From the Bench - Is the UA Athletic Department a Good Model for Business Practices?

[Robert Shields]

Is the UA Athletic Department a Good Model for Business Practices?

Robert Shields

A recent item on the Innovate Arkansas blog from Arkansas Business came with the title, "Three Lessons Arkansas Businesses Can Learn From the Razorbacks," and suggested that the University of Arkansas athletic department "may be able to teach state businesses a few helpful lessons on how to correctly run a multi-million dollar operation."

This idea for UA athletics to be a shining example for businesses is extremely interesting considering that the UA athletic department is highly dependent on donations and couldn't stand on its own without the taxpayer-supported public university it is attached to.

It has also figured out a way to charge more even at times when the product falls to substandard levels. Maybe how they pull this off does indeed deserve further study that businesses can learn from.

Being the one-time "Outstanding Student in Economics" from the UofA, and I do have a the certificate in my garage in a box next to my lawn mower as proof, I loved this thought-provoking piece as it makes readers consider how things are managed at the UofA.

While it is possible that the state's flagship university is the organization with all the answers, this story seems to be written in the absence of the fact the football program just went through a 17-game SEC losing streak – not exactly an ideal business model.

Most business can't afford to weather that long of a storm. How the University weathered the storm is significant, but as a state institution that cannot fail makes it somewhat easier. That aside, Innovate Arkansas' piece made some valid points.

The article, written by business consultant Larry Alton out of Iowa, cites three lessons. The first revolves around the firing of Bobby Petrino and how the UofA handled it properly. The lesson is that it's important for any organization to put the good of the business before any individual. So, by putting Bobby Petrino in his place, the UofA football program ended up in a better place.

I think it's important to look back even further because the more important point is that who you hire is very important for any organization.

The problem with Petrino did not start with the motorcycle accident. It started with his hiring. He came with a lot of known baggage, and I don't think many mistook him as a pillar of righteousness. Some insiders probably even considered him a scoundrel.

I quickly remember the column that I wrote in 2011 following the loss to LSU. In that LSU game, Petrino was dropping the F-bomb on national television screaming across the field at the LSU coach, Les Miles. I chastised Petrino for the behavior saying it was unprofessional. As a result, I was taken to the woodshed by fans explaining his behavior and defending him.

Petrino's behavior was symptomatic of a much larger problem of a person who was becoming larger than even his ego. He believed he was untouchable, and the state and university treated him that way.

The lesson learned is hire good people. Integrity matters. Spoiler alert as that is lesson three of the Arkansas Business story. On the second try for Jeff Long, the hiring of Bret Bielema seems to be a good hire of a good person. He seems to be ethical and wants to recruit kids with the same mentality.

The second lesson of the Innovate Arkansas story is that facilities matter and that the building of the Football Operations Center has paid off. I don't disagree with that sentiment, but it's not an absolute. I totally agree having the right tool is imperative to doing a job right.

But, the right tool is not necessarily the newest, greatest, and shiniest thing available. When you need a pencil, it's spot on and the technology has not changed in a very long time. Sure, in the interim since the development of the Ticonderoga No.2, other writing instruments have surfaced, but when you need a pencil, a Montblanc pen is probably too much and can leave a permanent mark.

Bud Walton Arena comes to mind for me as the UA's Montblanc. Modeled distinctly after North Carolina's arena, it was the Cadillac of its time and can still hold its own against many of the great arenas when it comes to style points. It is a palace.

But much like a premier school like Duke staying at its 9,000-seat cracker box of Cameron Indoor Arena, I often wonder what would have happened if the team just would have stayed at the inferno of Barnhill Arena. Sometimes improvements are mandatory, but sometimes change for the sake of change is not advisable, and the lesson to be learned in business is trying to be smart enough to know the difference.

As previously mentioned, the third point is that integrity is critical. I could not agree more, but it's not what makes business successful.

Most economists will tell you everyone has a price. Time and money supplants integrity. When in business what you are actually talking about is not integrity but ethics.  Everyone must follow the law or at least you are supposed to. Ethics revolves more around Lou Holtz's do right rule.

