Wednesday, January 25, 2012

Does Herky Have a Gambling Problem?

January 25, 2012, 8:30 a.m.

NCAA vs. Hawkeyes

Both the Press-Citizen and Gazette (and possibly Daily Iowan to come) have stories about Iowa Athletic Director Gary Barta's meeting with faculty leaders yesterday. The differences in the stories are striking.

The Press-Citizen's story, buried in small print at the bottom of page 3 leads with the report that Barta "defended the departments hiring practices and coaches' salaries" (the exclusive subject matter of the entire story). Emily Schettler, "Barta Defends Coaches' Salaries and Iowa's Hiring Practices," Iowa City Press-Citizen, January 25, 2012, p. 3.

The Gazette, by contrast, in heavy type at the top of the page, leads with "Barta on Tuesday [Jan. 24] told faculty leaders he is comfortable with the department's renewed relationship with the Iowa Lottery" (the exclusive subject matter of the Gazette's entire story). Diane Heldt, "Barta: I'm Comfortable with Lottery Relationship," The Gazette, January 25, 2012, p. 11A.

I guess you had to be there. (Which is probably the case of anyone's report of any event.)

Barta says he's "comfortable" with the Iowa Lottery "because it's a state-sponsored agency." Is that relevant? Should it be? During my first judicial clerkship (U.S. Court of Appeals, 5th Circuit) a significant part of our caseload involved what was then called "the numbers racket," often Mafia-run, it was considered a serious crime. So, OK, now the state has taken it over. Does that make it, for NCAA student-athlete purposes, not gambling? I don't think so.

But what really caught my eye in Ms. Heldt's report was, "Barta said any relationships the department has with the gambling industry are limited to the Iowa Lottery . . .." [Photo of Kinnick scoreboard.]

Why did that catch my eye? Because the last time I checked (so it may have changed), the Kinnick scoreboard was still running an advertisement for the Riverside gambling casino, and the casino still had a Kinnick skybox for its high rollers.

And my memory, and a prior blog entry, indicate that the NCAA at one time put the Iowa athletic program on notice that it did not look favorably on these gambling industry associations, in light of the concerns and spirit of Article 10.3. ("The NCAA wants to distance itself from sports gambling, and the gambling industry generally, in every way possible. It expressly forbids association with gambling casinos at NCAA events or in its advertising. It highly recommends that NCAA schools follow the same practice. It has written the UI athletic program with regard to its partnership with the Riverside Gambling Casino. And yet our football program tries to rationalize the gambling partnership while refusing to do anything about it."
"Conflicts, Cover-ups and Corruption," June 26, 2007.)

I very seldom reprint a former blog entry. But since this one is so on point, and since it's over five years old (and therefore long forgotten if ever remembered), I now do so:

"UI Football Promoting Gambling?" September 16, 2006

Is the University of Iowa Athletic Department, specifically the football program, promoting gambling?

There is very little ambiguity regarding the NCAA's rules regarding gambling on college sports. The NCAA Division I Manual provides [Note Jan. 25, 2012: What's below is the relevant Article 10.3 in 2006; the current, 2007 version, has been only slightly modified from this one.]:


Staff members of a member conference, staff members of the athletics department of a member institution and student-athletes shall not knowingly: (Revised: 4/22/98 effective 8/1/98)

( a ) Provide information to individuals involved in organized gambling activities concerning intercollegiate athletics competition;
( b ) Solicit a bet on any intercollegiate team;
( c ) Accept a bet on any team representing the institution;
( d ) Solicit or accept a bet on any intercollegiate competition for any item (e.g., cash, shirt, dinner) that has tangible value; or (Revised: 9/15/97)
( e ) Participate in any gambling activity that involves intercollegiate athletics or professional athletics, through a bookmaker, a parlay card or any other method employed by organized gambling. (Revised: 1/9/96, 1/14/97 effective 8/1/97)

NCAA Division I Manual, Bylaw Article 10, Ethical Conduct, 10.3 (2001-02).


It couldn't be much clearer, could it? Academic institutions are able to claim that they want to maintain an impenetrable wall between their athletic programs, staff and student athletes, on the one hand, and the temptations of sports gambling on the other.

