 Welcome to the sports playbook where we discuss solutions to issues that impact sports. I'm your host, Angela Hazelit. This episode of the sports playbook is dedicated to Dr. Meika Anaza, a colleague, a mentor, and a friend whose legacy will live on through the lives of those he impacted. Today's guest is Joe Kirkendall, the director of athletic business operations at the University of Virginia. Today we're going to discuss the business of college sports, transportation, contracts, and games cancellations. Welcome, Joe. Thanks for having me, Angela. I'm excited. Well, wonderful. I know you have lots of great things to share, and probably not many people know about business operations in athletics. So share with our guests what do you do, what kind of things occupy your time, and how do you help athletics at the University of Virginia? Yeah, the official way to describe it, I would say is help with a lot of our accounting and finance functions within the athletic department. But then at a kind of smaller scale, I always say I just solve problems, whether it's for administrators or coaches and what they need. But what we really do is we are the accounting and finance epicenter for the athletic department. So at a basic sense, that's journal entries and accounts receivable accounts payable. But then we also wear a lot of other hats within an athletic department, particularly when it comes to a public university like University of Virginia, and navigating red tape and all those state rules and regulations. We act as a liaison between a lot of external units within the universe or within external athletics, but internal within the university. So that's procurement, risk management, which is probably why we're here, parking different units like that. And that's a big part of my role is acting as that liaison between procurement and risk management. So I do a lot of our purchasing and insurance and stuff like that, related to our teams, coaches, units, you know, we have 27 sports, which is a lot, and then host of other units, whether it's compliance facilities, all that stuff. Does that require you to review a lot of contracts and find out what the terms and conditions are? Yes, yeah, we have a lot of contracts do come through me in my office in terms of like vendor and yeah, vendor contracts. I don't, I have access to, but I'm not responsible for employment contracts or CFO and our HR rep handles employment contracts, but all maybe 99% of vendor contracts come through me, particularly hotels is what we have the most of with team travel. But then we also have our big ones like pouring rights with Pepsi and Nike and all that stuff. And reviewing those and making sure we're, we're holding up our end of bargain and they are too. And if not doing what you need to do to find the resolution. And so that does that mean yet you're responsible then to making sure that the university gets paid and when the bills are paid as well. Yeah, so that's actually a major part of my job is making sure we are paid. If it's a contract where we're paying or vice, excuse me, where we're receiving money or vice versa for paying. And so, you know, we get annual payments from our big apparel partners, whether it's Nike and we have separate deals with warrior for men's lacrosse STX women's lacrosse Rawlings for baseball and softball. Within those contracts, some of them have annual guarantees or I would say guarantees, but annual support where they send us X amount of dollars every year just for having the agreement and being the exclusive provider, whatever that apparel is. And then the part that I really have to keep up with. And it's a good problem to have at UVA we're pretty successful in sports is the performance bonuses. So I'm not sure people realize that but a lot of these contracts have performance bonuses in them too. So main baseball is a great example right now, right? We just advanced to the college world series this past weekend. And so we have with our Rawlings deal performance bonuses built in where if we make it X distance in the NCAA tournament, they're going to give us some more money. And so at the end of each of the seasons, I have to check up on performance bonuses to see if we've met any of those and invoice those respective apparel partners to make sure we receive those funds for that. So the bonuses come from those apparel partners. Do you also have any insurance that you ensure against a potential for those bonuses? Yeah, so those the way those apparel contracts have been structured have changed over the years. I think they used to be a lot a lot of times they used to be tied to the coach, not the university. And now they're all tied to the university. And so at the end of the day, we're essentially using those dollars we get to pay off or offset the bonuses we're paying coaches because coaches have their own performance bonus clauses set into their contracts as everyone who at least follows college sports is familiar with. And to answer your question there, it does exist a market for ensuring those coaches bonuses. And I don't think many schools are ensuring kind of small sports or Olympic sports will baseball, but there's definitely a market for ensuring football, men's basketball, women's basketball coaches bonuses. And it's essentially like playing the lottery. And I think, you know, we discussed that right before I got here in 2019, UBA men's basketball advanced or not advanced, but won the national championship. And our business office at the time, because of the success of the team in the regular season, decided to pursue purchasing that performance, bonus insurance, and it paid off because we won. And so by purchasing the insurance, we ended up paying out of our pocket, just the insurance cost and not having to pay the actual bonuses to the coaches as that came from the insurance company. And so that's the only time we've done it. And it's paid off so far. And it's just, I think an interesting and unique market that many people don't think about, obviously, and a lot of the companies that are providing that insurance are companies that also ensure like sponsorship and promotional events, you know, like the million dollar half court shot. It's the