At USC, assessing the financial damage from Reggie Bush and O.J. Mayo scandals is the multimillion-dollar question
The victories, and a national championship they produced, are vacated.
The trophies — a copy of Reggie Bush’s Heisman statuette and a crystal football for a Bowl Championship Series title — are now ghosts of Heritage Hall.
The forfeiture of those wins and mementos is just a fraction of what USC lost in the wake of some of the harshest penalties in college sports history — delivered largely because the NCAA found numerous violations relating to Bush.
The Trojans men’s basketball program also was punished for violations related to former star player O.J. Mayo, and the school actually paid some of that in cash: a $5,000 fine and the return of $206,200 it received for participation in the 2008 NCAA tournament.
No part of what USC’s football program has lost can be itemized in such a straightforward way, making any attempt to tally Bush’s financial impact a daunting task. Unlike public universities with budgets and expenditures open to review, USC, as a private school, is not required to make its budgets and expenses available.
“I can’t quantify monetary damages,” Athletic Director Pat Haden said.
This much is clear: The football price tag already runs well into the tens of millions in lost bowl appearances, sagging attendance, attorney fees and other direct and ancillary costs.
From the 2002 through 2008 seasons, USC played in seven consecutive Bowl Championship Series bowl games, appearances that annually infused millions into the school’s athletic coffers. In 2009, with the NCAA’s investigation looming over the program, the Trojans fell to a lesser bowl. And for last season and this next one, a two-year bowl ban that was part of the penalties eliminates that postseason revenue jolt. The school is also hustling to shore up recent drops in attendance, season-ticket subscriptions and support-group memberships.
Those are only some of the more obvious tangible losses.
Andrew Zimbalist, a Smith College sports economist, said USC would suffer in ways less obvious than the direct economic hit to its football revenue.
Zimbalist cited recruiting as one example. David Carter, executive director of the USC Sports Business Institute, went even further, saying the intangible fallout from the Bush investigation and penalties is greater than the financial blow.
“The athletic brand of a school can have far-reaching impact beyond the money the athletic program brings in,” he said.
USC reacted accordingly. New President Max Nikias acted quickly after sanctions were announced in June 2010, removing Mike Garrett as athletic director and replacing him with Haden, a lawyer and highly respected former USC quarterback. Nikias also hired a vice president of athletic compliance and nearly tripled the size of that staff.
“It’s about protecting the university brand,” Carter said. “If the brand atrophies, that is a much bigger problem than if the athletic department has a bad year or two.”
Not that USC and its athletic department are hurting financially.
Since the announcement of sanctions a year ago, USC has started construction on the John McKay Center, a $70-million, 110,000-square-foot building that will house football offices, training and rehabilitation facilities for all athletes and also academic services.
It also struck a new licensing agreement with Silver Star Merchandising, a Texas apparel manufacturer and distributor with ties to Dallas Cowboys owner Jerry Jones, and accepted an unspecified sum to endow the athletic director’s position that the school reported was the largest endowment gift ever received by the USC athletic department.
And the Trojans signed off on a new Pacific 12 Conference television deal estimated to be worth $3 billion over 12 years, an average of $21 million a year for each school.
In addition, the university announced it had received gifts from donors of $200 million in March, $110 million in April and $150 million in June — none related to athletics.
So, in light of those financial boosts, did USC really lose anything?
Lane Kiffin, who replaced Pete Carroll as football coach five months before the sanctions were announced, felt the intangible cost even before he knew the penalties.
“We had recruits say, ‘SC is the best place for me. I want to play there but there is too much hanging over the program,’” Kiffin said recently.
A few weeks after the sanctions were announced, Kiffin released two players from letters of intent, including offensive lineman Seantrel Henderson, who enrolled at Miami and was selected to several freshman All-American teams.
The NCAA also granted juniors and seniors an opportunity to transfer without having to sit out a season. Defensive end Malik Jackson and running back D.J. Shoemate were among those who left for other schools.
“When you start having players transfer out that costs you,” Kiffin said. “You could see it last year in our depth.”
USC’s record last season was 8-5, the program’s worst showing since 2001. Attendance was down, too, to an average of 79,907, its lowest since 2003 — and that costs the university not only in ticket revenue but also in concessions.
The Trojans averaged 90,812 per home game in 2005, the season Bush won the Heisman and the Trojans pursued a third consecutive national title.
In 2006, after the allegations that Bush and his family had received extra benefits came to light, the Trojans averaged a school- and Pacific 10 Conference-record 91,480 per home game. Since then, however, attendance has fallen every year — to 87,476 in 2007 despite a Rose Bowl championship; to 86,793 in 2008 with another Rose Bowl winner; to 84,799 in 2009 as the team slipped to 9-4 and the Emerald Bowl; to last year’s sub-80,000 dive.
One positive: Corporate sponsors did not flee, according to school officials.
“Granted, with everything there were questions, but at the end of the day there weren’t any limitations placed on us in terms of delivering,” said Jose Eskenazi, an associate athletic director in charge of marketing. “We’re still on TV, we still have a radio broadcast and there is still a turnout for games.”
Marc Ganis, a Chicago-based sports business consultant, said USC probably has taken short-term hits but is positioned to rebound. He said bad behavior by athletes has become so commonplace that it would have to “go beyond the pale” to adversely affect sponsors and others who might want to partner with USC.
“It would have to be systemic or the players would have had to do something . . . much worse than what Reggie Bush was accused of doing,” Ganis said. “The notion of players taking money, as bad as that is, is discounted to a degree.”
Steve Lopes, a senior associate athletic director, said USC, like many sports organizations, is also suffering from the effects of a poor economy.
As for Bush, Lopes said, “I don’t know that there is a direct correlation as much as it’s about winning and losing. As much as anything, people are kind of waiting and seeing how our team is going to be.
“I think you can go anywhere in the country and, with a few exceptions, find the same situation.”
Go beyond the scoreboard
Get the latest on L.A.'s teams in the daily Sports Report newsletter.
You may occasionally receive promotional content from the Los Angeles Times.