Of course, these standards do not address, nor could they, gambling on sports by those unaffiliated with a university. (And I am not claiming that the Universty's getting in bed with gambling interests, and taking the gambling industry's money, is "the same as" coaches and athletes betting on games.)

But it does seem a bit incongruous for the University's athletic program to enter into what amounts to a partnership with the gambling industry. How has it done that?

The University has (1) sold special indoor box facilities in the football stadium to a local gambling casino, aware that the casino purchased the facility to entertain, and encourage, high rollers, (2) knowing that the casino plans to bring gamblers into the state, put them up at its hotel, transport them to and from the football games, and (3) then agreed to let the casino use the football program's oversized electronic scoreboard to advertise the gambling casino to the 70,000 plus sports fans in attendance! (4) Removing any possible ambiguity about this, the Casino Web site's opening page currently displays, "Turn a Hawkeye game day into a weekend getaway!"

See William Petroski, "E. Iowa Casino to Lure U of I Fans; It will offer post-game parties, stadium shuttles," Des Moines Register, August 29, 2006 ("The casino has spent $165,000 for a three-year deal to lease a new skybox at Kinnick Stadium, and the casino has purchased dozens of football tickets for its preferred customers. Starting with the Iowa-Iowa State game on Sept. 16, charter buses will be offered to transport patrons between the casino parking lot and Kinnick Stadium, and there will be post-game parties at the Riverside complex."), and William Petroski, "Kinnick ‘Hotel’ ad omits 'Casino;' By design, an ad for Riverside's complex does not mention gambling," Des Moines Register, September 8, 2006 ("Chief Executive Officer Dan Kehl pointed out in a recent interview that . . . many students already gamble online.").

The duplicity is stunning. Apparently the University, recognizing the impropriety of what it was doing, but wanting the money from the gambling industry advertising anyway, decided everything would be OK if only it would falsely represent that no gambling actually takes place in a gambling casino by changing the name on its scoreboard from the gambling casino's real name -- the "Riverside Casino & Golf Resort" -- to that of a non-existant facility called the "Riverside Hotel & Golf Resort."

While I suspect that few of the 70,000 fans were led to believe that the Casino had truly decided to abandon gambling income for total dependence on its hotel business, there may well have been a few who found the name switch a little bizarre and baffling.

Not only does a university's promoting gambling to the young students in its charge violate basic principles of common sense and decency, it also violates the spirit of the law (which forbids anyone under the age of 21 to enter a gambling casino), and the spirit of the NCAA rules.

(Another incongruity is that while the University forbids consumption of alcohol in the stadium and some tailgating areas, a special dispensation to drink is granted to the Casino's stadium gamblers, as well as the guests of other purchasers of the $50,000-plus-a-year indoor skyboxes. There's no telling what lesson that provides the students in the stands and the athletes on the field.)

The University is certainly in no position to feign ignorance and innocence. As early as May 2006 the campus paper reported,

"[Riverside Casino Manager Joe] Massa has hired a sales manager to lure groups and conventions to the casino, and he plans to hire a sales staff in Chicago and Des Moines. A package could include a hotel stay with a trip to Kinnick Stadium for tailgating and box seats at an Iowa football game. Kehl says he wants to organize junkets to the casino, where out-of-state gamblers would be flown into the Eastern Iowa Airport."

Elaine Watkins-Miller, "If they build it, will they come?," Master's Media Project/Riverside Project, The Daily Iowan, May 5, 2006.

What has the University had to say about all of this?

"University of Iowa athletic director Gary Barta said Tuesday that the university would not place restrictions on a Riverside casino that has rented a Kinnick Stadium skybox with plans to bring big gamblers to Hawkeye football games.

“'We have never placed any restrictions on a company which owns tickets, how they use them secondarily,' Barta said. 'Once they are sold to a company, it is that individual’s or that company’s discretion how they use them.'

"The new $140 million casino at Riverside is placing a special marketing emphasis on Hawkeye football games. The casino, located 12 miles south of Iowa City, has spent $165,000 for a three-year lease on a skybox at Kinnick Stadium. The casino has also purchased dozens of Hawkeye football tickets for its preferred guests.