same type of people that are ensuring those that are ensuring these coaches performance bonuses, which is definitely a unique thing that I don't think people realize. As a market exists for that, and I think there's a lot of risk for the insurance companies too. I mean, there's risk for everybody because, as my boss always says, he's like, it's essentially, you know, gambling, taking money and going to the biggest books and putting it down. Well, the biggest books have access to all the teams, right? They're getting money for people betting on all the teams, whereas with multiple insurance companies, one insurance company could get stuck with the four teams that advanced to the final four, whereas another one doesn't. So I'd be curious at some point to know to see their side of it and see how well it pays off for them too. Yeah, it's definitely an interesting business and you have two kind of two streams there. It sounds like an insurance market and then also your apparel sponsors that are maybe potentially could pay out for performance bonuses. That's really interesting. So you have a lot of this financial oversight into the budget. Sometimes things don't go according to plan. For example, in 2018, there was weather from Hurricane Florence that was set to disrupt the home football game in Charlottesville, and I know that was a little bit before your time, but the game was actually moved to a neutral site and tickets were ended up being free. So I imagine the university lost ticket sales, additional travel expenses they accumulated. In 2021, you had to cancel a bowl game because of COVID. So when things like this happen, how do you pivot? Yeah. So in 2018, the game versus Ohio football game versus Ohio was before my time, but I'm somewhat familiar with the situation. And at the time, event cancellation insurance exists also, that's very pretty well known. And I'm pretty sure any big event would have event cancellation insurance, which is no different. And at the time in 2018, the ACC Atlantic Coast Conference, they would purchase a policy on behalf of all the members schools. And we had a blanket policy and they would just deduct that. I say they purchased on our behalf, they would still pass the cost off to us. They would deduct that out of our annual revenue distribution. They just had a group purchase. And then come, I think last year, maybe this fall season, I'm not for sure. I think some of the, was unique by the Atlantic Coast Conference is it spans the whole Atlantic Coast and even some of the Midwest when you get all the way to Notre Dame. And so, especially with fall and hurricanes and stuff like that, this insurance was very helpful and productive for Miami's and Florida States, but the Boston colleges, what was it really providing them? They're Syracuse. Syracuse is an indoor stadium. Maybe you could say there's snow, but Syracuse, indoor stadium, they're not going to have hurricanes and they have snow, they're still going to play because they're indoor. And so I think some of these schools felt like it was other schools kind of subsidizing the Miami's and the Florida States or these Southern schools. And I don't want to call them out specifically, but just it really helped some schools and didn't help another. And we were all saying, paying the same price, which right or wrong, I mean, there's a lot of subsidizing college sports. I mean, you could go down that rabbit hole with football, subsidizing Olympic sports and things like that. But the ACC eventually or the, I'm not sure if it was the 80s or the presidents or who decided to scrap the ACC blanket policy and allow each school just to purchase their own if they felt the need to. And so in 2018, we had the coverage. I'm not sure because I wasn't here. We're kind of payouts or how we got, if we recovered ticket sales from that, but with a claim from that, but we now proceed without our own cancellation insurance. We're kind of right in the middle when hurricanes are rare. And in fact, in 2018, they moved the game and I wasn't living here at the time, but I think the hurricane ended up kind of avoiding the area anyway, and they still could have played the game, but that was definitely a decision of already made, right? I mean, that's how you have insurance, right? You have it for when you think you don't need it. But with that, now each member institution in the ACC can decide if they want to purchase their own event cancellation insurance or not. And the last two football games of 2022 season were also canceled. This time it was following a tragic incident when one of a few of the UVA, one of UVA's former football players shot and murdered three other UVA football players who are on a chartered bus returning to campus from a field trip. So what was the response from the campus and the community following this incident? Yeah, that was obviously a tough situation altogether. Just having an incident like that on campus, let alone be related to athletics and the impact it can have on that, especially with athletes who are in the limelight and well-known around campus or grounds, as they call it at UVA. But in times of difficulty and struggles when people come together, and so it was really cool to see the campus community really rally around each other and come together for that. And I'm excited to see how, you know, we haven't played, we had a spring game, but we haven't played a football game since the tragedy happened because we canceled the final two games. When we started on the road this year in Nashville against Tennessee, and then the first home game will be September 10th actually against Jamie. And so I'm excited to see kind of what we can do for those families in the community as well and rally around those players and continue to cement their legacy going forward. But yeah, unique type of cancellation. And so it didn't really fall under any normal umbrella. And so we had to cancel vendors, you know, you have DJs lined up. It was one home game and one away game. And so luckily we didn't, to my knowledge, we didn't get into any legal battles, if you will, with any vendors. I mean, none of them were too high dollar anyway. But most of them were at least sympathetic or empathetic to