September 30, 2008

Current Economy and Impact upon Volleyball

I know volleyball folks are rather intelligent and a question to prove it:

As I’m sitting watching the credit crisis and the DOW slipping over 500pts and pondering how deeply this will affect our country and our children. Clearly, sports are not my first concern however; it will be one of MANY areas affected in my opinion. This has to vastly affect the college programs as the private funding will begin to dramatically slow down. How will this potentially impact the college scholarships and sports programs in general (aside from the obvious football programs)? I imagine this will directly impact many National Club teams as many families will no longer be able to afford such a luxury. Does this mean that the ‘supply and demand’ of players will diminish and there fore the level of play will decrease? What are your thoughts on this topic? Stacy

The state of our economy sure has been a hot topic these last few months. Between crazy energy prices, the mortgage meltdown and more than a few banks verging on the economic edge, it has a number of folks a bit uneasy. Without getting into politics or high finance, I hope this is a short term stress upon us all and not a long term burden.

With regards to the potential impact upon volleyball, it will take time to see how it all shakes out. I am old enough to have been aware of and played/coached through other times of economic chaos - the 1987 stock market crash, the Internet stock bubble burst and 9/11. At the time, each of these examples were thought to be a huge negative for sports and funding.

Below are my thoughts as they relate to your various questions:

1. Private funding for college programs - It certainly won't help the total funding, but I feel the overall impact will be determined by where colleges are located. For instance, those individuals that are part of the energy industry or invested in energy stocks have been making boatloads of money and the prices of these commodities are holding (relative to a year ago). The oil and natural gas industry has a strong base in the mid south, so schools located in Texas, Oklahoma, Louisiana, Arkansas, etc., may be seeing an increase in their donations because those big boosters are making big bucks!

Folks which may donate a couple of hundred dollars a year is where I would expect the biggest negative impact to occur. These people will have higher cost of living realities to deal with and cutting donations is a common reaction. Additionally, those investors that have lost big time in the stock market (banking stocks, mortgage stocks, etc.) will not be too motivated to contribute immediately.

We also must keep in mind that the government has already come up with a mortgage bail out and will do the same with a bank bail out. This will reduce the risk for the big companies that may have overextended their portfolios and also protect those individuals that have larger deposits in various banks. These two actions make me think this economic panic will be short lived, and we must remember that as some lose money, others will surely make money. A school having one T. Boone Pickens will make up for losing a thousand you and me for fundraising.

My biggest concern is the long term stress upon the financial equation - Between the war/occupation/rebuild of Afghanistan-Iraq, the mortgage bail out and the bank bailout, there is literally hundreds upon hundreds of millions going out the door. These monies will have to paid for somehow and the usual way to do it is by financing debt - you finance debt with higher interest rates. I am not an economic expert, but I have not heard many folks excited about higher interest rates because it raises the cost of living for all of us. This could have a double whammy of making the running of a college program more expensive, while significantly shrinking the pool of small donors to athletic departments. Again, only time will tell.

2. How will it affect scholarships and sports programs? Well, football and the basketballs will not be impacted. Even if they take token cuts on their paper budget, they will be provided the first line of fund raised monies to draw upon. Now the ironic thing is that all the Olympic Sport coaches will be told that because the economy is so tight, it is important for Football and Basketball to stay funded because they can make money for the athletic department. Yes, they can make money, but studies have routinely shown that the "theys" of collegiate athletics are really very rare - it is the golden goose fairy tale of universities.

Scholarships won't be cut, this is a huge positive about Title IX and how it can protect female athletes. The men's sports won't cut scholarships, because of football, so the women's sports will be protected by equality. Now, funding for women's sports would be cut, but then again, the men's Olympic sports will also be cut. The biggest cuts would occur in non-league travel, recruiting and equipment - the three largest line items in any sport's budget. The mid-majors would only take bus trips for non-league and would need to cut the number of recruiting opportunities taken. Salaries would be frozen, unless you are a football or basketball coach, but not cut.

3. Club teams - Club Volleyball is viewed as absolutely necessary to high school players receiving scholarships, and because of this skewed view, I think the biggest impact will be a reduction in the number of tournaments attended. The parents won't pull children out of Club by and large, but rather will not support attending 3 National Qualifiers or one/two of the big early season tourneys. Just by skipping one NQ, a parent can save up to 1,000 dollars. Maybe in the long run this is a good thing because I feel Junior players are competing in too many matches right now - better to train more, play less but play better with improved focus and skill development.

4. Supply and Demand - The demand will stay constant for players because the number of scholarships and schools sponsoring the sport will remain constant. I can't see the supply of players being reduced because the sport is still popular and will continue to be played by high schools and clubs. Some could argue that players will not be as developed because playing opportunities will be reduced as illustrated above, but others (such as me) think it may work out well because players won't be burnt out or so ingrained with possible poor volleyball habits. With the increase in international student athletes in college volleyball, if coaches don't find what they are looking for in Kansas City, then they will go to Prague to find it.

Sports have always weathered bad times and have acted as an outlet. I agree that the current economic state is not good and won't help volleyball, but I don't believe it will be a huge impact. It may put many things in a freeze - salaries, travel and recruiting, the newest DVD underwater MP3 player for technique refinement - for college programs. With high school players, it will just reduce the number of tournaments for the majority of players and allow for some balance with the kid's life.

My concern would be for those players that have collegiate potential and could significantly benefit from the most basic Club Volleyball experience, but the state of the economy can't allow parents to fund this experience.