"Iowa has 19 casinos, but the opening of the Riverside complex Thursday at 9 p.m. marks the first time a casino has been so close to one of Iowa’s three state universities.

"Barta said the National Collegiate Athletic Association and the U of I are 'very concerned about possible ill effects as they relate to gambling and intercollegiate athletics.'

"He added, 'On the other hand, the various casinos in this state, they are legal businesses. So you walk that fine line between your concern about gambling and its association with intercollegiate athletics and what you know has been understood as a legal entity in this state.'"

Randy Peterson, "High-Level, High-Dollar, High Ol' Times," Des Moines Register, August 30, 2006 ("Casino's Football Skybox is OK With U of I").

The Hawkeyes won the game today, and a good one it was. And they've made a lot of money from the gambling industry.

But in the process they've certainly fallen far from the educational and moral high ground to which they profess to aspire.

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Saturday, January 21, 2012

Peak Oil, Peak Football

January 21, 2012, 10:00 a.m.

$80,000 for the Seat; $3750/Year to Sit In It

"San Francisco 49ers fans, how much would you pay to own a seat on the 50-yard line at the team's sparkling new stadium in Santa Clara? Try $80,000. And if you're looking for single tickets and want primo seats, you'll have to pay almost triple what it costs for a comparable view of the football action at Candlestick Park." Mike Rosenberg, "Club tickets won't come cheap at Santa Clara 49ers stadium," San Jose Mercury News," January 10, 2012. [Photo credit: NFL.] "This is what $1 billion looks like."

Of course, just because you own the seat doesn't mean you can actually sit in it and watch the 49ers play football. No, for that you'll need a $3750 season ticket. And if you want to take someone with you you'll need two seats and two season tickets.

We're not talking skyboxes here. Just a seat, out in the open, braving the elements. Before those tickets even went on sale a wealthier class of fans had already purchased $225 million worth of "luxury suites." No, we're just talking ordinary ticket holders, couples who think three hours or so watching football well worth the $750 for their tickets.

From "The Goose That Laid the Golden Eggs" ("Killing The Goose That Laid the Golden Eggs is among the best known of Aesop's Fables [and] has become idiomatic of an unprofitable action motivated by greed") to the "housing bubble" ("an economic bubble affecting . . . over half of American states. Housing prices peaked in early 2006 . . . and may not yet [2011] have hit bottom . . ..") there comes a time when things peak and begin their decline.

In fact, not that far from Santa Clara are those who remember Silicon Valley's "dot-com bubble" of the late 1990s ("A combination of rapidly increasing stock prices, market confidence that the companies would turn future profits, individual speculation in stocks, and widely available venture capital created an environment in which many investors were willing to overlook traditional metrics such as P/E ratio in favor of confidence in technological advancements").

One of the most serious "peak" phenomena is the prospect of declining oil supply (at prices the market can bear), known as "peak oil." Nick A. Owen, Oliver R. Inderwildi, David A. King, "The Status of Conventional World Oil Reserves--Hype or Cause for Concern?" Energy Policy, vol. 38, August 2010, pp. 4743-49 ("While there is certainly vast amounts of fossil fuel resources left in the gound, the volume of oil that can be commercially exploited at prices the global economy has become accustomed to is limited and will soon decline. The result is that oil may soon shift from a demand-led market to a supply constrained market."), and the more general essay, "Peak Oil," ("Peak oil is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline.")

Is it possible that we could be reaching "peak football"?

The NFL's first TV contract paid the League $4.65 million in 1962. By 2010 the clubs earned over $20 billion -- 4000 times as much. Major college sports now gross $5.6 billion (over half from football), and the Iowa Hawkeyes' football coach, at $4 million give or take, is the state's highest paid "employee." Weiler, Roberts, Abrams & Ross, Sports and the Law (4th ed. 2011), pp. 434, 746.

