Courtesy: Al Featherston, GoDuke.com Release: 03/12/2013
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DURHAM, N.C. - Duke University was slow to join the Southern Conference.
When the region’s first athletic conference was formed in the spring of 1921, Duke was still Trinity College and administrators were wary of giving up the school’s independence. It wasn’t until 1928 that the newly christened Duke University joined its neighbors in the Southern Conference as the league’s 23rd member.
The Southern Conference would be the school’s athletic home for a quarter century. During that period, the mammoth league went through a number of transmutations with 11 schools leaving (10 split to form the Southeastern Conference in 1932) and eight new schools joining. By the early 1950s, the Southern Conference was once again a bloated monster – deeply split between schools such as Duke – that wanted to compete at the highest level and those that refused to commit major resources to athletics.
In contrast to its slow action in the 1920s, Duke was one of precipitators of the foundation of the Atlantic Coast Conference in the spring of 1953. Blue Devil athletic director Eddie Cameron played a key role as the seven strongest members of the 17-team Southern Conference met in Greensboro, N.C., to form the new league.
The ACC formed that weekend has been Duke’s athletic home for the last 60 years. Like the old Southern Conference, it’s undergone a number of changes – starting with the addition of Virginia in the fall of 1953 and including the departure of South Carolina in 1971 and the addition of Georgia Tech in 1979 and Florida State in 1991.
Over the last decade, the league has endured more turmoil than its first 50 years combined. Mostly, it’s been about the addition of new schools – three in 2005-06 and four more due by 2014-15 (including the ACC’s first partial member).
The ACC has also seen charter member Maryland decide to leave for the Big Ten. Fans of the ACC have endured a barrage of rumors about other departures, including a firestorm of speculation last spring that Florida State and Clemson were about to jump to the Big 12. Earlier this month, a Maryland blogger posted a story that linked three ACC schools to the Big Ten … an internet rumor that was picked up and prominently displayed by the likes of ESPN and The Sporting News.
Most of the speculation has been internet nonsense, but there is no denying that the college sports landscape is reshaping itself. Power conferences are turning into mega-conferences, driven by the desire to maximize football dollars.
Where does that leave the ACC? And if Duke’s home for the last 60 years flounders, where does that leave Duke?
Those are concerns that current Duke Vice President and Director of Athletics Dr. Kevin White has to confront. He’s determined not to be dilatory like the Trinity administration in the ‘20s. Instead, he’s planning to follow the proactive path that Cameron pioneered in the early ‘50s.
“If you are Duke, what you want to do is be a leader in creating tomorrow,” White said recently. “You don’t want to run the risk of having someone else create tomorrow for you and make you see the world through their respective prism … quite frankly, you would find that to be uncomfortable, and/or untenable for a place like Duke.”
While White has some concerns about the changing sports landscape, he believes that Duke is in a strong position for the future.
“To be honest, I think college athletics needs Duke – college athletics needs institutions that are seriously committed to the highest academic ideals and that can compete on gameday,” he said. “There are but a large handful of those institutions.”
THE NEW GAME IN TOWN
In addition to his duties as Duke’s Vice President and Director of Athletics, White is an adjunct professor of Business Administration and currently teaches a sports business course at Duke’s Fuqua School of Business. That gives him a unique perspective on the financial forces that are driving the changes in college athletics.
“Here’s the game we’re playing,” White said. “In my 31 years [of sports administration], there was a time when I felt we were largely an educational enterprise with some opportunities to dabble within the entertainment business. With those opportunities, we began to commercialize ourselves and find ways to monetize college athletics. Over time, there has been a distinct evolution in that regard.
“Thirty years later, a lot of places are clearly in the entertainment business and endeavoring to hold onto the yesteryear educational myth. That’s cynicism at its best. We’re one of those select institutions that really values the educational component of collegiate athletics, but we also fully realize that there are some entertainment or institutional advancement opportunities as it relates to college athletics as well.
“So, we’ve got this hybrid that is partially education based and influenced to a great degree by the commercial market. That’s been the transition I have observed, first hand, over the past three decades.”
