vever

Veverka, Mark. (1998 August 17, Monday). A Refreshing Attempt to Pay Athletes to Play College Sports; Professor creates basketball startup for universities. The San Francisco Chronicle, Final Edition, Pg. B1.

Babson College accounting professor Paul McMann has an idea whose time has

come.

Collegiate athletes should get paid to play sports. The provocative concept

is the cornerstone of McMann's proposal for a new league that melds

education with vocation.

Called the Collegiate Professional Basketball League, the minor-league

startup is a refreshingly thoughtful attempt to create a system that doesn't

leave athletes out in the cold long after their college eligibility has run

dry. In fact, less than 40 percent of Division I men basketball players

graduate from college.

Under the current system, where our nation's universities have become de

facto farm systems for major-league professional sports franchises, "the

kids are being taking advantage of and, too often, they walk away with

nothing," says McMann, a CPA who once was a Bay Area employee of then-World

Savings.

Of course, that's not exactly the kind of story line that would emanate from

the press office of the National Collegiate Athletic Association, the

autocratic administrative body that is responsible for the hypocritical

system that exploits college athletes today.

Oh sure, college hoopsters get tuition and room and board for four years.

But playing big-time college basketball is a full-time job that is nearly

year-round, requiring players to miss classes and cram for final exams in

between television interviews and weight-training sessions.

University athletic departments reap millions of dollars a year in revenues

from television rights, gate receipts and licensing fees that aren't allowed

to trickle down to athletes in even the most innocuous ways, thanks to

ill-conceived NCAA policies.

Considering that less than 1 percent of all college basketball players make

it in the National Basketball Association, there is an alarmingly high

number of ex-basketball players that leave college without employable

skills.

McMann hopes to change that. His league would recruit college-eligible

players and pay them $9,000 a year and give them a $5,000 signing bonus.

Plus, the player would receive free tuition, room and board for -- not four

-- but eight years.

At the very least, each player would be required to attend eight weeks of

college classes during the off-season at the University of Maryland Eastern

Shore, an accredited state-run college whose former president sits on the

CPBL's board.

If the player wants to attend a trade school or another university in

addition to the Maryland university, the league will pay for that as well.

There are incentives, too. Players who complete a degree in four years would

get an additional $10,000 bonus, while those who get their sheepskin in less

than eight years would receive an extra $2,500.

But what's in it for McMann?

As a business professor for a leading institution well known for breeding

entrepreneurs, this is a chance for McMann to practice what he has been

preaching and start his own company.

In addition, he says he has a chance to build a business that can invoke

some positive change. "I want the kids to get an education, and we'll

provide them with the support system for him to do that," McMann says.

But before we explore the innovative particulars of McMann's new league,

what's the investment angle here?

Well, the school teacher needs to raise cash. With a wife and two young kids

at home in Massachusetts, the professor has put his money where his mouth

is. He has bankrolled the first year of his startup with savings and credit

cards, spending about $300,000 to date.

Now, he has hat in hand. There are two basic ways to take stake in the CPBL:

as an investor or a corporate sponsor.

The league is hoping to land some major equity partners, concentrating on

institutional investors, high net-worth individuals and corporate partners.

Ideally, the CPBL would like to lure one to three major stakeholders who are

willing to invest a total of $18 million for significant equity stakes, says

investment banker Richard Josephberg, a former Goldman, Sachs analyst who is

a principal of his own boutique firm: Josephberg Grosz in New York.

Josephberg says he's talking to fund managers, sports team investors,

entertainment and media companies, and high-net-worth individuals with a

penchant for supporting the advancement of education.

"We're hoping to attract investors who, of course, are looking to make a

substantial economic return," but also appreciate "the overriding

consideration of helping educate the underprivileged," Josephberg says.

It's not a slam dunk because potential investors want to know if McMann can

recruit quality players and whether Corporate America will sign on as

sponsors.

The CPBL is based on a marketing-driven business model where everything from

the naming rights of the league are for sale ($5 million for five years) to

the names of the teams ($400,000 a year).

Here's how it would work:

The CPBL is a combination of a European sports league and minor-league

baseball.

At first, the league would have eight teams that play in moderate-sized

arenas during the traditional basketball season on Saturdays and Sundays.

Ticket prices are expected to average about $7.50 a seat, attempting to make

it affordable for families. Remember: Revenues would be driven by

advertising, not gate receipts.

There are no franchises. The league owns all of the teams, and the rosters

are established by the league's director of operations, former Golden State

Warrior Alfred "Butch" Beard. Other former NBA notables involved with the

league are M.L. Carr, who is a consultant, and JoJo White, who is director

of player personnel.

The key will be obtaining television and cable television exposure, which

the league will pay for in the beginning if it must, McMann says.

League officials met with representatives of a major television company,

which was seriously interested in doing a deal with the CPBL. But not enough

of the building blocks were in place.

"The league is a nontraditional form of advertising, and I think they need a

marketing powerhouse" on board before some of the pieces fall together, says

an executive with the company who requested anonymity.

To be sure, there are significant risks in an unproven sports league. For

one, the NCAA eventually could change its policies and begin to pay players.

Or a major media company or marketing firm could start its own league.

Barriers to entry aren't that high, and competitors already are forming new

leagues -- such as the International Basketball League. But the IBL is

different in that it doesn't require its players to go to college.

Education could be one of the CPBL's biggest selling points among young

athletes and their parents. Another strength is its board of directors,

consisting of a solid mix of academicians, politicians, business people and

professional sports figures, including Chairman George Mikan, a former

Minneapolis Lakers star, coach and general manager. Mikan also served as the

first commissioner of the American Basketball Association, which eventually

merged with the NBA.

The board also includes Bill Gates (no, not the software magnate), one of

the co-stars of the documentary "Hoop Dreams." In addition, Oakland's Audrey

Rice Oliver, former mayoral candidate and chief executive of Integrated

Business Solutions, also is a director.

Oliver thinks that, if given a chance, the league could make a profound

impact on America's youth. "We need to change the way we look at sports.

There are too many kids who are good ball players but never get the

opportunity to play," she says. "Their education is the key to their

survival."

Mark Veverka can be reached by mail at 901 Mission St., SF 94103, by phone

at (415) 777-8444 or by e-mail at mveverka(atsign)sfgate.com.

GRAPHIC: PHOTO

LOAD-DATE: August 17, 1998

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