For example, you don't have to spell out every team rule because some are empirical such as you can't bring a gun to practice. Ethics is about doing the right thing when there is no rule to stop you. The world is full of companies that are very successful yet are very unethical.

So we come back to the UofA, which is where I leave you. Do you want an athletic department that acts ethically or one that is driven toward money and wins?

I know someone will quickly ask me why can't you do both. My response would be under the current state of the NCAA, I don't think that is possible. But if the UofA does, it will be the exception in the marketplace and there is nothing wrong with that.




Send your debate on business ethics to fromthebench@yahoo.com.

[Grag T]

I didn't read any of that but I did see a coyote walking around downtown today, that was kinda cool.  He looked like he didn't wanna take any gruff from anyone.

[ricepig]

Well, we've had the retread horse racing b.s., we now get the obligatory "sucked up to the teacher to get some award" article, I guess we'll get some retread on March Madness next week. Wally, is this you?

[thirrdegreetusker]

Sure, in the interim since the development of the Ticonderoga No.2, other writing instruments have surfaced, but when you need a pencil, a Montblanc pen is probably too much and can leave a permanent mark.

Bud Walton Arena comes to mind for me as the UA's Montblanc. Modeled distinctly after North Carolina's arena, it was the Cadillac of its time and can still hold its own against many of the great arenas when it comes to style points. It is a palace.

But much like a premier school like Duke staying at its 9,000-seat cracker box of Cameron Indoor Arena, I often wonder what would have happened if the team just would have stayed at the inferno of Barnhill Arena. Sometimes improvements are mandatory, but sometimes change for the sake of change is not advisable, and the lesson to be learned in business is trying to be smart enough to know the difference.

I agree that BWA is too big. Even in the NC season of 93-94, "extra" tickets were on sale outside in abundance, for all but a couple of games. Thereafter, it got harder and harder to unload "extra" tickets, to the point that folks simply laid them on the top of those carboard trash boxes, hoping SOMEONE might want them.

If Bud Walton and/or UA was determined to build a "new" arena, should have been built to hold about 11.5k. Thus, tickets would always be in demand, except for the very worst seasons.

[Vantage 8 dude]

Is the UA Athletic Department a Good Model for Business Practices?

Robert Shields

A recent item on the Innovate Arkansas blog from Arkansas Business came with the title, "Three Lessons Arkansas Businesses Can Learn From the Razorbacks," and suggested that the University of Arkansas athletic department "may be able to teach state businesses a few helpful lessons on how to correctly run a multi-million dollar operation."

This idea for UA athletics to be a shining example for businesses is extremely interesting considering that the UA athletic department is highly dependent on donations and couldn't stand on its own without the taxpayer-supported public university it is attached to.

It has also figured out a way to charge more even at times when the product falls to substandard levels. Maybe how they pull this off does indeed deserve further study that businesses can learn from.

Being the one-time "Outstanding Student in Economics" from the UofA, and I do have a the certificate in my garage in a box next to my lawn mower as proof, I loved this thought-provoking piece as it makes readers consider how things are managed at the UofA.

While it is possible that the state's flagship university is the organization with all the answers, this story seems to be written in the absence of the fact the football program just went through a 17-game SEC losing streak – not exactly an ideal business model.

Most business can't afford to weather that long of a storm. How the University weathered the storm is significant, but as a state institution that cannot fail makes it somewhat easier. That aside, Innovate Arkansas' piece made some valid points.

The article, written by business consultant Larry Alton out of Iowa, sites three lessons. The first revolves around the firing of Bobby Petrino and how the UofA handled it properly. The lesson is that it's important for any organization to put the good of the business before any individual. So, by putting Bobby Petrino in his place, the UofA football program ended up in a better place.

I think it's important to look back even further because the more important point is that who you hire is very important for any organization.

The problem with Petrino did not start with the motorcycle accident. It started with his hiring. He came with a lot of known baggage, and I don't think many mistook him as a pillar of righteousness. Some insiders probably even considered him a scoundrel.

