This is the time of year where America celebrates college basketball as a spectacle, and more and more, as a business. In 2010, the NCAA struck a 14-year, $10.8 billion deal with CBS and Turner Broadcasting System for the rights to the tournament. Part of that money eventually devolves down to the teams, some of which have become truly enormous profit generators. At The Atlantic, we wondered what this year's bracket would look like if, instead of their on-the-court play, teams won and lost based on their most recent balance sheets. Using data from the Department of Education, we calculated which teams earned the biggest profits during the 2010-2011 fiscal year, then set them up against each other.
The Final Four: Louisville, Duke Ohio State, and the University of North Carolina. Your national champion: Louisville. By a longshot. (Click the bracket below for a full-size version.)
The government's numbers have one major flaw for our purposes. Colleges can hide the true cost of running a money-losing team with some fancy accounting -- essentially by covering up their losses with dollars from the school's general fund. As a result, many teams appear to finish the year breaking exactly even, despite the fact that they're actually in the red. On the bracket, I've marked those programs as having "unknown losses."*
But while the data won't tell you much about most of the money losers, it will tell you a lot about the money makers. Louisville has been college basketball's earnings leader three years running, raking in a monstrous $40.89 million in revenue in FY 2010-2011, and $27.55 million in profit. Second place Duke made a total of $28.91 million in revenue, netting $15.1 million.
College basketball teams earn income off three main things -- ticket sales, donations, and distributions from the NCAA itself, says Transylvania University Professor Daniel Fulks, who analyzes university athletic department finances on behalf of the NCAA. The ticket sales are the most straight-forward part of the equation. Large schools with large stadiums that can pack a crowd have an obvious built-in advantage. Unsurprisingly, four of the five highest revenue generating teams in this year's tournament -- Louisville, UNC, Syracuse, and Kentucky -- also led the NCAA in average per-game attendance.
But a successful team can get by without massive attendance. Duke, with its relatively modest 9,300 seat stadium, is the second most formidable revenue earner in the tournament. They do it with donations from alumni and boosters. Before Blue Devils fans are allowed to buy season tickets at Cameron Indoor Stadium, they're required to make a sizable donations. According to Duke Senior Associate Athletic Director Mike Cragg, the two worst seats in the house require an $8,000 dollar gift on top of the ticket price. Fans give all the way to up to the cost of a year-long scholarship, roughly $55,000. Many other universities have adopted similar practices.
Finally, there are the funds the NCAA distributes to conferences based on their performance in the national championship tournament. Conferences earn money based on the number of games their teams have played in the big dance during the past six years. The more games, the more the conference earns. Last year, the NCAA doled out about $180 million this way. It's up to each conferences to split up its haul between its teams.
Combined, those three categories make up three quarters of most basketball teams' revenue, Fulks says. Now consider Louisville. The Cardinals play in the brand new, 22,000 seat YUM Center, where prospective season ticket buyers are essentially required to make donations before they can claim a seat. According to Forbes, the team received more than $20 million in total contributions last year. It also plays in the Big East, which received the single biggest portion of last year's NCAA tournament bounty.
Wealthy teams, like Louisville, only stand to get richer. In the last few years, the top athletic conferences have signed lucrative television deals for football and basketball worth many millions of dollars to each of their member schools.
But just like in any other game, earning a nice financial return won't necessarily earn a college basketball team points on the court. Arizona is sitting out March Madness, even though it was the third most profitable school in Division I-A last year, with more than $14 million in net income. Other big spending, big-earnings schools such as the Universities of Illinois and Minnesota* will also be watching from home. On the other hand, Mississippi Valley State, which operated at a loss despite a shoestring budget of $682,000, got a shot at the tournament.
Thankfully, in real life, the big money doesn't always win.
*A note about the bracket: In matchups between teams with two unknown financial losses, I gave points for thriftiness and advanced the squad with lower expenses. When a program with an unknown loss played one with a known loss, I gave points for honesty and advanced the team with the known loss.
*An earlier version of this piece mistakenly stated that Wisconsin had not made the tournament (despite having them on my bracket). Having spent time working in the badger state, I realize that residents there rightly get frustrated about being mixed up with their next door neighbor. My sincere apologies.
After more than a year of rumors and speculation, Bruce Jenner publicly came out as transgender with four simple words: “I am a woman.”