understanding why we canceled. But there were also, we did have discussions on like if it ever got to a point of needing to fight or push back. Most force majors have a like threat to the community clause in them, which we were willing to use if needed, which did come into play a little bit because we had a men's basketball game the day of, or I guess the shootings happened late Sunday night that Monday we had a men's basketball game that we also canceled, which campus was shut down at that point. So that was kind of a different situation as well. And I didn't touch on the 2021 bull game, but yeah, the bull game, we used a lot of force major language to get out of some contracts we had in that one too, since that was COVID related. Yeah, and that's a lot of like things that happen that are not foreseeable. And usually it's typically related to some kind of active, active God is we saw a lot of because I see a lot of hotel contracts, like I said, and you're the more legal expert than me, but I mean, we after COVID in 2020, like UVA completely changed and I even saw a lot of hotels completely changed their language in the force major to like specifically call out COVID. I mean, it was no longer like acts of God and medical like it literally said pandemic endemic like we, yeah, UVA sent a thing out to people who deal with contracts was like, this is the first major language we're going to use now that was very specific, and new and different than just a general force major clause, which I'm sure we'll stick going forward now. And one thing that we really added to our force major language was in addition to like, maybe, maybe our football team which was sample didn't have COVID but if the campus were to shut down because there was an outbreak and they didn't want them to travel because of that would that get us out of the out of the contractor or the remedies related to it because a lot of hotels were pushing back saying, if your team doesn't have COVID but administration says you can't travel that's not our fault that they say you can't travel. And so I think we put a clause that said like COVID either testing positive or by state or institution directive of no travel to ensure that it covered that too because they were like, well, there was one sport I can't remember what it was where they like shut campus down for a weekend so they could travel when no one on the team at COVID so the hotel is like, you didn't you're not traveling because you don't you have COVID you're not traveling because someone said you didn't and that's where we kind of change that language to be like institution or state directive as well but yeah totally change what your language looks like to us as I'm sure you witnessed in your area too. Incidents like that really really caused you to reflect on how you're doing business. Let's talk about transportation you have teams of traveling in the Midwest up and down the East Coast and it really is dependent on proximity and maybe the size of the team but talk to me about the decision to charter planes versus flying commercial versus getting a boss you know what kind of decisions go into deciding the method of transportation. Yeah so as is the case with most schools are men's women's basketball and football teams we allow them to charter it's kind of somewhat of the revenue sports get a little more than the other and actually normally like these are term revenue sports because revenue means bringing money in like I would say the profit sports if you will versus the revenue sports is even men's lacrosse and soccer and all that have revenue but football men's women's basketball they get to charter fly anywhere that we it's like a five hour bus trip or more it's kind of the line we draw to get in the weeds where that gets tricky at UVA is like is Charlotte you know like four and a half on it's four and a half in a car is a five on the bus so a lot of teams playing Charlotte so it's like is Charlotte a charterable area and then beyond that they'll bus and then all the other sports they'll pretty much bus or if they have to fly they'll commercial fly or they can put specific requests if there's needs for a charter flight which does come up if you know there are some unique I think we're probably unique place to travel to. Queen Charlotte also has an airport but not a ton of commercial options so we don't see it on our end but like South Bend Indiana is a really hard place to get to and it's a little further away so do you go to Chicago and then bus over do you fly so sometimes with like Miss Class and even like ensuring people get back in time so they don't get back you know the NCAA rules like you get back after a certain time on the next day it counts as a countable day so if you're planning on that being your off day you get in the weeds and stuff like that but for the most part all our other sports will just commercial fly or bus as needed and we use Anthony Travel as our preferred travel provider which I would I don't know for sure but I think 90% of the schools jam you just added having Anthony travel rep on site we don't require teams using Anthony Travel but it's a resource there for them to use and they do a lot of our well they hold most of the contracts with buses and obviously they have their own relationships with the major airlines and but they're an unique spot too because while Anthony Travel is a big company that has positions at all these different schools in the country we still need to make sure that the transportation contracts they're holding meet our risk management standards which I think at UVA we have pretty high ones compared to others I think I don't want to be out of term I think for buses like we're 10 million aggregate liability insurance whereas I think the industry standard right now might be five but UVA requires 10 and so we have our own transportation contracts UVA that Anthony Travel can also access but ensuring there's kind of collaboration between what Anthony Travel with their vendors that they prefer to use as well as the ones we have and that they meet the risk management standards that we have for ourselves similarly we have a couple preferred I would say preferred which is a couple of charter