Sanctions won’t kill Trojans financially

Follow the money.

That was the directive given by the mysterious Deep Throat to Washington Post reporter Bob Woodward in the film version of All the President’s Men, the account of how two journalists uncovered one of our nation’s most infamous political scandals.

Although the recent NCAA sanctions on USC athletics pale in comparison to Richard Nixon’s Watergate in scope and impact, I decided to take Deep Throat’s advice.

The bowl ban, loss of scholarships, forfeiture of wins — we’ve all heard the penalties. But what will be the impact on the bottom line?

While combing through the financial report filed by the USC athletic department in compliance with the Equity in Athletics Disclosure Act, several figures jumped out to me.

First thing’s first, USC athletics is a big business. For the 2008-2009 fiscal year, the last report made available to the public, USC reported a balanced budget of just more than $80 million.

USC pays more than $13 million in salaries alone to head and assistant coaches for the school’s 19 varsity teams.

Add to that more than 150 support staff employees in charge of marketing, equipment, fundraising, sports information and athletic training that need salaries and benefits, and you begin to realize that a major drop in revenue would affect a lot of people.

Second, the Trojan Family isn’t just a clever way to sell the school to prospective students. USC reported nearly $39 million in unallocated revenues, which are made up primarily of gifts from alumni and athletic support groups.

Some media members have suggested over the last few months that if the NCAA really wanted to punish USC, it would recoup all the revenue made by the school while Reggie Bush was deemed ineligible.

I’d wager, however, that even if the NCAA had the power and desire to assess hefty fines to USC, Trojan boosters would reach deeper into their pockets to support the school’s sports teams during the difficult time.

The other big-time moneymaker for USC — football — raked more than $35 million into Heritage Hall coffers in 2008-2009. After expenses, Trojan football earned profits of $14 million, the only team on campus to finish the year in the black.

With virtually every other USC team banking on the financial well-being of football, the question remains: How much will that football-related revenue drop because of the NCAA sanctions?

In short, not much.

The current two-year bowl ban, while not enjoyable for Trojan coaches, players and fans, won’t break the bank for the athletic department.

USC will miss out on profits from selling official Trojan bowl game merchandise at the campus bookstore and other various retail outlets, as well as revenue generated if the Trojans made a national championship appearance.

A potential national championship, something made impossible this season, wouldn’t hurt donations either.

The much-publicized bowl game payouts, however, won’t be missed.

Every winter, the bowl committees and their sponsors promote how much prize money comes along with playing in their games.

The Bowl Championship Series members highlight their $17-million payouts for participating in one of their five games.

Schools in the Pac-10 conference, however, split the money evenly among all 10 members after the participating school covers its bowl-game related expenses.

In 2008-2009, the 10 schools split slightly more than $25 million in bowl game revenue. The NCAA penalties do not prohibit USC from continuing to collect their share of the spoils, bowl game or not.

Also, the Trojans escaped what would have been a pain-in-the-pocketbook television ban, a penalty the school received for athletic department infractions in 1957, 1959 and 1982.

While 45 percent of the Pac-10 conference’s television revenue is split up evenly among the 10 schools, the other 55 percent is based on actual TV appearances during the season.

With a successful team in the nation’s second-largest media market, it’s no surprise that USC pulls in the biggest share of the revenue in the conference — about $4.5 million more over the last two years than the second biggest earner, Oregon.

With eight Trojan football games scheduled to air on ESPN or ABC and four more to be televised by Fox Sports this season (the UCLA game broadcast information has yet to be announced), USC will continue to bring in big-time TV money.

The athletic department’s actions over the summer don’t seem to indicate a financial panic either. The school said goodbye to former Athletic Director Mike Garrett (who in all probability received a nice chunk of change on his way out) and hired Pat Haden to take over (who surely isn’t being paid in pennies).

The school also beefed up its compliance department and hired former FBI director Louis J. Freeh to assess the athletic department’s culture and procedures to try to prevent NCAA sanctions in the future.

So where did the money lead us?

For a football program surrounded by question marks heading into the new season, one thing is certain: Money won’t be the problem.

“Sellin’ the Sizzle” runs every other Friday. To comment on this article, visit dailytrojan.com or e-mail Jonathan at [email protected].