“My brain is much more female than male,” he explained to Diane Sawyer, who conducted a primetime interview with Jenner on ABC Friday night. (Jenner indicated he prefers to be addressed with male pronouns at this time.) During the two-hour program, Jenner discussed his personal struggle with gender dysphoria and personal identity, how it shaped his past and current relationships and marriages, and how he finally told his family about his true gender identity.
The show went to impressive lengths to explain unfamiliar concepts of gender and sexuality to its audience, although it didn't always go smoothly. Sawyer’s questions occasionally came off as awkward and tone-deaf, mirroring a broader lack of understanding by many Americans about the difficulties that trans people face. But Sawyer’s empathy also shone when explaining concepts like gender identity and transitioning to her audience—a rare experience on primetime American television. It was a powerful signal of how much progress the LGBT movement has made over the past twenty years, even though the T in that acronym still lags behind the other three letters in both social acceptance and legal protections, and in how much progress remains to be made.
In her new book No One Understands You and What To Do About It, Heidi Grant Halvorson tells readers a story about her friend, Tim. When Tim started a new job as a manager, one of his top priorities was communicating to his team that he valued each member’s input. So at team meetings, as each member spoke up about whatever project they were working on, Tim made sure he put on his “active-listening face” to signal that he cared about what each person was saying.
But after meeting with him a few times, Tim’s team got a very different message from the one he intended to send. “After a few weeks of meetings,” Halvorson explains, “one team member finally summoned up the courage to ask him the question that had been on everyone’s mind.” That question was: “Tim, are you angry with us right now?” When Tim explained that he wasn’t at all angry—that he was just putting on his “active-listening face”—his colleague gently explained that his active-listening face looked a lot like his angry face.
Where did it come from, and what are its intentions? The simplicity of these questions can be deceiving, and few Western leaders seem to know the answers. In December, The New York Times published confidential comments by Major General Michael K. Nagata, the Special Operations commander for the United States in the Middle East, admitting that he had hardly begun figuring out the Islamic State’s appeal. “We have not defeated the idea,” he said. “We do not even understand the idea.” In the past year, President Obama has referred to the Islamic State, variously, as “not Islamic” and as al-Qaeda’s “jayvee team,” statements that reflected confusion about the group, and may have contributed to significant strategic errors.
The editors of Smithsonian magazine have announced the winners of their 12th annual photo contest, selected from more than 26,500 entries. The winning photographs from from the competition's six categories are published below: The Natural World, Travel, People, Americana, Altered Images and Mobile. Also, a few finalists have been included as well. Captions were written by the photographers. Be sure to visit the contest page at Smithsonian.com to see all the winners and finalists.
In India’s state of Uttar Pradesh, the village of Kannauj lies a dusty four-hour drive east of the Taj Mahal, the white-marbled wonder built by the Mughal emperor Shah Jahan in memory of his third and favorite wife. Empress Mumtaz Mahal died in 1631 giving birth to their 13th child. The Taj is Jahan’s grand paean to lost love. But he also mourned his queen in much more personal ways. For one thing, Jahan never again wore perfume. Fragrant oils—known in India as attars—had been one of the couple’s great shared passions.
Then and now, Kannauj was the place to fetch the fine scents—jasmine oils, rose waters, the roots of grasses called vetiver, with a bouquet cooling to the nose. Exactly when attar-making began there, no one is certain; archaeologists have unearthed clay distillation pots dating back thousands of years to the ancient Harappan civilization of the Indus Valley. But today, Kannauj is a hub of a historic perfumery that draws much of the town to the same pursuit. Most of the villagers there are connected to fragrance in one way or another—from sinewy craftsmen who steam petals over wood fires in hulking copper pots to mothers who roll incense sticks in the shade while their toddlers nap on colorful mats nearby.
Leon Trotsky is not often invoked as a management guru, but a line frequently attributed to him would surely resonate with many business leaders today. “You may not be interested in war,” the Bolshevik revolutionary is said to have warned, “but war is interested in you.” War, or at least geopolitics, is figuring more and more prominently in the thinking and fortunes of large businesses.
