Ten Conference (which will soon have 14 teams, because of course it will—the Big 12 has 10 teams... awesome).
The University of Maryland's Board of Regents voted Monday to accept an invitation to join the Big Ten and begin competition in the conference in the 2014-15 academic year. 
"Today is a watershed moment for the University of Maryland," said university president Wallace D. Loh in a release. "Membership in the Big Ten Conference is in the strategic interest of the University of Maryland." 
Loh added it would "ensure the financial vitality of Maryland Athletics for decades to come," and offer opportunities to boost the "education, research, and innovation" of the university... 
Sources at Maryland believe the Terps will be able to negotiate the current $50 million exit fee from the ACC to a lower amount. The additions of Maryland and Rutgers would spur the Big Ten, then, toward negotiations on a new media-rights deal when its first-tier rights expire in 2017.
There are any number of angles I could attack on this topic, and most of those angles have already been explored in my previous missives about collegiate athletics. But what I find most troubling (and unique) about this particular move is the rumored role that Under Armour CEO Kevin Plank has had in these negotiations.
Welcome to the new landscape of college sports, where billionaire boosters and eight-figure payouts cause universities to abandon rivalries decades in the making. 
On Monday, the University of Maryland Board of Regents unanimously approved leaving the ACC and joining the Big Ten conference, a decision that may trigger the next wave of college sports realignment. The move is potentially quite profitable for Maryland, which could double the TV revenue it gets by hitching its wagon to the Big Ten Network. 
However, despite the foreseeable long-term gains, breaking with the ACC comes with a high upfront cost: $50 million, an exit fee that was recently raised from only $10 million. That kind of fine could cripple the University, especially at a time of cutbacks and budget shortfalls. 
Luckily for Maryland, it has a billionaire backer who may be willing to foot the bill: Under Armour founder and Maryland alumnus Kevin Plank. At the release of the Forbes 400 in September, Plank was the 345th richest person in America, with an estimated $1.35 billion net worth. A $50 million donation would barely dent his bank account... 
According to an ESPN report, an anonymous university regent said Plank is “100 percent” behind the move to the Big Ten and added that the billionaire is “heavily involved behind the scenes with board members.” 
The final piece of the puzzle may have fallen into place last week, when Under Armour announced in a SEC filing that Plank would be selling 1.3 million shares of the company “for asset diversification, tax and estate planning and charitable giving purposes.” What would 1.3 million shares of Under Armour net Plank on the open market? Try a cool $56 million after taxes—just the amount Maryland needs to pay if it leaves the ACC for greener pastures. 
Is it a smoking gun? No. And Plank did not immediately return requests for comment. But such generosity wouldn’t be unique.
Right. "Generosity". That's what we're calling it now. The simple fact is, if Plank does indeed foot the bill for Maryland's move to the Big Ten, then the expenditure amounts to little more than a marketing expense on the part of Under Armour. The company spends a few million bucks, they put their ugly-ass Maryland uniforms on a few more cable TV screens, and they immediately get increased exposure to a whole new midwest market.

We may think we're watching student-athletes play ball out there, but what we're really watching is cleverly designed product placement, brought to you in (large) part by unpaid student labor. The setup is eerily familiar to those of us who have studied 19th century plantation economics, especially when you consider that a not-insignificant portion of the players on these teams are blacks from low-income backgrounds. I'm not sayin', I'm just sayin'...

Increasingly these days, when we talk about collegiate athletics, what we're really talking about are Nike, Under Armour, and ESPN, because those are the companies that really call the shots around here. The conferences and the schools have become little more than pawns, transformed into the marketing departments for these huge multinational corporations. Maybe that's a cynical way of looking at things, but I'm finding it increasingly difficult to view NCAA sports through anything but a cynical light, especially given how cynical the decision-makers at these schools have seemingly become.

The NCAA needs to step in immediately and put a stop to this ridiculous conference-raiding free-for-all, before the whole thing loses all credibility. If we want to master plan this thing and create four or five huge jumbo-conferences, then fine. Let's get everyone together under one big NCAA umbrella and do this thing. But doing it piecemeal, with every conference raiding every other and then forcing the schools to pay exorbitant exit fees on the way out of town is just insanity, and worse yet, it's monstrously inefficient.

The conferences (and the apparel and TV companies) have become significantly more powerful and profitable than the NCAA itself, and that's clearly becoming a problem. As for me, the more days that go by, the more I think I should just quit on football altogether and start watching the sports that don't make any money, because at least there's something real left there.

As a remaining fan of the ACC (until further notice), all I can say to Maryland is "good riddance". A school that would sell out so brutally to one corporation and its CEO is not a school that I want anything to do with. God speed, Terps. Enjoy being the new Indiana.


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