Bowl game executives paid handsomely despite COVID-19 money meltdown
The college football season of 2020 might go down in history as the worst to ever hit the postseason bowl game business.
Nineteen of those 44 games got canceled amid the COVID-19 pandemic. Most of the rest saw their revenues plummet from the year before as attendance was restricted to 25% of capacity or less while public health restrictions choked the flow of tourism. Many nonprofit bowl game organizations even turned to the federal government for relief, taking in more than $3.7 million in combined Paycheck Protection Program (PPP) funds in 2020, government records show.
But that didn’t stop many of the executives who run those tax-exempt bowl organizations from continuing to get paid handsomely, according to federal tax records from the bowl organizations obtained by USA TODAY Sports.
Some even made gains in compensation in 2020, prompting criticism as the first of 42 bowl games kicks off Friday with two on ESPN. The total compensation figures below include bonuses and benefits and are reported for calendar years, while revenues and expenses are reported for fiscal years:
►Peach Bowl CEO Gary Stokan had his compensation bumped up to $807,000 in 2020 from $792,000 in 2019 even as his organization’s revenues fell to $16 million in 2020-21 from $36 million in 2019-20, when it hosted a national semifinal playoff game. His organization also runs the Chick-fil-A Kickoff games, which were canceled in 2020 because of the pandemic. His base pay went up by $26,000 but his deferred compensation and bonus pay decreased by about $9,000.
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The Peach Bowl said in a statement that Stokan ‘passed along the entire amount of the salary increase to his staff in the form of personal checks.’
‘Peach Bowl, Inc. did not apply for, nor receive, a PPP loan at any point during the pandemic while other New Year’s Six bowls did,’ the organization said.
►Citrus Bowl CEO Steve Hogan runs two bowl games in Orlando, including the Cheez-It Bowl. His compensation increased to $740,000 in 2020 from $729,000 in 2019 while the combined payout for the four universities that participated in those two games each year dropped from $14.3 million in 2019-2020 to $8.4 million in 2020-21 “due to the ongoing COVID-19 pandemic,” according to its Internal Revenue Service forms.
Hogan said that is not the full story because he took a bonus pay decrease of $35,000 in early 2021, which hasn’t been publicly disclosed yet on IRS forms. He voluntarily disclosed that the next IRS filing will show his total compensation at $702,794 in 2021, a decrease of 5% from 2020.
Hogan’s organization, Florida Citrus Sports, also oversees a number of other events, including the annual Florida Classic football game between Florida A&M and Bethune-Cookman, which was canceled in 2020. His organization got about $600,000 in PPP funds each year in 2020 and 2021 to help pay more than 30 workers.
►Sun Bowl executive director Bernie Olivas had his game canceled in 2020, but his compensation increased to $208,000 from $195,000 in 2019. He said this was because of a car allowance he was given and noted he and his staff worked year-round like at other bowl businesses. His organization received $121,600 in federal payroll relief in 2020 as revenues for his organization plunged from $7.9 million in 2019-2020 to $684,000 in 2020-21.
►Sugar Bowl CEO Jeff Hundley’s compensation jumped to $869,000 in 2020 from $711,000 in 2019 after he was promoted to CEO in the middle of 2019, which accounts for his smaller pay that year. Hundley’s compensation also stayed about the same in 2021 – $865,000, similar to what the Sugar Bowl paid his predecessor in 2017 and 2018. Records show his organization got $330,800 in federal payroll relief in 2020 to help pay for 13 employees as revenue for the Sugar Bowl organization dropped from $16.6 million in 2019-20 to $10.8 million in 2020-21.
►Gator Bowl chief executive Rick Catlett’s compensation jumped to $1.3 million in 2020 from $307,000 in 2019, primarily because he was given a retirement sendoff after 29 years, which included a life insurance policy with a cash surrender value of $1 million and a Toyota van worth $52,000. His bowl organization transferred ownership of this policy to him that year, according to its chief financial officer. Without the policy and the van, Catlett’s compensation was about $241,000 in 2020.
His bowl organization received $146,000 in federal COVID relief in 2020 and again in 2021. Its revenues dropped from $10.1 million in 2019-20 to $5.6 million in 2020-21.
USA TODAY Sports tracked the compensation of 18 bowl CEOs who run a combined 20 nonprofit bowl games and found five of them had their compensation increased from 2019 to 2020, nine of them had their compensation cut by about 10% or less and four had slightly bigger pay cuts of 12% to 17% (see 2020 compensation chart below this story).
Of their 18 bowl organizations, at least 13 applied for federal payroll relief that was loaned and forgiven by the government, as was common for other businesses.
This has invited criticism, since these bowl organizations are tax-exempt nonprofits whose primary revenue comes from television rights fees, ticket sales and sponsorships. Executive compensation for these organizations is set by members of a board of directors that oversees them. Money that isn’t spent on executive pay theoretically could go to participating colleges and charities instead.
In many of these cases, compensation increased or decreased only slightly as college athletic departments were laying off employees, imposing pay cuts and reworking coaches’ contracts that year to reduce expenses during the pandemic.
