Hiding The Real Message

The news of the demise of the Lethbridge Pronghorns hockey programs is still a fresh wound for many who were involved in the program and at the Canada West hockey level. Questions were raised about how the University of Lethbridge could simply cut two of the most popular athletic programs at the school with no consultation or opportunities to save the programs, and I wrote a particularly scathing article about the decision. While I won't take any credit for today's news, it seems that the University of Lethbridge has had a change of heart regarding the hockey programs and has soften their stance with the announcement today that a committee is being formed to look into the feasibility of future Pronghorns hockey programs.

According to the above linked University of Lethbridge release today, the committee will be led by long-time Pronghorns hockey supporter Dan Laplante who had recently committed monies for the purpose of scholarships for students who were coming to the university to play hockey. I have a feeling today's committee announcement was spurred in large part by Laplante's support for the programs, and I believe he's the right man for the job when it comes to exploring all options for the hockey programs.

The paragraph that concerns me the most about today's release is that it seems that the University of Lethbridge has zero concept of how athletic departments at post-secondary institutions work. The paragraph reads,

The U of L has undertaken past reviews of Pronghorn Athletics, focusing on program sustainability. The 2015 (and again in 2019) review of Pronghorn Athletics identified significant concerns about the sustainability of the institution's athletic programs. In an effort to stabilize the funding situation in 2015 and allow time to source external revenues, the University committed an additional $400,000 per year for three years and $350,000 in the fourth year (for a total investment of $1.55 million). Unfortunately, over that time, support for operations has not materialized.

This is concerning because the university isn't talking about "sustainability" or "feasibility" in this paragraph; rather, this is a statement about profitability. The university is still harping on the fact that it sunk $1.55 million into the hockey programs without looking at all the positives that came from that investment. As a school, they are recruiting STUDENT-athletes - emphasis on the student part - who will either contribute significantly at the campus level, at the community level, or both if the university is recruiting high-quality people. The university is an educational institution that offers athletic programs, not the other way around.

We'll start with some very important definitions you need to keep in mind when reading through this article and the statement released by the University of Lethbridge. They are:

• Profitability: the state of yielding profit or financial gain.
• Sustainability: the ability to be maintained at a certain rate or level.
• Feasibility: the state or degree of being easily or conveniently done.

It seems that, by definition, the programs were always feasible since they already existed up to a week ago. Sustainability and profitability are terms used when looking at revenue generation when compared to expenses, and this seems to be the goal that the university is seeking - make more money to either eliminate the needed subsidies or reduce them as much as possible. This is why a "feasibility committee" is a joke - the programs already existed!

It needs to be stated that this "sustainability" idealism that the university is seeking is nothing more than a pipe dream. In 2013, a USA TODAY Sports analysis found that "23 of 228 athletics departments at NCAA Division I public schools generated enough money on their own to cover their expenses in 2012. Of that group, 16 also received some type of subsidy — and 10 of those 16 athletics departments received more subsidy money in 2012 than they did in 2011."

Think about that percentage - 10.1% - when considering the amount of money that NCAA sports generates on an annual basis. Only one of every ten schools with athletics programs in the NCAA generated enough money to cover their expenses, and most large schools with notable sports programs are not covering their expenses even with subsidies from the schools or different levels of the government. As the study states, "Rutgers, for instance, spent $28 million more than it generated — a deficit it covered with about $18.5 million from the school and $9.5 million in student fees" - the athletics program was subsidized by funds that came from sources not recognized as contributions or revenue specifically generated by the athletics department.

In other words, the University of Lethbridge subsidized the Pronghorns hockey programs to the tune of $1.55 million over four years which would make them similar to virtually every other institution across Canada and the US outside 23 institutions. And that's where the paragraph I isolated is concerning - the school is looking for profitability from its hockey programs, not sustainability or feasiblity.

In clarifying the feasibility, sustainability, and profitability terms, today's announcement sounds like the university is passing the buck to the community when it comes to reviving Pronghorns hockey as per University of Lethbridge President Michael J. Mahon's comments in the release today.

"The resolve of many people I have talked with is strong," Mahon stated. "Recognizing this, the University will explore with the community the possibility of hockey programs returning to the University in the coming years — supported by a community-based funding model."

Did you feel that, Lethbridge? That was Mahon sticking it to the entire Lethbridge community in a big way. What he basically said was that if the community doesn't come through with major contributions to the hockey program's revenue lines, the university will claim the hockey programs are unsustainable based on the lack of profitability and, therefore, are unfeasible. He's essentially giving everyone false hope for the return of the hockey programs unless it's privately- or publicly-funded so that the university isn't responsible in any way for subsidizing losses sustained by the programs.