flight companies that we use more often than most and when we get a new one on board it can take about a week or two back and forth with them in our risk management office to determine what's what level of standards that they want again charter flight insurance levels are much higher sometimes they can hit the building in range for incidents because obviously there's a lot that any plane crashing is probably going to result in death and so having at that point as you just pass them off to risk management like I'm not an expert in being able to kind of have those conversations and let our risk management office at UVA have a discussion with a charter flight company on what levels they're going to agree upon that X charter company will hold and then list us as an additional insured and WNBA player Brittany Griner was recently released from Russian prison as part of a prisoner swap just this past weekend she experienced harassment in the Dallas airport while traveling with her team so now the WNBA is actually talking about chartering flights instead of flying commercially for health and safety of players do you foresee that being something that would be more prevalent for the University of Virginia I think the sports that would be prevalent for are the ones that are already traveling right the men's women's basketball and football where there's the more known athletes with national profile so that kind of already solves that issue there we did charter a couple extra flights during the covid era if you will then that we normally wouldn't have because we UVA was one of the like we were pretty tight covid standards we didn't allow any fans during the 20 fall 20 spring 21 season where I know a lot of places were released on like 10% or even more than that for pretty much everything even through the spring we had no fans but friends and family and I just give that example it wasn't until late spring that we even allowed teams to commercial fly we had a commercial flight man and so teams are having a bus to the Miami and Florida state trips and ACC but there were a couple extra charters in there again for the health and safety reasons because we don't want them to commercial fly but we also felt like busing was too far they thought it was too far and admittedly it's also what a lot of the charter companies were using from a marketing standpoint during that era was hey you have a controlled environment with you know it's your people and you don't you can you can board the bus from out or the plane from outside and have to go through the terminal and yeah they probably use that to their advantage a little bit as well. I yeah I would imagine so what about teams traveling together or do you split up teams at all there's the well-known Marshall University incident in 1970 where the football team was chartering on plane and crashed and killed everyone on board do you have a policy of separating the team to fly so that any kind of incident like that would the losses would be would be less. No we don't have any policy like that so unless the whole team travels together unless an athlete has a test or something and they need to join the team later but everyone travels together whether it's on bus or commercial flight I mean some teams are large where they need two buses to get to where they need to go but that's just because of the size not because of a risk or safety measure. Yeah I think that's a pretty common practice that we're going to arrive at the same time and maybe can coordinate things on their trips. Talk to me about funding sources like where does the money come from to pay for the expenses and athletics. Yeah so I mean the biggest one especially out of power five Atlantic Coast Conference School for us is our revenue distribution that we get from a conference which is primarily made up of TV but has some other things too it's also includes the unit shares of the NCAA distributes for NCAA men's basketball performance and then it also includes the bowl distribution that all the bowls pay out which is kind of similar to the unit situation. It's at the biggest chunk of ours we at University of Virginia for better or worse and for often critiques still take student fees. It's one of the and Jamie I bring them up because I think they might take the highest of any school in the country and so it's kind of a Virginia thing right now is kind of figuring out where and what is too much of student fees to go towards athletics but we even at University of Virginia they the state has outlined like if your FBS you can only this is the maximum you can take if your FCS this is the max amount if your division one or two three etc it's different amounts but so student fees is another large chunk of our revenue sources. Ticket sales is obviously a multi-million-dollar revenue source for us and that can ebb and flow for us because we were pretty big football stadium and so I think it's like speaking wrong but it's almost like 66, 68,000 so we might have 40 but the next thing we could have 55 and so men's basketball we can predict that pretty well because it's going to be sell out pretty much every game and women's basketball after some success last year we saw some great increase in ticket sales is there as well so ticket sales revenue distribution and student fees are probably our three main sources and then like I said we have those other areas whether it's our pouring rights deal with Pepsi our apparel deals with Nike and Rawlings and Warrior and all that stuff but that's where we get our revenue from hopefully we have enough to make it through the year. And that's pretty typical from other universities as well as where they're collecting revenue. And you mentioned contracts earlier what other types of contracts do you do you see that are typical at the University of Virginia in regards to athletics so you have these pouring rights contracts you have apparel contracts but what other types of contracts do you typically see that that may come across your desk? Yeah so we have hotel contracts like I said that's a really big one that we have that happens a lot and being a public institution we like I can't sign the contracts even our athletic director can't sign contracts we