Show me the money

3/1/2017

The dollars and sense of high school sports in Iowa

Iowa high school athletics has grown into a multi-million dollar industry. Combined, the Iowa High School Athletic Association (IHSAA) and Iowa Girls High School Athletic Union (IGHSAU) take in more than $10 million per year.

The IHSAA, an organization that facilitates and supports boys’ high school sports, takes in more than $7 million annually. On the girls’ side, the IGHSAU brings in another $3.5 million.

In other words, it’s big money. And big money brings big questions. But one thing is crystal clear: High school athletics isn’t all fun and games.

Why do high school athletic associations exist?

The IHSAA and IGHSAU aren’t part of a government organization, but they do operate as non-profit entities, which is the same structure that most states use to conduct the operations of high school athletics. Both the boys’ and girls’ organizations consist of members that join on a voluntary basis. In the case of the IHSAA, membership fees are minimal.

Alan Beste, the IHSAA’s executive director, says the association’s primary function is to ensure that student participants have a positive experience.

“We’re known by most people for putting on tournaments,” he says. “But only a certain number of students are ever going to make it to those state tournaments.”

Beste says that whether an athlete makes the state tournament or not, he wants them to learn.

“One of our mottos is ‘Students now, citizens forever,’ ” he says. “So we’re really trying to make sure the lessons that kids learn by participating in athletics are lessons that they can take with them after they’ve left high school.”

Iowa is the only state in the union with separate high school athletic associations for its male and female sports. But it didn’t start out that way. The IHSAA was formed in 1904, according to Beste, to regulate the rules and regulations for high school athletics in the state.

Beste says the teams that competed in Iowa prior to the association’s formation often represented a local community as opposed to a school, and thus the teams frequently consisted of people who weren’t necessarily enrolled in the high school.

“It was a group of high school principals who met and decided there should be some kind of rules regarding eligibility of who could compete on a school team,” he says. “So the real point of the athletic association is to develop, promote, to direct and to regulate interscholastic athletics in the state of Iowa.”

He says that in the early 1900s, the IHSAA was originally a boys’ and girls’ athletic association. And while not many girls participated in high school sports, the fact that there were any at all meant that Iowa was ahead of the national curve in terms of high school athletics for girls.

That changed in the mid-1920s when, according to Beste, girls high school sports nearly came to a halt after a respected national source distributed data intimating vigorous physical activity wasn’t “physically or emotionally good” for young women. In light of this information, and given the context of the times, the athletic association chose to discontinue its services for girls’ athletics.

Beste says that many other states didn’t start programs for female athletics until the implementation of Title IX, a 1972 federal law that addresses

What happened to the state tournament broadcasts?

The boys’ association hasn’t been immune to its share of big questions, most notably when it licensed the television media rights for state tournament broadcasts to the Iowa High School Sports Network (IHSSN), drawing the ire of thousands of high school sports fans.

The deal was renewed in 2014 for 10 more years, running through 2024. That contract calls for $730,000 to be paid to the boys association over the 10 years, including $60,000 payments in the first two years and eventually rising to $80,000 a year in the latter years.

The IHSSN later made the decision to sell the rights for state tournament broadcasts to Comcast Sports Network in Chicago, after struggling to place the tournament with satisfactory stations elsewhere.

The problem? According to IHSSN’s website, viewers must be a cable or a satellite subscriber with CSN in the package in order to watch or live stream the events. CSN Chicago is available on DirecTV and Dish Network, but not on Mediacom, central Iowa’s largest cable provider.

Beste confirmed that Mediacom subscribers in central Iowa would not have access to the tournament broadcasts — at least not through Mediacom. Some critics say the boys’ games should be televised on Iowa Public Television (IPTV) similar to the girls’ championships, since 40 percent of the state’s viewers reportedly use Mediacom, and only 40 percent use dish services.

IPTV has an agreement with the IGHSAU to cover girls’ championship games in basketball, soccer, softball and volleyball, according to Susan Ramsey, the director of communications at Iowa Public Television, and 100 percent of the state will have access to view the events.

“We are a statewide network, and we are available free to anyone with a rabbit ear antenna,” she says, adding that IPTV is also available through Mediacom and dish services, and it also streams its live coverage for free on the Internet.

IPTV recently signed a three-year contract with the IGHSAU, replacing the one that expired at the close of the last school year. According to Ramsey, IPTV doesn’t pay for the licensing privileges, but it does have other expenses.

“We pay all of the costs of production, which is quite a bit. This is not an inexpensive endeavor, but we cover it all through underwriting,” she says. “We’re very thankful to our underwriters for helping make this possible.”

IPTV says its cash cost for broadcasting the four girls’ championships in 2016 (basketball, soccer, softball, volleyball) was $116,203.68, and that fundraising is done by The Friends of Iowa Public Television Foundation to help cover those costs.

So what is the broadcast solution?

Prior to 2006, IHSAA tournaments had, at times, been broadcast on Iowa Public Television, just as some of the IGHSAU’s contests currently are. However:

• The IHSAA State Basketball Championships have not been on IPTV.

• The IHSAA State Wrestling Championships have not been on IPTV since 2002.

• The IHSAA State Football Championships (all classes) have been on the IHSSN network for 12 years. Prior to that, the State Football Championships had not been shown in its entirety on television for 20 years. (Information provided by the IHSAA via www.ihssn.com/tv-coverage.html.)

The association needs money to operate. Beste notes that it is not a governmental institution and doesn’t receive state or Federal funding for the programs it runs, which he says is the national norm for athletic associations.

Charging dues to its 384 members is one way to raise money, and the IHSAA does. But according to Bud Legg, the director of information for the IHSAA, the dues are inexpensive.