The biggest factor in the new sports world is the explosion of television money for college football. Oh, college basketball is big money too – but White estimates that football income is nearly four times larger than basketball income (roughly 80% driven by football, 20% by basketball).
Those numbers are driving the movement towards mega-conferences.
“If intercollegiate athletics is indeed becoming more commercially influenced, then why would it not operate like the free market system, which, in my opinion, is exactly what is happening,” he said. “Why wouldn’t we think that the informal system in question isn’t endeavoring to amortize more resources across fewer units?”
He points out that college sports is just following other sectors in the free enterprise system – banking, airlines, media, etc. All are coalescing into fewer – but larger – entities.
“It’s called compression state economics and the basic theory of compression state economics is to amortize more resources across fewer units,” he said.
“That’s the game we’re playing. It’s a free enterprise game. Intercollegiate athletics has morphed from an educational sublet, which was clearly under the proprietary control of the academy, wherein now we’ve ventured into this commercial world and we’re getting impacted by all the influences and forces within that crazy world.”
In football – the sport that is driving this – White sees the same compression at work.
“Once upon a time, we had some 31 Division 1 conferences,” he said. “Then there was a day about 13-14 years ago where we had six really relevant conferences. We actually codified them as the BCS group. Now we have five of those remaining and some pundits are forecasting that at some point, we’re going to have four.”
White said that all of this was prognosticated, to some degree, in 1972 by James Michener, in his book Sports in America.
“He talks about conferences that would morph into large consortia that would be no more than entities that would negotiate media rights,” the Duke athletic director said. “They become mini-associations. Our highly celebrated author loosely suggests that there could be a grand new association created by the remaining consortia.”
That sounds an awful lot like more recent prognostications that a group of major resource football schools – maybe 60 or 70 – could break off from the NCAA and form their own national collegiate sports organization.
If that happens, the schools left behind could wither into athletic irrelevance.
SURVIVING THE FUTURE
The ACC has survived the transition from 31 to six to five relevant (and profitable) conferences.
But how strong are the league’s prospects? According to news on the internet, half the schools in the league are looking to jump somewhere else.
White doesn’t buy that.
“You can never be 100% certain, but having returned recently from an ACC meeting, my opinion and professional instinct is that we’ve never had more solidarity within the ACC,” he said. “There is a much clearer sense that we are in a stronger position relative to both TV revenue and appearance platforms – both network and cable – that are being aggressively marketed through a variety of vehicles.”
It’s been reported that the ACC ranks fifth among the five remaining power conferences in terms of annual television revenue. But White said that those reported numbers are inaccurate.
“Our network and cable television revenue is very similar in scope to the SEC, Big 12 and Pac 12 at the moment … and that doesn’t account for prospective channel resources that have yet to be developed,” he said. “In some media outlets, there has been a suggestion that all conferences are making an inordinate amount of resource via their conference channels. That is simply not the case. The only channel that is generating a sizeable piece of revenue is the Big Ten Network. Once again, at this point, the others are not.”
Because of the successful Big Ten Network, that league is significantly more profitable than the ACC. But that’s the only league with a distinct advantage.
And White said the ACC is exploring ways to increase its revenues.
“We’re looking at every possible revenue opportunity. At this point in time, although it has been suggested that the ACC is behind in revenue generation, we’re actually in a much stronger position than most everybody realizes. To be sure, that certainly strengthens the ACC’s sense of solidarity – once you have the real numbers and not the publically articulated numbers based on speculation that has largely been manufactured.”
The misreported financial figures for various conferences led to an amusing – but revealing – incident last spring. A Florida State trustee, reading about the difference in television revenue between the Big 12 and the ACC, publically urged FSU to explore a move to the Midwestern-based conference. When the school’s administrators showed him the real figures, he quickly backtracked.
“The skinny is, we’re in a much stronger position than the fan on the internet, or anyone else, can appreciate from a financial standpoint,” White said.
That doesn’t mean the ACC can sit back and ignore the changes going on in the sports world. The coming additions of Syracuse and Pittsburgh, the replacement of Maryland with Louisville and the addition of Notre Dame as a partial member – something the ACC refused to consider as recently as 2005 – all reflect the league’s proactive approach to the new sports world.