I quickly remember the column that I wrote in 2011 following the loss to LSU. In that LSU game, Petrino was dropping the F-bomb on national television screaming across the field at the LSU coach, Les Miles. I chastised Petrino for the behavior saying it was unprofessional. As a result, I was taken to the woodshed by fans explaining his behavior and defending him.

Petrino's behavior was symptomatic of a much larger problem of a person who was becoming larger than even his ego. He believed he was untouchable, and the state and university treated him that way.

The lesson learned is hire good people. Integrity matters. Spoiler alert as that is lesson three of the Arkansas Business story. On the second try for Jeff Long, the hiring of Bret Bielema seems to be a good hire of a good person. He seems to be ethical and wants to recruit kids with the same mentality.

The second lesson of the Innovate Arkansas story is that facilities matter and that the building of the Football Operations Center has paid off. I don't disagree with that sentiment, but it's not an absolute. I totally agree having the right tool is imperative to doing a job right.

But, the right tool is not necessarily the newest, greatest, and shiniest thing available. When you need a pencil, it's spot on and the technology has not changed in a very long time. Sure, in the interim since the development of the Ticonderoga No.2, other writing instruments have surfaced, but when you need a pencil, a Montblanc pen is probably too much and can leave a permanent mark.

Bud Walton Arena comes to mind for me as the UA's Montblanc. Modeled distinctly after North Carolina's arena, it was the Cadillac of its time and can still hold its own against many of the great arenas when it comes to style points. It is a palace.

But much like a premier school like Duke staying at its 9,000-seat cracker box of Cameron Indoor Arena, I often wonder what would have happened if the team just would have stayed at the inferno of Barnhill Arena. Sometimes improvements are mandatory, but sometimes change for the sake of change is not advisable, and the lesson to be learned in business is trying to be smart enough to know the difference.

As previously mentioned, the third point is that integrity is critical. I could not agree more, but it's not what makes business successful.

Most economists will tell you everyone has a price. Time and money supplants integrity. When in business what you are actually talking about is not integrity but ethics.  Everyone must follow the law or at least you are supposed to. Ethics revolves more around Lou Holtz's do right rule.

For example, you don't have to spell out every team rule because some are empirical such as you can't bring a gun to practice. Ethics is about doing the right thing when there is no rule to stop you. The world is full of companies that are very successful yet are very unethical.

So we come back to the UofA, which is where I leave you. Do you want an athletic department that acts ethically or one that is driven toward money and wins?

I know someone will quickly ask me why can't you do both. My response would be under the current state of the NCAA, I don't think that is possible. But if the UofA does, it will be the exception in the marketplace and there is nothing wrong with that.




Send your debate on business ethics to fromthebench@yahoo.com.

Why should I not be surprised in the least with these "observations"? I mean we have a hack for a columnist, and "hack" is IMO being extremely generous and polite, who now dares to make an economic assessment of the Athletic Department. Way to keep up the great work RS.   

[GuvHog]

Why should I not be surprised in the least with these "observations"? I mean we have a hack for a columnist, and "hack" is IMO being extremely generous and polite, who now dares to make an economic assessment of the Athletic Department. Way to keep up the great work RS.   

So what is he wrong about???

[Barman91]

So what is he wrong about???

ditto

[GolfnHog]

Have you given thought to moving to another state? I'm sure a GoFund could be established to help.

[Großer Kriegschwein]

nm

[HouSwine]

Sorry but it's not so 'either-or' even with the NCAA, not to mention SEC.

[GuvHog]

ditto

You'll notice he hasn't replied.

[gchamblee]

The collective intelligence of individual idiots is always amusing in these RS threads.

[OldCoot]

So what is he wrong about???

I could write a great op ed about the assassination of JFK.  It would be complete and factual, and I am sure someone would argue my points.  It would also be about 50 years too late.

[jesterzzn]

Children's Hospital in Little Rock relies on donations and stands as an example of another multi-million dollar business many other state businesses could take lessons from.