“It costs $2 per school per year to be a member and to receive the benefits of being a member,” says Legg. “You may find that inexpensive, and it is. When the association was organized 112 years ago, the membership fee was $2 also.”

Beste says he doesn’t know of any Iowa high schools that aren’t members of the association.

Running the state tournaments is the organization’s primary revenue generator. Some of that revenue is garnered by selling the rights to its TV contract.

Beste says it’s the goal of IHSSN to put the events on local TV stations, but too often the stations pre-empt the high school sports for other programming, leaving viewers unable to view the events. He says it became apparent this year that many TV stations were not going to carry the events on their primary signal, relegating them to Dot 2 and Dot 3 channels, which many people do not have in their subscription packages. So the IHSSN looked for other options and made a change.

Beste says Mediacom subscribers won’t receive the tournament broadcasts, but there were coverage gaps previously when local stations didn’t pick up the broadcast, or when the contests were preempted on the day of the event.

“So the solution that we have now is what the High School Sports Network considered to be the best solution for today,” he said.

Who receives media access at the state tournaments?

The IHSAA also recently received criticism from various media outlets when it rolled out a series of changes to the policies regarding media access at the state tournaments.

Beste says he is aware of the complaints, especially from cameramen covering the state wrestling tournament.

Prior to this year, the media had access to seating on the floor at Wells Fargo Arena, but Beste says congestion was a concern.

“It’s always been crowded,” says Beste. “We’ve always looked for a way to open up the floor and make it more accessible for our wrestlers, coaches, cheerleaders and our working personnel, but we never really felt we had an option.”

Since then, he says, officials from Wells Fargo Arena, where the tournament is hosted, have had the opportunity to learn from the experiences of hosting the Division I collegiate wrestling championships and NCAA collegiate regional men’s basketball, and new ways to use the space and to manage the traffic flows have been implemented.

“We decided to make some changes,” he says. “Some media feel like they are being slighted, or that we don’t value their presence at the state tournament, when in reality we do. We’re just looking for a way to make it a better experience.”

He allows that some people might feel more limited, but he thinks others will feel the changes aren’t a limitation. He hopes they’ll see it as only something that is different.

“Our intent is not to limit anyone,” he says. “Our intent is to make it a better working environment for everyone.”

Iowa Hall of Pride loses $800,000?

According to its most recent and public tax filings, the IHSAA shows an annual shortfall of approximately $800,000 between its revenue and expenses in operating the Iowa Hall of Pride in downtown Des Moines. The IRS Form 990 for the year ending June 30, 2015, lists $851,693 in expenses and $32,536 in revenue. And the prior year’s tax form shows a similar gap.

But Beste and Sandra Anderson, the director of finance for the IHSAA, say those numbers don’t tell the entire story. The IHSAA manages a separate entity, The Iowa Hall of Pride Foundation, whose sole purpose is to provide financial assistance to the Iowa Hall of Pride. These funds aren’t listed on the IHSAA’s tax forms.

The Foundation’s IRS Form 990 for the fiscal year ending June 30, 2015, shows net revenue of $527,476, and Anderson says this money helps offset the $800,000 gap. But even with the additional funding from the Iowa Hall of Pride Foundation, a shortfall of nearly $300,000 exists.

“Honestly $200,000 to $300,000,” she says, regarding the shortfall between the Hall’s total revenue to expenses. “Depending on how effective we are in fundraising each year.”

Beste says the shortfall is made up by the IHSAA’s other programs that generate positive revenue.

“The direct income to the Hall of Pride sometimes looks a little skewed compared to the expenses,” he says. “But the thing we ask people to keep in mind is that it’s a program of the athletic association.”

Beste explains that some programs are revenue-generating, while others are not.

“State wrestling, for example, is a revenue-generating program,” he says. “And some (programs) like golf or tennis are non-revenue-generating and have a deficit.”

He says that some of the non-revenue-generating programs — like the Hall of Pride — serve to accomplish things that may not be represented in terms of dollars. For instance, the Hall of Pride offers special events, sponsorships, fundraising opportunities and other benefits.

“But at the end of the day, the Hall of Pride is a program of the Iowa High School Athletic Association, and it’s our responsibility to make sure that it’s successful like the rest of our programs are successful,” he said.

According to Beste, the Hall of Pride is a success, despite the loss of revenue, because its purpose wasn’t revenue generation. Instead, it was built to be an educational facility for the entire state of Iowa.

He says the boys’ sports are represented at the Hall, but there are also many others, including notable Iowans who are honored, and the facility also has information about health and wellness and agriculture. Historical information about the member schools is also there.

“It’s really meant to be an educational place for people to go and learn more about Iowa,” he says.

Even with the gaps in revenue versus expenses, Beste deems the Hall a success.

“Is it meeting what we hoped it would be?” he asks. “Absolutely it is. From a finance perspective, we’re always working on new innovative ways to help the Hall of Pride raise money, specifically for operations.”

Beste says the Hall pays Polk County $1 per year to occupy its space inside the Iowa Events Center.

Do the dollars make sense?

Many of Iowa’s elite high school athletes are putting their considerable talents on display this month in Des Moines. The state wrestling champions have already stepped onto the stand and taken home their medals, and the boys’ and girls’ basketball champs will soon hoist trophies of their own.

But there is more to these events than double leg takedowns, three-point buzzer-beaters and fierce competition. Behind the scenes are a multi-million-dollar associations involving TV contracts, ticket prices, executive salaries, budget shortfalls and revenue fundraising efforts. The business end of high school athletics is big, and it’s only getting bigger. And big dollars bring big questions — and, hopefully, some sense. ♦