Wrestling with the truth in Nebraska

OMAHA, Neb. -- The chance to play football was "98 percent" of the reason Max Dennis decided to enroll at the University of Nebraska-Omaha in 2007, even if it meant paying out-of-state tuition with not even a partial athletic scholarship.

Four years and almost $80,000 in student loans later, Dennis lost his final year as a linebacker for the Mavericks when the university announced in March it planned to drop its football and wrestling programs and move to Division I.

"I was stunned. I didn't know what to think, because there was no mention of anything before that," Dennis said. "I could have gone to a cheaper school. The reason I came to this school was so I could play football."

UNO athletic director Trev Alberts said the university couldn't afford to keep football and wrestling in its move up from Division II to join the Division I Summit League, which doesn't sponsor the two sports. But an analysis of various financial statements and studies by "Outside the Lines" and economist Andy Schwarz shows discrepancies in UNO's numbers and raises questions about predictions that the university will fare better financially in Division I without the two programs.

Alberts, who was hired as athletic director two years ago, is a former All-American linebacker from the University of Nebraska-Lincoln. After three years in the NFL, he became a TV sports analyst and worked for ESPN until 2005.

Alberts, along with UNO Chancellor John Christensen and other university officials, turned down several requests by "Outside the Lines" to review the figures, and they declined to any answer questions about the university's decision.

"By choosing to make the jump to D-I without football, UNO has made their chance of success much lower," Schwarz said. "Whatever additional money and other benefits they will earn [in D-I] is less than they would likely earn if football were part of the D-I package, because they've understated the benefits of football and wrestling by about $1.5 million."

Forgetting about the revenue provided by athletes such as Dennis is just one of the economic oversights, said Schwarz, an antitrust economist and partner at OSKR, a firm in Emeryville, Calif., that specializes in economic analysis and expert witness testimony. Schwarz has conducted several studies of college sports finances and accounting.

In public statements, Alberts said the football program was losing $1.3 million a year. However, according to financial statements filed with the NCAA that "Outside the Lines" obtained through public records requests, the football program was short $50,500 in revenue, and the wrestling program was ahead by $143,000 for the 2009-10 fiscal year.

Where Alberts seems to be making his argument is by not counting the $1.2 million that the football program receives from student fees and direct funds from the university, according to the NCAA report.

The entire athletic department gets about $5.9 million from student fees and university funds, which is about 2.5 percent of the university's total revenue. Alberts has said he projects that the department would require $7.9 million if it kept the football and wrestling programs -- an amount he said the university couldn't afford.

After the announcement, Alberts wrote to a regent in an email obtained by "Outside the Lines": "The current trend for UNO athletics is flat generated revenues, dramatically increasing expenditures and an involuntary increase in state support to stay in business. Our current model is simply not sustainable financially."

At the Nebraska board of regents meeting on March 25, when the proposal was voted on and approved, Alberts pointed to a series of slides projecting the growing increase in university support of athletics. That trend doesn't make sense to Chris Bober, a former UNO football player, who played eight seasons in the NFL before returning to Omaha, where he lives.

"Why is it that when the university is growing by leaps and bounds they have to reduce opportunities in athletics? It doesn't fit," he said.

In its own accounting, the NCAA will subtract student fees and university funds, along with other government support, to determine whether programs can generate enough revenue on their own to cover their expenses, which is rare even among Division I schools.

In fact, among all Division II programs with football, the median support from student fees, university and government funds combined is about $800,000 for a football team; within UNO's Division II conference, it's about $900,000.

But Schwarz said he doesn't put a lot of faith in those numbers, either, because they don't count the revenue that nonscholarship athletes contribute to the program, which is especially significant for Division II programs that offer far fewer scholarships than big-name Division I schools. It's just one of a number of problems Schwarz sees in how UNO came up with its conclusions.

