An economic analysis firm involved in the Ed O'Bannon vs. NCAA class action lawsuit also released a report challenging the University of Alabama - Birmingham's (UAB) reasoning for shuttering its football program.
According to ESPN, OSKR partners Dan Rascher and Andy Schwarz released their report Thursday and concluded the financial problems UAB cited in deciding to end the football program might not have existed. Alongside the football program, UAB also discontinued their rifle and bowling teams.
In closing the programs, UAB indicated the ruling O'Bannon vs. NCAA, allowing schools to cover the full cost of attendance for athletes under scholarship, would cause the program to lose money.
"We find that the three sports in question did not cost the university anywhere near the $3.75 million indicated on UAB's accounting statements," Rascher and Schwarz wrote. "Instead, after making the sort of adjustments suggested by the economics literature, we conclude that the three sports were effectively break-even to slightly positive. Football and bowling showed a modest positive return for 2013-14, the last year for which complete data was available. Rifle showed a deficit, but the three-sport balance was positive to the tune of $75,000."
UAB came under fire in March when AL.com released a report containing university documents that indicated the school knew it would be closing the football program months before making a formal announcement.
Rascher and Schwarz consulted for the plaintiffs in O'Bannon vs. NCAA, shooting down the latter's claim that full-cost-of-attendance scholarships would cause schools to lose money. While most universities' athletic departments report little to no profits, the schools themselves are nonprofit instructions and the athletic departments spend most of the money they make to close those profit margins.
As a Conference-USA member, UAB seemingly believed they would lose out in recruiting battles to the bigger, richer schools in the Power 5 conferences and therefore lose visibility and money. Rascher and Schwarz determined this would not have been the case.
"We conclude that going forward, anticipated improvement in ticket sales from 2013-14 levels and new College Football Playoff revenues will outpace new expenses from Cost of Attendance stipends and unlimited food allowances," they wrote. "Once these new revenues and expenses kick in, we anticipate the aggregate annual surplus from football, bowling, and rifle would exceed $500,000, even without including the anticipated but hard-to-quantify benefits to admissions and enrollment, donations, and media exposure."