“As the ACC, which has been a really traditional conference, navigates itself through this new world, it is having to kind of reshape, and to some degree, rework its culture,” he said. “If you are Duke, I think you are much more attracted to a traditional, yesteryear model. You’re heavily influenced by our unwavering commitment to education, but you do realize that you have some significant opportunities on the entertainment side.
“We’re also looking at a number of creative things, as we look to the future, to even further enhance our position. Hopefully this will ensure a bigger, stronger, faster ACC.”
White said that the ACC is in a great position as it looks to the future.
“Our footprint now – in terms of households – which is what we’re dealing with presently … in the next iteration, we’re probably going to be talking eyeballs – is larger and greater than any other conference,” White said. “That’s something that most everybody would be surprised to learn – larger than the Big Ten, larger than the SEC, larger than the Pac 12 and certainly larger than the Big 12. THE largest.
“That is really positive as the television economic model continues to change.”
THE FUTURE FOR DUKE
As long as the ACC remains one of the major players in the college sports world, Duke’s position is likely to be secure.
But White is not to content to rely on the conference to protect Duke’s status as one of the nation’s elite athletic institutions.
His problem is that Duke’s strengths – basketball and Olympic sports – are peripheral to the driving force of realignment, which is football. And while the Blue Devils were once one of the nation’s elite football programs, that was long ago. When White arrived in Durham in 2008, he inherited a struggling football team with a poor record in recent years and a weak foundation.
Coach David Cutcliffe, his staff – along with White and the athletics administrative team – have worked diligently since then to revitalize Duke Football.
“Duke must continue to reinvest in football, we’ve got to get back to a place wherein we are very competitive,” he said. “That’s why we’re working like hell to resuscitate the Blue Devil football program. In addition, everything else needs to be highly competitive.”
There has been progress. The football team has steadily improved under Cutcliffe, qualifying for a bowl last season — Duke’s first bowl since 1994. Facilities have improved and will continue to improve. Duke announced a $250 million athletic fund-raising campaign last fall and a significant portion of that money will go towards rebuilding historic Wallace Wade Stadium.
The improvements included in the so-called Bostock plan will have other benefits.
“To create amenity laden facilities and provide hospitality in Cameron and Wallace Wade creates a residual effect for Olympic Sports, as well as the entire campus community, notwithstanding campus recreation,” White said.
“Once again, we need to invest. There are no free lunches. Our constituents need to understand that there are consequences. As of late, we’ve moved from absolutely off the radar – wherein Duke football was irrelevant – to now folks across the country are talking about Blue Devil football. We’re now relevant.”
He points to Duke's bowl appearance against Cincinnati in the Belk Bowl.
“We had 20,000 people in Charlotte,” White said. “Any Dukie I talked to when David and I got here said that one of the worst things [that we had] to face is that when we do qualify for a bowl, if that were to ever happen, we’ll have 2,500 fans and we’ll embarrass ourselves. Again, we had some 20,000 Duke fans at the Belk Bowl.
“Did you see the TV ratings? There were 35 bowls and we were 15th in bowl ratings. We played on a week night, a work night and we kicked off at 6:30, so we didn’t have the West Coast at 3:30 in the afternoon. And we still had the 15th best rating.
“So when Duke is relevant … we can be highly impactful.”
Of course, Duke is always impactful on the basketball court. The Blue Devils have one of the best – if not THE best – basketball programs in the country. Duke basketball is a nationally recognized brand name and is a fixture on TV sports. The Duke-UNC rivalry games are the most valuable regular season TV properties in college basketball.
But could basketball carry Duke if the school was somehow lost in the shuffle of realignment?
“To that end, I’ve long said we can’t allow that to become Duke’s scenario,” White responded.
But he concedes that the danger is there. Along with the rest of the country, he saw how close Kansas – another great basketball power – came to losing its BCS status in 2011, when the Big 12 almost collapsed. The big football schools looked like they were going to split for the Big Ten, Pac 12 and SEC, leaving Kansas to join perhaps Conference USA.
