Pac 12 vs Grand Canyon – The For-Profit Controversy

The Grand Canyon University Antelopes begin their transition to full Division I membership this season, as they will become a member of the “new look” WAC.  Grand Canyon has one unique feature to its school that is not, on paper at least, possessed by any other Division I school.  Grand Canyon is a “for profit” university.  This means the school sells its shares and seek investors, and in theory would pay dividends based on its yearly earnings.  As a for profit entity, Grand Canyon does not received the same tax-exempt status that every other Division I school has.

It has been reported that other Division I schools are not very keen on a for profit university joining Division I.’s Dennis Dodd reported that the Pac-12 is in the process of filing a formal protest of their admission and is urging its member school not to schedule any games against Grand Canyon in any sports.  Quite frankly, in my opinion, this is one of the most ridiculous and hypocritical things I have ever heard of.

Like it or not, we live in an era where college sports is being driven by one major guiding force.  That force, of course, is the almighty dollar.  Conferences are signing television deals and creating their own networks in order to bring millions if not billions of dollars into their universities.  The dollars being paid out by cable and satellite providers to carry more and more collegiate sports is getting practically insane, and that money is filtering through to the universities.  ESPN has about 500 channels, FOX with the introduction this year of their new Fox Sports networks is not far behind, NBC and CBS have their own sports channels, and then we have the individual conference networks, such as the Big Ten Network, Pac 12 Network, and in 2014 the SEC Network.  And that doesn’t even bring up Texas’ Longhorn Network.

These Division I schools are receiving millions of dollar each year, but claim they are non-profit entities.  They pour the money into supporting their non-revenue earning sports like water polo and badminton and curling or whatever else they offer.  They pour money from athletics, in theory, back into their schools to go towards research and financial aid and all those other lofty goals.  And what else do they do with the money?  Oh yeah, they solicit “boosters” to give the school more money–and then reward these people with the best seats at the games or fancy dinners with the school president or the like.  And by the way, each school’s regents/directors certainly checks the bottom line each year to make sure that enough revenue is coming in from the sports that earn money in order to balance the books.

Grand Canyon, as an alternative way of doing business, has decided to solicit “investors” (boosters?) and is attempting to make enough money to support its athletic programs, research, and financial aid.  It gives dividends (rewards) to its investors in exchange for the money they invest in it.  Its university officials review the bottom line each year to make sure the school is not losing money.  In other words, it runs the exact same way that every other school in the country runs, it just uses different terms!

Actually, that is not quite true.  Grand Canyon does do one major thing that the rest of Division I does not do.  It pays taxes.  It’s revenues not only pay for seats with cup holders and built in massagers for its biggest “investors,” but they also go to help pay for all those government funded programs, like..oh..say..disaster relief for victims of Hurricane Sandy.

If the Pac-12 wants to keep Grand Canyon out of Division I, it should first take a good hard look at itself in the mirror.  Grand Canyon is making money the American way, building a profitable business and paying taxes on its profits.  The Pac-12 and the rest of Division I are making money as well — they are just exploiting the system, avoiding taxes, and even accepting tax dollars from the government — tax dollars paid by Grand Canyon, by you, and by me.

And now I’m going to see my stockbroker about buying a few shares of the Antelopes.

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