Revenue sources are not the same thing as operations.

Let me put this at an 8th grade girls bathroom reading level.   Where a business gets its money is not the same thing as how well they use their money.

[LSUFan]

DOES ANYBODY HAVE A ROCK??

[jkstock04]

Children's Hospital in Little Rock relies on donations and stands as an example of another multi-million dollar business many other state businesses could take lessons from.

Revenue sources are not the same thing as operations.

Let me put this at an 8th grade girls bathroom reading level.   Where a business gets its money is not the same thing as how well they use their money.

I agree. Also, take an outside look at the universities customer base. If you do it's almost laughable. Razorback fans are extremely loyal with low expectations (when considering the other schools customer base). We are the only show in town, so to speak. It's not that tough of a fan base to sell.

The universities business model is a walk in the park...it's not like the real business world, because in the real business world , emotions do not override numbers...must be nice.

[The_Iceman]

[DeltaBoy]

Good read and the UA is not a good model cause with the product is subpar you cut the price not raise it. Ie ticket prices.

[umpqua]

Personally, I like the idea of having a deck in the endzone.

[Pancetta]

As far as grading performance, even when people were leaving tickets outside BWA they still paid for them first. Seems the Athletic Dept leveraged their position as a state sponsored monopoly pretty well. A 70% sold BWA is making more money than sold out Barnhill with waiting list.
Not sure what other state businesses could learn from the AD since they don't have those advantages.
Jeff Long did a great job of avoiding fallout from hiring a mercenary and then not only side stepping blame but actually garnering accolades ( and a pay raise) for firing said mercenary. Doubt a business leader could slide that by stockholders.

[RazorbackToTheFuture]

Who the hell is Robert Shields?

[NaturalStateReb]

I agree that there's really no such thing as a profitable college athletics program.  It's primary purpose is not a profit motive, so that's not necessarily a bad thing.

[sowmonella]

I agree that BWA is too big. Even in the NC season of 93-94, "extra" tickets were on sale outside in abundance, for all but a couple of games. Thereafter, it got harder and harder to unload "extra" tickets, to the point that folks simply laid them on the top of those carboard trash boxes, hoping SOMEONE might want them.

If Bud Walton and/or UA was determined to build a "new" arena, should have been built to hold about 11.5k. Thus, tickets would always be in demand, except for the very worst seasons.

Since Bud Walton was built it has never averaged under 12K per game. Only 2 other years was the average under 14K. In the 94 season the average was over 20K per game. It wasn't easy to get tickets. In 21 years attendance was in the Top 10 in college BB for 12 of those years and out of the top 20 only twice.

[Dr. Starcs]

Is the Robert Shields a Good Model for Writing Practices?

NO

[ghostzapper]

What wannabe writer can be taken seriously when he doesn't know the difference between site and cite?

[Theolesnort]

Who the hell is Robert Shields?

Probably just another one of those pseudo intellectual economist that has this country headed to hell in a hand basket.

[Oklahawg]

I agree that there's really no such thing as a profitable college athletics program.  It's primary purpose is not a profit motive, so that's not necessarily a bad thing.

Thank you! Education should not be a for-profit enterprise. College athletics, too, should have at least enough peripheral interest in the educational process to not worry about +/- bottom line.

I am very pleased that UA athletics has donated to the general fund for UA. Nice, too, that they continue to be "self-sufficient".

[Oklahawg]

I didn't read any of that but I did see a coyote walking around downtown today, that was kinda cool.  He looked like he didn't wanna take any gruff from anyone.

Broke wind twice and added three minutes to his life expectancy.

[thirrdegreetusker]

As far as grading performance, even when people were leaving tickets outside BWA they still paid for them first. Seems the Athletic Dept leveraged their position as a state sponsored monopoly pretty well. A 70% sold BWA is making more money than sold out Barnhill with waiting list.

Problem is, the sellouts ended around 2010. In order to maximize revenue, supply-demand must figure into the capacity decision.