Even more frightening – if the top 60 or 70 football programs leave the NCAA to form their own parent organization, what happens to the schools that get left behind? There are some famous basketball programs at schools that don’t have big-time football – think Georgetown, Butler, Marquette, St. John’s, Villanova and Gonzaga.
Can those schools continue to compete at the highest levels in basketball when so many national powers have left them to compete in a football-driven organization? Could Duke be in that position?
“That scenario should get the full attention of the entire Duke family,” White said. “Part of me doesn’t know how that would eventually play out. However, you can look at this through many prisms. Do I lay in bed and say ‘Oh my goodness, are we going to eventually become a mid-major?’
“No, I don’t. Because I firmly think that our brand is way too strong. We have so many wonderful assets.”
Still, he points out that things do change. The University of Chicago was a charter member of the Big Ten, coached by Amos Alonzo Stagg. Santa Clara, Fordham, Marquette were all football powers before World War II. Then there are the great women’s basketball champions such as Immaculata and Old Dominion, programs that were eclipsed when the AIAW, which organized the first women’s national championships, were replaced by the NCAA.
“What happened? The world changed – at least for them,” White said.
The danger is that the schools getting flush on the massive football money would be able to outspend the schools that don’t share in that largess. So what if traditional powers and TV favorites such as Georgetown and Butler and Gonzaga and Villanova are left out? The football schools will have significant media, and other, advantages on the basketball side.
“Without question, I think that football television will rebrand those institutions,” White warned. “They are going to be so dramatically rebranded, and that will carry the day. You are not only competing for resources, you are competing for media platforms as well as financial resources, if not for marketing/advertising impressions. It’s simple marketing theory! That’s what this game is – this is branding, and/or re-branding at its basic level. We will rebrand the properties that define tomorrow’s universe within elite college athletics.”
That’s why Duke – and White – are working so hard to keep Duke in the football mix.
“Duke has invested,” he said. “There is a lot going on here. We have the capacity to be really competitive in football. That has been the missing programmatic ingredient within the Duke athletics sphere, but we’re working very hard to restore our yesteryear, highly competitive position."
He points to Northwestern, Stanford and Vanderbilt as three academically oriented schools that have committed resources to football and have reaped the rewards.
“These outstanding institutions are looking at precisely the same landscape at which we’re looking,” White said. “They’ve done it in a very strategic way – not unlike Duke … we have just started a bit behind them relative to football.”
White was the athletic director at Notre Dame when he got a first-hand look at Stanford’s commitment to football.
“Stanford went 1-11 in 2006,” he said. “That last game they played in their old stadium, they had the bulldozers in the end zone as Notre Dame walked off the field … as I walked by and the bulldozers were humming, they went in, immediately following the game, and ripped up the field. Within 12 months, they built a new football facility, with a $100 million dollar gift via a major athletics benefactor.”
It didn’t take long for that investment to pay off. Over the last five years, Stanford has become a major power on the gridiron.
“To be candid, they didn’t emerge from 60 years of largely non-competitive football like Duke,” he said. “Of course, we had enjoyed a couple of good teams, but we didn’t really have a sustainable program built on an unwavering commitment. We weren’t investing. Stanford was in much better shape in that regard.
“Again, we started at a different low ebb, but when you look at where they are now and when they started to invest – they have an awfully good football program. As does Northwestern.”
Northwestern had a quarter-century of neglect that was longer and lower than Duke’s low point from the mid-1990s until the arrival of Cutcliffe.
“They got serious in the mid-90s … we got serious in 2008,” White said. “I think it’s fair to project that in four or five years, we’ve got a chance to be not unlike any of those programs.”
If that happens, Duke’s athletic future will be secure, no matter what happens around it.
There are almost certainly going to be more changes in the college sports landscape in the future – just as the landscape has constantly changed in the past. Duke University has been able to navigate the previous changes to remain an elite athletic power.
“This is our time – we have the very best coach, in any sport, at any level in Mike Krzyzewski. Coupled with a great number of extremely successful coaches in all of our other sports, we are in a once in a thousand lifetimes position in that regard.”
And while the future isn’t assured for the Blue Devils (or anybody else), it’s far from a gloomy outlook.