Of course, multinational companies such as Shell and GE have long cultivated an expertise in geopolitics. But the intensity of concern over global instability is much higher now than in any recent period. In 2013, the private-equity colossus KKR named the retired general and CIA director David Petraeus as the chairman of its global institute, which informs the firm’s investment decisions. Earlier this year, Sir John Sawers, the former head of MI6, Britain’s CIA, became the chairman of Macro Advisory Partners, a firm that advises businesses and governments on geopolitics. Both appointments are high-profile examples of a much wider trend: an increasing number of corporations are hiring political scientists, starting their board meetings with geopolitical briefings, and seeking the advice of former diplomats, spymasters, and military leaders.“The last three years have definitely been a wake-up call for business on geopolitics,” Dominic Barton, the managing director of McKinsey, told me. “I’ve not seen anything like it. Since the Second World War, I don’t think you’ve seen such volatility.” Most businesses haven’t pulled back meaningfully from globalized operation, Barton said. “But they are thinking, Gosh, what’s next?”
When healthcare is at its best, hospitals are four-star hotels, and nurses, personal butlers at the ready—at least, that’s how many hospitals seem to interpret a government mandate.
When Department of Health and Human Services administrators decided to base 30 percent of hospitals’ Medicare reimbursement on patient satisfaction survey scores, they likely figured that transparency and accountability would improve healthcare. The Centers for Medicare and Medicaid Services (CMS) officials wrote, rather reasonably, “Delivery of high-quality, patient-centered care requires us to carefully consider the patient’s experience in the hospital inpatient setting.” They probably had no idea that their methods could end up indirectly harming patients.
On Thursday, we’ll finally get a sense of the true scope of one of the most important businesses for the Internet.
Amazon is due to announce the size of its Web Services product. Amazon Web Services (AWS) is a set of cloud services often used by startups, big companies, and government agencies. You might know AWS better as “the servers that run Netflix and Instagram.”
AWS lets companies buy powerful computers cheaply and whenever they need them to handle traffic, to store video, to power a database. It’s not an understatement to say that AWS is the piece of infrastructure that has enabled the current tech boom. The only single technology which might come close to it is the smartphone.
Why? The 2010s tech industry is built on quickly scaling a product to as many users as possible. It’s based, on other words, on fast growth. AWS and its competitors are what permit that fast growth. They have taken the normally considerable equipment costs—of servers, cables, hard drives, and power supplies—and abstracted them away. Entrepreneurs and coders can think about and purchase computing power on an as-needed basis, while the physical data centers they’re actually using sit far away in Virginia or Oregon.
This month, many of the nation's best and brightest high school seniors will receive thick envelopes in the mail announcing their admission to the college of their dreams. According to a 2011 survey, about 60 percent of them will go to their first-choice schools. For many of them, going away to college will be like crossing the Rubicon. They will leave their families -- their homes -- and probably not return for many years, if at all.
That was journalist Rod Dreher's path. Dreher grew up in the small southern community of Starhill, Louisiana, 35 miles northwest of Baton Rouge. His family goes back five generations there. His father was a part-time farmer and sanitarian; his mother drove a school bus. His younger sister Ruthie loved hunting and fishing, even as a little girl.
One of the most shocking parts of watching Kurt Cobain: Montage of Heck is finding out that the god of grunge was once a really cute kid. Director Brett Morgen peppers his documentary with Super 8 clips in which the future Nirvana singer can be seen as an infant, toddler, and grade-schooler, blowing out birthday candles, carrying around a stuffed panda, and sending kisses to the camera. Towheaded and cheery-eyed, wearing tiny suit jackets and cardigans, lil Cobain could have been in a Normal Rockwell painting. That he was the iconic all-America boy helps explain his later rebellion, making him an avatar for how traditional domestic life begat counterculture, and …
... oh, wait. I’m mythologizing, aren’t I? Assuming causes and effects that can’t ever be known, turning a human being into an abstraction:Montage of Heck, in some theaters now and airing on HBO on May 4, was created specifically to ward against this sort of thing. In 2007, Courtney Love gave Morgen access to a trove of previously unexamined recordings, notes, and artwork relating to her late husband, with one bit of instruction that would take the director eight years to carry out. “It was time to examine this person and humanize him and decanonize these values that he allegedly stood for—the lack of ambition and these ridiculous myths that had been built up around him,” Love told The New York Times.