A Corporate Pitch for Athletics

A district supplements gate receipts and pay-to-play revenue with a lucrative soft-drink sponsorship to expand its sports program by STEVE MORRISON

School administrators long have wrestled with the dilemma of idealism versus pragmatism. That dilemma plays out ever so powerfully when it comes to funding interscholastic athletics programs.


The Academy School District in Colorado Springs, Colo., has struggled with the need to address growing student interests by adding several sports while simultaneously attempting to focus its limited resources on student academic achievement.

As Gary Marx, AASA's associate executive director, recently told USA Today: "Expectations for schools are skyrocketing at the very time when states are floating in a sea of red ink."

Although our school district is not in fiscal danger, we are facing high expectations for better achievement in the classroom, yet at the same time we are feeling pressure to address issues of gender equity and legal risks. We are doing so by adding interscholastic teams in girls golf, girls lacrosse and boys lacrosse and by hiring athletic trainers for our district’s three high schools. Once these new teams are in place, our district will provide interscholastic programs in 11 boys’ and 11 girls’ sports.

Adding to the complexity of the dilemma is that our community represents the birthplace of statewide legislation for tax limitations and governmental spending restrictions in Colorado. Simply raising taxes to provide additional funds for athletics is not an easy option for the Academy School District. Much as we would like to raise additional tax dollars to move our students onto the playing field, we have had to become very pragmatic in finding ways to fund school sports.

Problems create opportunities. The challenge of funding new athletic programs with no additional tax revenue forced the district to supplement the funding arrangements that have been in place for several years--participation fees (which raise about $70,000 a year), gate admissions ($25,000) and team fund raising--with new income sources, primarily corporate sponsorships.

Pay to Play
In 1982 the district decided to impose a participation fee for athletics. This fee, currently $60 per athlete per sport, is in the mid-range of those districts with pay-to-play policies. Recent surveys have found that participation fees in the Colorado Springs and South Denver metropolitan areas range from $40 to $120, with some schools providing discounts for an athlete’s second or third sport, and other pay-to-play arrangements offer discounts for siblings.

While a few local school districts do not impose charges, the majority have some participation fee in place. In a 1994 survey conducted by the National Federation of State High School Associations and the National Interscholastic Athletic Administrators Association, almost 30 percent of the athletic directors nationwide indicated their schools raised funds from participation fees. Another 17 percent said they expected to consider fees in the future.

Many public school leaders believe pay-to-play policies limit participation, and others oppose them on philosophical grounds. Our district attempts to address these concerns by encouraging each high school to maintain a support fund through proceeds from fund-raising events and gate receipts to assist those students unable to afford the participation fee. The athletic directors make every effort to never turn away a student from joining a team because of the inability to pay.

Corporate Partners
Corporate sponsorships are an exciting new funding source for all school programs, including athletics. In some respects, local schools are only now catching up to the lucrative sponsorship deals that statewide athletic associations have carved out over the years. For instance, the New Mexico Activities Association has multi-year agreements with 50 firms, which bring in anywhere from $100 to $35,000 for the organization, according to the National Federation of State High School Associations.

Recently the Academy School District signed a $4.62 million exclusive rights contract with Coca-Cola. This contract, which is expected to bring in at least $462,000 annually for the next 10 years, was negotiated by DD Marketing of Pueblo, Colo., and at the time it was completed the contract was the largest of its nature on a per-student basis. (During the past year the Colorado Springs, Colo., district signed an $8 million, 10-year deal with Coca-Cola, and the Grapevine-Colleyville, Texas, schools negotiated a $3.4 million pact with Dr Pepper, according to Education Week.)

In the 12 months that it took to develop the sponsorship proposal, negotiate the contract and sign the deal, we learned a lot. The major lesson was to shift from thinking like educators to thinking more like businesses.

Schools are capable of generating revenue in the form of corporate partnerships in several different ways. The business community often is willing to pay for many things beyond the typical advertising that schools have solicited, such as sports programs and student yearbooks, for years. These opportunities include granting exclusive rights to market a product, exposure of a product to students, parents and employees and "good will" or name recognition.

A school district needs to consider what they have that may be marketable, then do a market analysis, in much the same way that a business would, to determine the worth of that product. Consumer markets in which there are several major players and intense competition, such as the soft drink business, present ready opportunities. School districts can benefit when two or more competitors are willing to bid for a product, right or service.

In addition to selling exclusive rights for a company to market its product (soft drinks, snacks, and athletic goods) on school property, many schools have found a market for naming rights to facilities, such as stadiums and auditoriums, and have opened up major advertising opportunities--on buses, rooftops, school vehicles and publications.

Another opportunity exists in bundling services to make an attractive package. Consider, for instance, a telecommunications package, which might include long distance services, local phone services, cell phone services and Internet access. These opportunities are not limited to large districts. Some small districts have formed consortiums to negotiate similar contracts with businesses.