"They're extremely typical in the sort of mistakes they're making. It's sort of a fundamental mark of bad accounting that they just don't have revenues and expenses match," he said. "They're charging themselves expenses and not giving themselves account for revenues in the way that they should. That's endemic to college sports accounting."

Schwarz drafted the economic arguments in a letter sent by 21 economists and sports management and antitrust experts in April, requesting that the Department of Justice launch a formal investigation of college football's Bowl Championship Series (BCS) because they say it harms competition, fixes prices, reduces quality and prevents a playoff system.

UNO had 36 football scholarships divided among 77 of the 121 football players from this past season, and players such as Davis were paying the more expensive out-of-state tuition. The university counts the cost of athletic scholarships as an expense against the football department, but it doesn't count the tuition that student-athletes pay as revenue. If it did, Schwarz said the football program could count at least an additional $700,000 in revenue, and for wrestling it would be at least $200,000.

According to university records obtained by "Outside the Lines," by mid-February the Summit League had already extended an informal invitation to UNO, and Alberts and his advisers concluded that the football program would be dropped in the move.

At that time, UNO hired Alden & Associates consulting company for $20,000 to do a feasibility study on UNO's plans; it was allowed a two-day visit and two weeks to finish its report, which the report authors acknowledge didn't allow them to review any data independent of the figures UNO had already calculated.

Although the consultants said they agree with UNO's overall conclusion to move to Division I and drop football and wrestling, they said the athletic department was "too optimistic" about the money it can make from men's ice hockey, which already competes in Division I in the Western Collegiate Hockey Association.

"We would caution against putting too much reliance on this or any other single revenue source," the report states.

Yet UNO is banking on hockey to be its marquee sport and primary revenue generator in the next few years. Officials have discussed plans to build a new arena for hockey near campus, according to various public records, even though hockey attendance is lower than it was in the late 1990s and early 2000s, and UNO numbers indicate the program operates at a loss.

The Summit League doesn't sponsor hockey, so the sport competes in a different Division I conference, the Western Collegiate Hockey Association. Competing in a different Division I conference was a possibility for football and wrestling as well. But Summit League commissioner Tom Douple points out that if the university kept those sports and didn't add others, it would have only three men's programs competing in the league. Instead, UNO plans to use money previously spent on football and wrestling to add soccer and golf, which are Summit League sports.

Also at issue is whether UNO had to drop football and wrestling to stay in compliance with federal Title IX gender equity rules if it moved to Division I and added men's soccer and golf. In the figures UNO provided to the consultants, it states the football program had 143 players, and that men made up 64 percent of all athletes.

But football coaches say they had about 120 players on their roster this year and never came close to 143. In the university's most recent report to the federal government, it reported 112 football players. Coaches say if Title IX was really an issue, they could have cut their roster by up to 50 players -- which could have made room for a soccer and golf team and still reduced the overall number of male athletes.

Schwarz said it is a university's prerogative to cut sports it doesn't want anymore, but he said to argue that football and wrestling had to go because they were costing too much money is disingenuous or the result of poor accounting.

"They're allowing the numbers to fool them into making bad decisions," he said.

Van Deeb is just one of many UNO alumni and donors who doubt the financial reasons given for cutting the programs, especially in light of how no one outside a close circle of advisers knew about the decision until the day before it was announced to the public.

"They're blaming it on the numbers, but nobody can come up with what the numbers are. And even if the numbers were accurate, they didn't give anybody an opportunity to come forward and to try to make things happen," said Deeb, who played for the UNO football team in the late 1970s and has been a member of the athletic department's advisory board for 18 years. He said Alberts talked last fall about taking the football program to Division I, not cutting it.

"What made me so upset is that nobody was involved in this process," he said. He said if the programs were in trouble, Alberts should have rallied the donors and other supporters to work out a solution. "None of that happened. And so to me, it was the highest level of disrespect I've ever seen."