Meanwhile, the injuries become more serious (see, Ken Belson, " For N.F.L., Concussion Suits May Be Test for Sport Itself," New York Times, December 30, 2011, p. A1; "Players still willing to hide head Injuries," Associated Press, December 26, 2011), and the criticism mounts. See, e.g., Branch, "The Shame of College Sports," The Atlantic, Oct. 2011; Nocera, "Let’s Start Paying College Athletes," New York Times Magazine, Jan. 1, 2012; National College Players Association, "Football Coaches' Salaries vs. Scholarship Shortfall (BCS Colleges)" [undated].

Taxpayers are becoming increasingly reluctant to underwrite the cost of billion-dollar stadiums they cannot afford to enter, just to increase the profits of the billionaires who own the teams, and the millionaires who play the game. (This one will require the city's taxpayers to take out an $850 million loan to cover most of the construction costs.) Lisa Fernandez, "Santa Clara: Group says it has enough signatures to force vote on 49ers stadium loan," San Jose Mercury News, January 18, 2012.

With the NFL playoffs coming tomorrow, this may not be the best of times to raise the issue, and peak football may be a decade or more away. But everything seems to have its "peak," and it's unlikely football will be the last exception left standing.

That's the bad news.

The good news is that, unless we start building a lot more rapid rail than is likely, we wouldn't have been able to find the gas to drive to those stadiums anyway -- even if we could afford to pay the tariff to sit in our $80,000 seats.

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Every once in awhile, after I've written and posted a blog essay with what is for me an original idea (that is, though others have undoubtedly thought it, I am unaware that they have), along comes someone who makes me think I may not be nuts after all. Here's yet another example:

"Football is dead in America. . . . [I]t's not the lawyers who are the death of football. Blaming lawyers misses the point. Like their counterparts in nature, lawyers are merely the cleanup crew. What finishes football are the parents of future football players. The NFL desperately needs American parents. Not as fans, but as suppliers of young flesh. The NFL needs parents to send their little boys into the football feeder system. And without that supply of meat for the NFL grinder — first youth teams, then high school and college — there can be no professional football. And yet every day, more American parents decide they're finished with football. Why? Because parents can no longer avoid the fact that football scrambles the human brain. In cultural terms, parents who send their 10-year-olds to play football might as well hold up signs saying they'd like to give their children cigarettes and whiskey." John Kass, "American Football Industry is on its Deathbed; As the dangers of football become more well-known, parents are less likely to allow their children to take part in the high-impact sport," Chicago Tribune, April 24, 2013.

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Wednesday, January 18, 2012

The Best Government Money Can Buy

January 18, 2012, 5:00 a.m.; added item January 22.

Connecting the Dots
Everybody knows that the dice are loaded
Everybody rolls with their fingers crossed
Everybody knows that the war is over
Everybody knows the good guys lost
Everybody knows the fight was fixed
The poor stay poor, the rich get rich
That's how it goes
Everybody knows
-- Leonard Cohen, "Everybody Knows"

"Everybody knows."

Everybody knows our political process, and thus ultimately our government, is corrupted with the influence of money. (See, "More Support for Going Communist Than Congress," November 16, 2011.) Sometimes it's illegal bribery. More often it's perfectly legal "campaign contributions." As I've often said, "The problem is not so much that corporations violate the law. It's that they write the law."

There's no little pill we can take to solve this problem. Even if there were, Big Pharma would patent it and then raise the price beyond the ability of any but the top 1% to pay for it. And those folks would have no reason to take it. They are not suffering from this political disease; they're profiting from it.

What we can do, by way of baby steps toward a solution, is to publicize the data that will enable the media and the people to connect the dots. We need to see, not just that politicians get money from special interests, not just that government largess tends to be squandered on those least in need of it. We need to see the unmistakable direct connection between the contributions and the return on that "investment."

Fifteen years ago I wrote a column in the Des Moines Register making this connection. A little research disclosed the "rate of return" on political "contributions." It turned out to be 1000 to one. That is, those who gave $1 million (say, in soft money for a political party's national convention) could expect to receive $1 billion in return. This online reproduction of that column actually provides the footnotes of verification: Nicholas Johnson, "Campaigns: You Pay $4 or $4000," Des Moines Register, July 21, 1996, p. C2. (The "$4 or $4000" reference was the contrast between what citizens would pay for public financing of campaigns ($4 each) compared with the additional amounts we have to pay as consumers and taxpayers when they are funded by corporations and the wealthy ($4000).)

