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IronChef

If (when) Power 5 cancels sports this week, are any wrestling teams in trouble?

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1 hour ago, jdalu75 said:

The amount of cash that can be drawn from perpetual endowments is tiny.  The dividends on the investment are largely reinvested to guard against inflation.  If I'm remembering correctly, one reason Yale dropped wrestling in the early 1990s was that their financial advisors (let that sink in:  Yale's financial team miscalculated) allowed too much money to be withdrawn from the endowment and ran into difficulty.

A one-million dollar gift might earn 7 or 8 percent in a safe investment, but that doesn't mean they'll spend $70,000 or $80,000.  At least half that will be plowed back into the principal to maintain its value.  At a high-priced school with a full scholarship requiring $75,000 each year it probably requires $2 million to endow a single scholarship. 

You can expect to spend around 5 percent from an endowment per year. Furthermore, donations should keep coming in as it grows from one to all 9.9 scholarships + expenses. Of course it will cost more to endow a scholarship at Lehigh than a state school with in state tuition, but the point is that when the decision is made to cut a sport, it won’t be the one with the large external endowment that goes away if the sport gets chopped. 
 

Do you think Oregon state is stopping at 5 million? Of course not-they are building something there. Alumni and fans from other universities can either sit around and wait to complain when their team gets cut, or follow this lead and start building now.

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That's all mostly correct although I suspect the 5% figure is high.  Still, if a program tries to fully endow scholarships starting from scratch, it means raising 10 to 20 million minimum.  That's a lot of $100 checks.  Syracuse's program collapsed because they didn't have the handful of big donors who would provide large gifts; they had lots of small donations but it wasn't nearly enough.  Less than a decade after their last EIWA team title and their last NCAA champion they were gone.

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1 hour ago, Plasmodium said:

I recall OrSU being fairly expensive for out of staters.  Using jdalus formula, their endowment would pay for 4 scholarships. 

One of the problems related to this is that they did not belong to the WUE until recently which is a program to exchange out of state tuition for member schools. Going forward this will save money for out of state kids. 
 

OrSU also has a solid booster and alumni group and it doesn’t hurt to have Reser in town. The area where they have needed to raise more funds is the RTC which they have already been doing with the new staff. 

Edited by Idaho

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1 hour ago, Plasmodium said:

I recall OrSU being fairly expensive for out of staters.  Using jdalus formula, their endowment would pay for 4 scholarships. 

Glad to see someone else agrees on name abbreviations. OrSU, OkSU, OhSU(not tOSU)

To be fully endowed, not just scholarships: Coaches and assistant coaches(also Trainers, weight coaches etc), Transportation, Equipment(I guess mostly uniforms, Mat depreciation, say 10% of the cost of a Mat annually), other stuff

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27 minutes ago, jdalu75 said:

That's all mostly correct although I suspect the 5% figure is high.  Still, if a program tries to fully endow scholarships starting from scratch, it means raising 10 to 20 million minimum.  That's a lot of $100 checks.  Syracuse's program collapsed because they didn't have the handful of big donors who would provide large gifts; they had lots of small donations but it wasn't nearly enough.  Less than a decade after their last EIWA team title and their last NCAA champion they were gone.

The entire point is that it’s much easier to endow a program over 10 to 20 years while the team still exists than to wait for it to get cut and try to endow the program to “save” it. By then it’s too late, and a well put together YouTube video and a bunch of retweets won’t do anything.

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1 hour ago, Billyhoyle said:

The entire point is that it’s much easier to endow a program over 10 to 20 years while the team still exists than to wait for it to get cut and try to endow the program to “save” it. By then it’s too late, and a well put together YouTube video and a bunch of retweets won’t do anything.

This is spot-on.  It falls on the coach and his attached AD. Some coaches won't even coach, some dedicate their lives to the program and understand the importance of business.

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17 minutes ago, shieldofpistis said:

Doesn't Penn St actually make money for program in wrestling?  

Possibly and Iowa as well.  Nebraska  many tens of millions off of FB,  maybe 5M on Basketball and 250K on W volleyball.  Every other sport was a net loss. 

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2 hours ago, aknipp said:

Possibly and Iowa as well.  Nebraska  many tens of millions off of FB,  maybe 5M on Basketball and 250K on W volleyball.  Every other sport was a net loss. 

Pretty sure Rutgers broke dead even on Wrestling. And their future looks brighter..Before they hired Goodale the Program was a train wreck and never would have survived these times

Edited by moveurfeet32

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3 hours ago, shieldofpistis said:

Doesn't Penn St actually make money for program in wrestling?  

I've read they don't.  I think it was the same article they were having a spat with another PSU team over the use of a private jet for recruiting.

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10 hours ago, Billyhoyle said:

The entire point is that it’s much easier to endow a program over 10 to 20 years while the team still exists than to wait for it to get cut and try to endow the program to “save” it. By then it’s too late, and a well put together YouTube video and a bunch of retweets won’t do anything.

Not arguing with any of that.  I just don't think it works with lots of small donors.  That helps, but without a few supporters with deep pockets it doesn't happen.

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Fundraising and promotion go hand in hand. Coaches and ADs at Wyoming travel around the state organizing dinners, luncheons and other fundraising activities.  They bring athletes along as well.  The Ad helps them writevspeeches and the athletes deliver the speech.  Nice experience for them. 

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I have a question...does tuition really "come out" of an endowment? 

Edit:  For clarity...I am talking about in regards to scholarships for athletes.

Edited by dman115

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33 minutes ago, dman115 said:

I have a question...does tuition really "come out" of an endowment? 

Edit:  For clarity...I am talking about in regards to scholarships for athletes.