have to send those off to procurement for signature but one really cool thing that our procurement's done which I don't know if other ones have and I think it's really creative of them if they have created excuse me they've created a contract acceptance form they call it which is essentially an addendum that gives me signatory authority so I can attach this addendum to the contract and that counts as a signature and this acceptance form basically just outlines everything that they would otherwise red line if I submitted it for signature which is a lot of like state statute governed things so the biggest thing is like indemnification Virginia has this statue that we can't indemnify other parties and most contracts by default have indemnification governing law we can't agree to governing law of another state we can remain silent but we can't have it say New York it has to be Virginia or silent and so things like that are listed in this contract acceptance form where it's like we accept this contract in whole with the exception of anything related to indemnification all that stuff and so that's been really helpful because then I don't have to send it off and wait for it to be sent back other contracts as we have a lot of you know our software and providers so Pac Yolen's kind of the big one one of our big contracts that we have which is a ticket sales software which a lot of schools use Pac Yolen so we have a contract with them and then that one has a ton of addendums because there's all these kind of third party vendors that work through Pac Yolen for different revenue sources or there's I think protect is what it's called PROTCHD which is where the fans can buy insurance for their tickets on the front end so that's they work through Pac Yolen so that's just an addendum to our Pac Yolen contract so that Pac Yolen contract just keeps getting addendums added left and right to that one and then another big one is and in this section of a big revenue source and I think about is corporate partnerships I would say most if not all big division ones who was now outsourced their corporate partnerships to kind of the there's the big players Learfield's kind of the biggest we actually work through play fly sports which they have LSU Virginia I think Villanova as well and so that's revenue source too where we are essentially offloading our risk of not getting enough corporate sponsorships where they pay us a guarantee every year corporate partnerships and then their own staff sell all the corporate partnerships and then above certain amounts there's revenue share but that's a pretty big agreement too that we have with them because yeah that's a revenue sharing agreement yeah can outsource that to the experts but yeah and most schools right now outsource I would argue 95 percent division one schools probably use Learfield I think peak is maybe another one and play fly is the one that we use which is pretty big as well Learfield's obviously the biggest and tell me a little bit more about is a risk of not getting paid do you have good relationships with people on the other side of the context yeah I mean I would say there's always risk of not getting paid and we do have good relationships and my time here there's only been one time where we weren't paid and someone um they actually tried paying us but it was a phony check and then we just couldn't get in touch with them to pay us back and so at that point we had submitted a collections request through our central finance office at the university and they sent it off to collections and they credited our accounts with that point it was out of our hands that the university side took the risk and I don't know what they deal with collections but there is that risk of not getting paid and sometimes it takes a lot of reminder emails to eventually get paid but there is that risk but hopefully the good relationships ensure that it doesn't happen and we're running we're running short on time but I know um you have coaches who put on camps that are not affiliated with the university they're not running them as employees of the university but as independent contractors so um how do you kind of delineate that risk from from the university virginia yeah we actually take a pretty hard stance on making sure every coach runs their camp as a separate LLC um and they are never an agent of the university or the athletics department um so that we don't take any risk of camps and because of that we also charge them facility rental fees to use their own their own fields and courts it will it's very cheap but it's also more just to show that there's not a um a relationship um but they're acting as their their own entity and paying their own employees filing their own tax forms and so we insurance and all that insurance they have to hire their own employees um and like I said there's a lot of still a lot of work back and forth with them in terms of facility rentals and they use our athletic trainers we build them all back for that stuff but we take a pretty hard stance of making sure that our camps are completely separate and that's mainly from risk management perspective because um and I actually personally tried to avoid staying away from them too because it's gotten really really intense from like child you know university as a child protective services unit um and it's gotten really intense the rules um now for our camps like parents a parent or guardian has to check in and check out every single student individually you can't just say like camps over go find your parent and stuff like that right right yeah it's a safety thing so well Joe thank you so much for your insight into the business of college sports it's about transportation contracts game cancellations we covered quite a bit today so thanks for to thanks for being on the show inviting me and asking some great questions I appreciate your excellent responses and thanks to our viewers for joining us today we'll see you next time on the sports playbook thank you so much for watching think tech hawaii if you like what we do please click the like and subscribe button on youtube you can also follow us on facebook instagram and linkedin check out our website think tech hawaii.com mahalo