In years past, this blog would occasionally give a "Hat's Off" award for outstanding journalism. Two years ago the Register and Clark Kauffman were awarded one for an investigative report of nursing home "contributions." Clark Kauffman: Clark Kauffman, "Nursing home groups donate to lawmakers," Des Moines Register, November 16, 2008, and Clark Kauffman, Industry Courts Legislators," Des Moines Register, November 16, 2008. Nicholas Johnson, "Hats Off" to Register for Money in Politics Expose; Register Wins "Hats Off" Award for Expose: Tawdry Impact of Campaign Contributions on Iowa's Nursing Home Public Policy," November 17, 2008.

Clark Kauffman remains on the case. But sadly, things seem not to have improved over the past four years according to the January 22 Des Moines Register: Clark Kauffman, "Lobbyists, Not Public, Met Panel; The Governor's Office Had Refused to Say Who Came to the Meetings About Sex Offenders in Nursing Homes," Des Moines Register, January 22, 2012, p. B1.

Earlier that year this blog commented, "Unfortunately, . . . investigative reporting of money in Iowa politics and governing is all too rare. Occasionally there will be stories regarding which legislators have raised how much money. There may even be a reference to where some of that money came from. Very rarely is there an effort to investigate the extent to which there is a relationship between the sources of campaign funds and the votes of the recipients -- let alone a routine reporting of these relationships for every single member of the Iowa legislature." Nicholas Johnson, "Golden Rules & Revolutions: A Series, Part VIII: Money and Lobbyists in Iowa: Smoke and Mirrors," April 19, 2008.

Last Sunday [Jan. 15] the Register did it again: Lee Rood, "Most tax incentives awarded to wealthy companies; More than $809 million in Iowa tax breaks went to 50 companies in seven years," Des Moines Register, January 15, 2012, p. A1 ("State leaders gave the lion’s share of Iowa’s economic development tax breaks from 2003 to 2010 to some of the most profitable businesses in the country, awarding 50 companies more than $809 million in seven years.")

This was an extraordinary bit of research and reporting, certainly warranting another "Hat's Off" for the Register and, in this instance, Lee Rood.

But while the nursing home story concentrated on receipt of campaign contributions, Rood's story concentrates on the distribution of taxpayers' money to the wealthy.

We have still not connected the dots. We need to know not only how much legislators receive in "contributions" (and from whom), we need to know not only how much they give away (and to whom). We need to know the relationship between what each individual legislator (or member of Congress) received from a given special interest (or its lobbyists) and how that individual legislator voted on the subsequent largess to that contributor.

By Monday [Jan. 16] we finally had an example of what I've been calling for. The New York Times focused on former Senator Rick Santorum, now a candidate for president in the Republican primaries. Michael Luo and Mike McIntire, "Donors Gave as Santorum Won Earmarks," New York Times, January 16, 2012, p. A1.

As Luo and McIntire report, "The announcements flowed out of Rick Santorum’s Senate office: a $3.5 million federal grant to Piasecki Aircraft to help it test a new helicopter propeller technology; another $3.5 million to JLG Industries to bolster its bid to build all-terrain forklifts for the military; $1.4 million to Medico Industries to upgrade equipment for its munitions work. . . . A review of some of his earmarks, viewed alongside his political donations, suggests that the river of federal money Mr. Santorum helped direct to Pennsylvania paid off handsomely in the form of campaign cash."

That's what I mean.

It's hard work connecting those dots. Those who have such information are reluctant to share it. But our democracy demands no less -- from the media, the academic and research communities, the government, indeed all of us.

As my favorite school superintendent's wall sign had it: "In God we trust; all others must bring data" (attributed to W. Edwards Deming).

In short, it's not enough that "everybody knows."

Without data, without connecting the dots, what everybody knows is unlikely to ever become what everybody does.

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