“It highlights the exploitation of college athletes, in this case the football players who were getting sick all season long, who were prohibited from receiving any compensation,” said Ramogi Huma, executive director of the National College Players Association, which advocates for college athletes. ‘That prohibition creates excesses in compensation in other areas – coaches’ salaries, athletic director salaries. But this is one of the most egregious examples, for people who coordinate only one game a year to get paid that much money. It’s unjustifiable.”
Huma sees it as another example of the increasing amount of wealth coursing through the system of college football, to the benefit of administrators, coaches and schools, but not so much for the players, whose compensation from schools recently had been capped at the cost of attending college. Last year for the first time, they were allowed to receive compensation from third parties for use of their names, images and likenesses (NIL), but that was not allowed in 2020, the most recent year for which all of these IRS forms were available.
Bowl executives and the board members that oversee them see the situation differently.
‘It looks bad’
Of the 42 college bowl games this season, 22 are operated by nonprofit organizations, which are generally required by law to make certain public disclosures about the pay of the people running them.
The other 20 are owned by for-profit companies, including 17 owned by ESPN Events, which are private and not required to make such disclosures.
USA TODAY Sports contacted the five bowl organizations whose CEOs had their compensation increased in 2020, according to IRS forms. Each responded:
►The Peach Bowl is part of the New Year’s Six bowl games and has a contract with the lucrative College Football Playoff. The organization noted that in 2020, it ‘received the full salary, benefits and overhead as a part of our agreement with the CFP.’ It also noted the CEO’s compensation is set by a board compensation committee, and the increase was ‘predetermined and contracted prior to the pandemic.’
Its revenues fell from 2019 to 2020 in part because of the Kickoff game cancellations and the fact it didn’t host a more lucrative semifinal game in 2020.
‘Despite that fact, Peach Bowl, Inc. still contributed more than $5.7 million to charity and scholarship in 2020,’ the organization said. ‘In 2019, Peach Bowl Inc. donated $7 million to charity. Overall, Peach Bowl, Inc. has donated $60.9 million to charity since 2002, making it college football’s most charitable bowl game by a wide margin.’
►The Sugar Bowl sets its executive pay with the help of a compensation consultant and looks at what others are earning in similar executive positions, said Raymond Jeandron, chairman of the compensation committee for the Sugar Bowl. Hundley, the current CEO, was promoted to that position in the middle of 2019 after longtime Sugar Bowl boss Paul Hoolahan retired that year with $1.7 million in compensation, most of which was because of his retirement package, Jeandron said.
“For a lot of reasons, it was a more difficult year for Hundley than a normal year,” Jeandron said of 2020. “We didn’t know if we were going to have a game. We had expenses we were committed to but weren’t sure what the revenue was going to be, so there was a lot of hustling going on by Mr. Hundley and the staff. We just felt the compensation level that we put up there was appropriate.”
Jeandron noted Hundley helped host the College Football Playoff national championship game in New Orleans in January 2020, before the pandemic hit the U.S. He said part of Hundley’s pay was to reward him for that, in addition to his regular duties running the Sugar Bowl organization. Of Hundley’s $869,376 in compensation in 2020, $150,000 was for bonus pay and incentives, according to its IRS form. Jeandron also noted the Sugar Bowl organization sponsors dozens of other events throughout the year besides the Sugar Bowl game and has more than a dozen employees.
It applied for PPP funding to pay that staff.
“It was important for us to keep them in place,” Jeandron said. “We wanted to make sure we had adequate funds to compensate them.”
►Hogan, who runs the two bowl games in Orlando, said he took his $35,000 pay reduction in early 2021, which came at the end of his organization’s fiscal year from April 2020 through March 2021. The IRS form for that fiscal year only includes his compensation from the 2020 calendar year, as required. The IRS form showing his compensation for 2021 – and his 5% pay decrease – hasn’t been filed yet, he said.
Hogan notes his organization is different from other bowl organizations with the number of bowls and types of activities it oversees. Despite a reduction of attendance capacity, he also noted his organization did relatively well with the payouts it gave to its teams.
‘We’re proud of the amount of money we were able generate for our partners,’ Hogan said.
►Longtime Sun Bowl executive director Olivas gets paid modestly by bowl executive standards but saw his compensation increase from $195,000 to $208,000 primarily because he received a car allowance, he said. Even though his game was canceled in 2020, he and his staff were still working the rest of the year, he said.
“It looks bad, but I’ve never asked for a raise,” he said. “They gave me a car allowance, because my original contract allowed for that, and I hadn’t gotten one. We do more than a football game. It wasn’t football money given to me. We have a basketball tournament, flag football tournament. We have all kinds of events.”
The $121,600 in PPP funds received by his organization in 2020 and $114,000 in 2021 was to help pay for his staff of about six.
It was “so I wouldn’t have to let them go,” Olivas said. “We were still working, even during COVID.”
His compensation in 2021 was about the same as 2020: $207,000.
USA TODAY Sports also asked other bowl organizations for IRS forms showing executive pay in 2021, but most said they hadn’t been filed yet. The ones who did provide them showed roughly similar or increased pay for their CEOs from 2020.