From 1960 to 1980, every single in-state UA football game was sold out months BEFORE the first game. RRS capacity was 46k(?), WMS was 54k (?). In that case, W-L did not matter, because all games were sold out in pre-season.

SMU had zero sellouts from 1960 to 1980. Cotton capacity was about 70k, Texas Stadium capacity was  65k. No matter who SMU was playing, you could walk up the day of the game and get tickets.

However counter-intuitive it might be, it is unwise to build as sports facility with the notion "If we win, we will fill it." If that were the case, every venue could be justified to be built with a capacity of 200,000.

[Grizzlyfan]

People buy tickets and donate money to college athletic programs on an emotional basis to a large degree.  People make business decisions on a rational basis, for the most part.

I really don't see how you can compare the two in terms of business practices.

[OTTER]

Man, all those wasted words used by Robert, none of which lend creadance to the fact he is a writer.  Mostly because he is not a writer, and never will be. 

[TuskDr]

I didn't read any of that but I did see a coyote walking around downtown today, that was kinda cool.  He looked like he didn't wanna take any gruff from anyone.
[/quote

Please post a picture of the coyote. This is much more interesting to me than RS and his BS.

[Biggus Piggus]

Robert, that really wasn't bad at all. Feels like coughing up a pound of phlegm to say that, but there it is.

[RazorbackToTheFuture]

Probably just another one of those pseudo intellectual economist that has this country headed to hell in a hand basket.

You're a mod and you actually tried to answer the question???  Lol

[zane]

[thefisher]

Broke wind twice and added three minutes to his life expectancy.

Are you referring to the coyote of R. Shields?

[The_Iceman]

Glad to hear it. Seeing too many responses from enablers.

[Ragnar Hogbrok]

[HotlantaHog]

What wannabe writer can be taken seriously when he doesn't know the difference between site and cite?

Blame the editors! Every writer makes grammatical or spelling errors now and then.

[HotlantaHog]

I haven't read the business article that Shields refers to but ... I would hazard to guess Arkansas's relative success in its athletic program financially is due to:

1. Brand building and relative lack of competition. The Razorbacks own the Arkansas brand and the absence of pro teams and growth in interest in college sports has benefited the program. The Hogs' brand has had a warm glow even when the teams have sucked.

2. Demographics in NW Arkansas and success of the corporate sector in the state. NW Arkansas is one of the fastest growing regions in the U.S. That has got to have helped some.

3. Relative inelasticity of demand over the medium term. Big price changes (as there were in basketball) or declines in quality (as in football for a few years) do not result in commensurate declines in attendance, revenue or donations. Yes, they matter on the margin. But even in the worst years and with higher prices, both basketball and football revenues have held up pretty well.

It is an interesting question of whether somebody else could have done better over the last 5, 10, 15, 25 or 50 years in managing the brand. The answer is also unknowable.

What is missing here is any data -- that is, has growth in Arkansas's attendance and revenue (if you want to ignore success on the field) done better or worse that schools that are similarly situated? I understand Arkansas is doing just fine -- but where is the data that suggests that the program is doing better than other similar programs or better than what you would expect?

[Inhogswetrust]

He needs to take that lawnmower in the garage and crank it up and run over that box next to it with that damn certificate he bragged about.................................

[Biggus Piggus]

Blame the editors! Every writer makes grammatical or spelling errors now and then.

No I dont.

[LSUFan]

No I dont.

I beg to differ with ewe.

[Theolesnort]

You're a mod and you actually tried to answer the question???  Lol

To be honest with you, I had a smile on my face when I answered. So then there is that.

[Doug]

Nothing more needs to be said (Attached pic)

[MJ2]

The key is to take control of something that is state owned (stadiums and facilities) and charge excessive fees for the priviledge to come into those venues to see something that is hyped up and guarded by state law.   Oh, and all the while telling everyone you are educating these students but actually just selling their services and paying them minimum wage or less.

[dcrback]

I believe that is the longest Robert Shields article that I didn't read!

[Peter Porker]

nm