Football coach Pat Behrns declined comment. In order to receive severance pay from UNO, football coaches had to sign an agreement that they would not publicly criticize the university, said football coaches who spoke only the condition of anonymity. They said Alberts gave them no sign the program was in jeopardy.

In February, at which time records indicate that plans were already in place to drop the program, Alberts authorized the hiring of an assistant football coach from Minnesota. And he approved the signing of two junior college transfers less than a week before the official announcement, coaches say.

Wrestling coach Mike Denney got the word about his program around 11 p.m. on March 12, when Alberts called him just hours after his team had won the Division II national championship. The football coaches had heard about it just a couple of hours earlier as rumors spread through text messages from people who said they'd already read about it online.

"I said, to treat us the way you're treating us is treating us like we're trash, and you know, you can just wad us up and throw us in the trash can," Denney said. "If you keep treating people like this … within your organization, it's not going to work. It won't work."

Denney, who had coached the team for 32 years and will coach next year at Division II Maryville University in St. Louis, said his team had been successful in raising money to support itself, and he's certain that if more people were in on the discussion from the beginning, they could have found a way to save both programs.

"It goes back to statistics. You can kind of get them to say what you want," he said. "It was a small group, a very small group … and there was not one person that I felt was really battling and thought we were of value enough to overthrow the agenda. And there was an agenda."

In an attempt to find out what had been discussed in the past year, "Outside the Lines" made a public records request for documents, including email messages, pertaining to the Division I move and the elimination of programs.

According to the university records officers, all emails relating to those topics that were sent or received shortly before the NU board of regents meeting on March 25 had been deleted. State law requires that all correspondence which has "long-term ramifications to the operation of the agency" be retained for eight years. Officials also denied a request for the chancellor's and athletic director's calendars.

The records that were released did show that one of the people Alberts consulted was Dana Bradford, who is president of McCarthy Group. The company has a development interest in the area where UNO is planning to build a new arena for hockey, basketball and other sports. Bradford did not return calls seeking comment.

Bober is suspicious.

"To my knowledge, they haven't been willing to answer any questions about anything from anyone. Now if it's the right thing to do, you have nothing to hide from. That's my feeling," Bober said. "If you didn't do anything wrong, then why won't you come out and face it? And all of these things point to a motivating factor that we haven't been told."

Bober, Deeb and other supporters also believe a reason behind dropping the football program comes from the University of Nebraska-Lincoln, home to the Cornhuskers, who might see a Division I football team in Omaha as a threat to its successful walk-on program. Nebraska athletic director Tom Osborne said that isn't true, and chancellor Harvey Perlman said he heard of UNO's Division I plans only about a week before they were finalized.

"Because of the potential powerhouse that Nebraska-Omaha could have built, I think that was intimidating to the powers that be at Lincoln. And I think there might be some other scenarios," Deeb said. "One of my first thoughts was, you know, Trev Alberts is in line for Tom Osborne's job. Or it's going to look a heck of a lot better coming from … a complete, full Division I school on your resume than it is coming from a Division II school with Division I hockey."

Perlman wouldn't comment on whether Alberts was being considered as the next athletic director in Lincoln.

"I know there are a number of people in Omaha who are very upset with UNO's decision to drop [programs]," he said. "I suspect they are trying to find some devil to blame it on. In this instance, we had no involvement and no interest in impacting UNO's decision. They made that on their own for their own purposes."

In the last five years, 10 universities have made the jump from Division II to Division I. None have dropped programs in that move, according to NCAA data. Bober said he hopes UNO's move doesn't signal a new trend where athletics programs get dropped if they can't make a profit.

"I think that programs should be held to a standard to where they maximize the amount of revenue they can generate, but they shouldn't be expected to generate more than it costs because … it's not realistic," he said. "And that's because, mostly because, that's not what college athletics are about. They're about competing. They're about education. They're about opportunities. And if you start basing success on revenues, on trying to make a profit, well, then you're not going to find many successful programs anywhere."