For the sake of this conversation and in the case of Oregon State, we are talking about an external endowment set up by supporters of the wrestling program.  This type of endowment is not connected to the university endowment-the basic concept as Oregon State has shown is to have this external endowment subsidize costs of the wrestling program (in their case $250K per year), essentially allowing the university to run the program at a discount.  In turn, when the time comes that the university has to decide which program to cut, they become less likely to cut wrestling (as opposed to a different sport that costs full price).  Importantly, the endowment itself is not connected or controlled by the university, so unlike endowed scholarships that are part of the university, it cannot be reallocated to a different sport upon cutting the program. 

Now, in terms of where tuition for scholarship athletes come from:  That is considered part of the expenses of the athletic department. Sometimes there are endowments set up within the athletic departments that help to subsidize costs, but these are internal, and in reality are controlled by the university. I'm not sure, but i'm assuming that these gifts are considered part of the university's general endowment fund. 

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1 hour ago, dman115 said:

I have a question...does tuition really "come out" of an endowment? 

Edit:  For clarity...I am talking about in regards to scholarships for athletes.

If you are asking if the university distinguishes between the tuition paid by an athlete and paid by non-athletes - no.  There is no accounting trick. The money moves from student/athletic department to university and the student-athlete has to authorize the transaction.

Edited by Plasmodium

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2 hours ago, dman115 said:

I have a question...does tuition really "come out" of an endowment? 

Edit:  For clarity...I am talking about in regards to scholarships for athletes.

 

1 hour ago, Plasmodium said:

If you are asking if the university distinguishes between the tuition paid by an athlete and paid by non-athletes - no.  There is no accounting trick. The money moves from student/athletic department to university and the student-athlete has to authorize the transaction.

I don't think that is what he is asking.  If a specific athletic position, weight etc is endowed then the tuition for that student athlete is paid for out of the income from the endowment, same would be true if the head coach or entire program is endowed thus DIA would not pay said tuition or salary from their revenue.  It's the same as having an undergraduate scholarship endowed or a professorship, then that student's tuition or that professors salary & benefits are paid from income on the endowment.  Same regarding graduate program, students, research etc.  The university doesn't provide "free" students, you write a research grant and include tuition, benefits plus 50% overhead to the university to fund the grad student/project.  Now if you have an endowed research program then can fund a certain # of students, travel, equipment etc off the income without needing to write grants for that portion of your research.

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14 hours ago, jdalu75 said:

Not arguing with any of that.  I just don't think it works with lots of small donors.  That helps, but without a few supporters with deep pockets it doesn't happen.

One of the secrets of fundraising is that to get a big donor it is immensely helpful to have many small donors.  People with money are much more likely to give big dollars to something that they see as being widely supported

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43 minutes ago, ionel said:

 

I don't think that is what he is asking.  If a specific athletic position, weight etc is endowed then the tuition for that student athlete is paid for out of the income from the endowment, same would be true if the head coach or entire program is endowed thus DIA would not pay said tuition or salary from their revenue.  It's the same as having an undergraduate scholarship endowed or a professorship, then that student's tuition or that professors salary & benefits are paid from income on the endowment.  Same regarding graduate program, students, research etc.  The university doesn't provide "free" students, you write a research grant and include tuition, benefits plus 50% overhead to the university to fund the grad student/project.  Now if you have an endowed research program then can fund a certain # of students, travel, equipment etc off the income without needing to write grants for that portion of your research.

Is this correct?

Scholarship Money flow:  Endowment->Athletic Department->Student->University->Student.  The student will receive actual money only after all university financial obligations are met.

Professor Money Flow: Endowment->Department->College(if applicable)->University->Professor,  all three intermediate stages involve a siphoning

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9 hours ago, Plasmodium said:

Is this correct?

Scholarship Money flow:  Endowment->Athletic Department->Student->University->Student.  The student will receive actual money only after all university financial obligations are met.

Professor Money Flow: Endowment->Department->College(if applicable)->University->Professor,  all three intermediate stages involve a siphoning

No, I would not call that "correct," there's no simple flow chart, it varies, i could give other examples (scholarship, fellowship, research contract etc) but was just trying to address simple endowment example. 

Edited by ionel

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Thanks all for the explanations!  Seems like a way over-processed...well...process.  But I am sure all those smart people at the university's have a completely logical reason for doing so....man that was hard to write with a straight face...and yes I am a cynical middle-aged man.  LOL

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On 8/10/2020 at 1:42 AM, IronChef said:

 

There are 28 Power 5 wrestling teams (incl. Stanford). It looks like the football season will officially go away this week. Are any of these teams in trouble?

 

ACC - Duke, UVA, VT, Pitt, NC St, UNC

PAC-12 - ASU, Oregon St, Stanford

Big 12 - OK St, OU, ISU, WVU

B1G - MSU, Michigan, Indiana, Purdue, Iowa, Illinois, Minnesota, Ohio St, Penn St, Rutgers, Maryland, Northwestern, Nebraska, Wisconsin

SEC - Missouri

 

Big 12 has stupidly announced they will have a football season, so assuming OU continues making money on the football field their wrestling program will continue to be funded. Same for OSU, although their football team sucks balls.

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On 8/16/2020 at 10:51 AM, TobusRex said:

Big 12 has stupidly  announced they will have a football season, so assuming OU continues making money on the football field their wrestling program will continue to be funded. Same for OSU, although their football team IS ranked #16 in the country sucks balls

FIFY

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2 hours ago, red blades said:

Is that out of the 18 teams still thinking they are playing this season?

No skin off my back. I’m not a fan of either. If there were 18 my team might finish in the top 18. If they were playing. 

Edited by Idaho

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