This is a cop out, folks. It's Michael Mahon and the University of Lethbridge putting the responsibility of having Lethbridge Pronghorns hockey entirely on the shoulders of the community of Lethbridge. The catch is that if the programs were to return, the University of Lethbridge would gladly accept any positives that are generated by the programs playing under their watch since they bear no responsibility for the costs nor are they assuming any risk if the programs struggle. If the programs return under a community-supported basis and struggle to generate the revenue necessary, the response from the university will be "we told you so" regarding the feasibility despite this being a revenue-generation problem that we already know exists at almost every athletics department across North America when subsidies are removed.

In giving this some thought, I went back to the provincial government's refusal to implement a sales tax. That money could help immensely in subsidizing the hockey programs, so why couldn't it be implemented on a micro-economical level in the city of Lethbridge as a 1% tax to help save Pronghorns hockey? The additional public support would still be a subsidy, but the money would go directly into funding Pronghorns hockey for the foreseeable future. That would fix the problem, right?

And then it dawned on me that it wouldn't. Kristi Dosh wrote an article for Forbes back in 2017 that laid out common misconceptions about the finances of college sports. In that article, she identified the fifth misconception as "Donations to athletics stay in athletics". That section reads,

At nearly one-third of the schools I polled back in 2012 for my book, the university took a specified percentage of each donation made to the athletic department.

Some indicated it was to cover university overhead, or because of partnerships and shared resources between the university and athletics development offices, but the fact remains that the amount you see on the reports submitted the NCAA may be anywhere from 2-12% less than the amount donated, as the reported number reflected the donation after the assessment in the situations I researched for my book.

Having studied the University of Lethbridge's financial statements from 2019 for the article I wrote last week about the demise of the hockey programs, I can tell you that there are no specific lines of accounting for athletics or the athletics department whatsoever. If Pronghorns Athletics receives a contribution from a donor, there's no guarantee it goes to the sport or the athletics department if there are no conditions attached to the contribution. Sponsorship revenue gets treated the same way - it all goes into the University of Lethbridge's general revenue line which the university can then use for whatever purpose it deems necessary. And as Miss Dosh illustrated, the universities in her poll were already skimming off the top for all donations as it was, so the athletics departments for those schools weren't getting the full donation amount they were promised. Based on how the University of Lethbridge feeds all revenue into one university-controlled revenue stream, should we expect anything different here?

What we're seeing here is the university washing its hands of any financial responsibility for two hockey programs that cost it money just like every other university with a hockey program. Instead, the unversity is telling donors, alumni, and sponsors to start contributing more money to the programs if they hope to see Lethbridge Pronghorns hockey ever again.

By shutting down hockey as they have, though, the university bought the committee a two-year feasibility study since they cannot re-apply for U SPORTS status for two calendar years. Yes, it's entirely irresponsible when you consider that 52 students, all the coaches, and all the staff are now left wondering what's next, but has the university ever acted responsibly if this is the moment they picked for a feasibility study?

If hockey is to continue at the U SPORTS level for the University of Lethbridge, this committee is going to have its work cut out for them because they cannot allow the University of Lethbridge to call the shots with regards to revenue generated by the hockey programs specifically for the hockey programs going forward. Basically, the publicly-funded institution is asking the citizens of Lethbridge to find enough money within the community to fund two hockey teams that the university will ultimately control of since they're administering the program. And they failed woefully at that task before, so why should they be trusted now?

If the community is going have a gun pointed at its head by the university when it comes to subsidizing the hockey programs specifically, the teams are no longer university teams. If the university doesn't have some sort of tangible subsidy going to the hockey programs - a stake in the game, so to speak - should they be able to reap any rewards, recognition, or benefits from the hockey programs? We already know that the university feels that the programs are unsustainable based on the amount of money they were contributing, so we know that the university feels the hockey programs are not feasible already.

If that's the case, why are we going through this feasibility exercise if the university has nothing to lose since they have made it clear they're not interested in funding the hockey programs?

If I seem cynical, I am. While I'm hopeful this committee finds all sorts of ways to revive the programs and take them to new heights, it seems that the institution who has the most to gain is asking for a no-risk guarantee. That's not how the world works. There is no reward without some risk, and the University of Lethbridge should not be allowed off the hook when it comes to subsidizing a portion of the costs in running hockey programs that has their logo on them if the committee determines that Pronghorns hockey is not only feasible, but can be sustainable as well.

You have to spend money to make money. You don't just get to take.

Until next time, keep your sticks on the ice!