Negotiating a Partnership
Early on a decision needs to be made whether to hire a marketing firm to represent the district or to conduct the process with existing personnel. The Academy School District found that contracting with a marketing firm was worthwhile. The commission paid to the firm was a fruitful investment, not only because of the amount of time the company spent on the process, but also because the marketing firm had an understanding of the marketplace that educators normally do not have and had developed a network of contacts that proved valuable.

Administrators in other districts have commented they feel strongly they can provide the services themselves and save the commission. In addition, the political atmosphere in some districts may make it unwise to pay a commission for marketing services. To negotiate yourselves or hire a marketing firm is a decision each district will have to make within its own context.

The district needs to discuss those things that will be given to the corporate partner. As Gene Cato, commissioner of the Indiana High School Athletic Association, told Governing magazine: "Nobody is going to give you big dollars for nothing. You have to determine what you have … that is worth something to corporate people."

The Academy School District offered a package of advertising, in addition to the exclusive rights to market and sell soft drinks on school grounds.

To help with community acceptance of a corporate partnership and minimize criticism, one of the most effective things that can be done is to form an advisory panel of parents, teachers and administrators to oversee the entire process. The panel may need to clarify the purpose of the corporate partnership, survey building principals to gather their views, develop the Request For Proposal, develop bidder selection criteria, review bids and make a recommendation for bid acceptance to the school board.

Key Stipulations
We found the advisory panel made several essential contributions during the process of negotiating a contract for exclusive soft drink vending rights. These included:

  • Requiring soft drink vendors to provide a full range of products, including healthy alternatives to sweetened soft drinks, such as fruit juices.

  • Allowing the building principal to have the final say about soda machine placement in the school and which products are sold in each machine. Some schools prefer to have only juice, water or sport drinks to avoid offering sugary soft drinks.

  • Requiring the machines have timers so they cannot be operated during certain times of the day.

  • Limiting advertising to mostly publications and locations accessible to adults, such as school and district newsletters, district directories, district calendars, sports programs, gymnasiums, outdoor stadiums and scoreboards.

  • Granting the district the final decision over advertising content and placement.

  • Requiring all soft drink employees be properly attired on school property and that they undergo a background check before being allowed to enter the schools.

  • Making it clear the partnership will not influence curricular content and/or teaching methods.

    Most importantly, school leaders must maintain a clear and consistent stance that the education of students is the primary mission and that nothing in the corporate partnership will detract from the efforts of teachers and administrators to educate students.

  • Pitfalls and Problems
    Critics of corporate partnerships strongly oppose any financial relationship between business and educational institutions. Alex Molnar, a professor at University of Wisconsin-Milwaukee and one of the most vocal critics, insists that "children are being exploited" and that "commercialism ties up student time." The approach taken by the Academy District to develop corporate partnerships has put safeguards in place that will prevent these problems.

    Visitors to school districts that claim to have no commercialism in their buildings will spot any number of corporate logos on student clothing, corporate emblems on almost every piece of equipment in the school (have you ever seen a computer without a brand name plainly visible?) or book covers that extol the virtues of careers in the armed forces. One would be hard pressed to find a school that truly has no commercial links.

    If commercialism already exists in education, then the real decision may be how to monitor and control the level of commercialism that students are exposed to so that the primary educational mission is not compromised and new sources of funding can be developed to support student programs.

    During our negotiations, several parents addressed the school board with concerns about the level of advertising their children would be exposed to as a result of the partnership with Coke and about the exclusivity that was at the core of the agreement. The district pointed out that the level of advertising would increase somewhat for parents but would be barely noticeable among students in the schools. We also noted that an informal exclusive deal had existed for the previous decade or more since only one soft drink brand had been available in the schools. Now the district was earning money that would benefit student programs from the exclusive rights.

    Confidentiality was an ongoing problem. Private firms, like soft drink companies, are accustomed to operating in a very confidential manner, which creates a conflict with the open records laws of Colorado. The school district lawyer helped to devise contract language that allowed the district to keep confidential as much information as possible, but made it the responsibility of the corporate partner to pick up the cost of all legal fees if a legal challenge arose and the corporate partner sought to withhold information from the public. Thus far the district has been able to work out all requests for information with no significant problems.

    Spending Priorities
    If a district is successful in finding substantial new sources of funding, the administration and board should consider carefully how the funds will be spent. While the Academy School District entered into its partnership with Coca-Cola to support the creation of new athletic programs, the money generated could be applied to other programs if the district desires. Administrators can expect teachers, principals, parents and students will have a multitude of ideas on how the new money can be spent.

    As in all budget decisions, the expenditure of funds should be decided in a thoughtful manner on priorities within the context of the school district's mission and goals.

    Steve Morrison is executive administrative assistant to the superintendent, Academy District 20, 7610 N. Union, Colorado Springs, Colo. 80920. E-mail: smorrsn@d20.co.edu