►Catlett of the Gator Bowl ranks first with the highest compensation among nonprofit bowl directors in 2020 at $1.3 million, but this is because of the timing of Catlett’s retirement and the package he got for it, said Robert Leverock, the chief financial officer of Gator Bowl Sports.
‘Nothing in (Catlett’s retirement package) came from PPP,’ Leverock said. Gator Bowl Sports applied for PPP funds because it needed help, he said. ‘We were like everybody else.’
Cotton Bowl Athletic Association CEO Rick Baker ranked second among nonprofit bowl executives with $1.1 million in compensation in 2020, down by $24,000 from 2019. His base pay went up from $611,000 in 2019 to $875,000 in 2020 while his bonus pay went down from $385,000 to $77,000. His organization said it did not apply for PPP funds.
Other bowl executives took similar pay cuts in 2020, but none exceeded the 17% cut taken by Pasadena Tournament of Roses Association CEO David Eads, whose compensation dropped from $458,000 in 2019 to $379,000 in 2020.
The Rose Bowl example
Of all the bowl games, the Rose Bowl sticks out for many reasons. It is the oldest, having started in 1902. It pays its CEO modestly by bowl game standards. The Pasadena Tournament of Roses also brings in by far the most revenue of all nonprofit bowl organizations with more than $107 million in 2020-21, up from $102 million the previous year. That came despite having to cancel its Rose Parade and move the Rose Bowl national semifinal game to Texas.
“When the pandemic hit, we went into financial planning and began reducing expenses immediately, not knowing if we could host a parade or a game,” said Jeff Allen, chief financial officer of the Pasadena Tournament of Roses.
He said the uptick in revenue was related to higher TV rights fees for hosting a national semifinal. The organization also got $553,000 in PPP funds to support 33 jobs. On the expense side of the ledger, Allen said his organization made cuts through furloughs and layoffs.
Total compensation for an organization that employed 37 people in 2020 went down from $4.2 million to $3.8 million, according to its IRS form for 2020-21.
In 2021, Eads, the CEO, had his compensation increased to $453,000, close to where it was in 2019.
The compensation of bowl executives long has been the subject of criticism, mostly because of the perception that their primary job is to put on one or two games per year, which bowl organizations say is unfair.
By comparison, many Division I college athletics directors make less money running year-round programs and games in multiple sports.
By another comparison, the American National Red Cross took in revenues of $3 billion in 2020-21 and had nearly 18,000 employees in 2020. Its top executive compensation in 2020 went to chief operating officer Cliff Holtz, who received $781,120, including $583,938 in base pay. That’s less than six top bowl executives, including Catlett, Baker, Hundley, Stokan and the executives of the Fiesta Bowl in Arizona and ReliaQuest Bowl in Tampa.
“A nonprofit, in theory, should determine appropriate compensation for an organization’s leader by researching the market rate for someone with the relevant education, skills and experience needed to competently perform the job at hand,” said Laurie Styron, executive director of Charity Watch, a charity watchdog.
Congress has set $1 million as an excessive-pay threshold of sorts for nonprofit organizations. The government penalizes those that pay certain executives more than $1 million by taxing them at a 21-percent rate on compensation above that threshold, according to the tax reform law that went into effect in 2018.
Otherwise, it’s generally up to each organization’s oversight board and related subcommittees. The Sugar Bowl’s IRS form notes that its compensation committee relies on an “independent compensation survey” prepared by an outside consultant, which is common among these bowl organizations. This consultant provides a report to the bowl’s compensation committee, which reviews the report and makes a recommendation on pay to the executive board, which sets the pay amounts.
Such surveys have their own potential flaws, however.
“In some cases, there is circular reasoning applied where a nonprofit working in a particular cause may look at the compensation levels of the leaders at other nonprofits working in that same cause to justify higher pay for its own leader,” Styron said. “This is often done even in cases where someone competent could be found to do the job for far less.”
Bowl executives long have said their jobs are year-round and include sponsoring or running multiple other, smaller events as they work to help drive tourism and economic impact to their cities during the holiday season.
“Does it pay well? Yes,” said Gary Cavalli, former executive director of the now-defunct bowl game in San Francisco. “But it’s harder, much more involved, much more stressful than I think the average person would think.”
So then what might bring stress to a bowl CEO on a Tuesday or Wednesday in March, long after the bowl season is over?
“March and April is usually when you finalize your deals with the TV network and with the schools,” Cavalli said. “What date is my game going to be on this year? Believe it or not, you can have 10 different discussions in meetings with ESPN over what time your game is going to be on and what date your game is going to be on. And sometimes you’ve got to lobby real hard.”
Sometimes hard decisions are necessary, too, especially when revenues suddenly shrink. Cavalli knows this after losing a title sponsor one year and hitting other financial challenges after that.
At one point, he said he went to the board that oversees him and volunteered to take a pay cut. His compensation dropped to $228,000 in 2015, including $148,000 in base pay, down from $315,000 total and about $241,500 in base pay the year before, according to IRS forms.
“I had to cut expenses dramatically, so I thought, ‘What am I going to start with?’ ” said Cavalli, who retired after his 2015 game. “I’m going to start with myself. To me that was the only fair way to do it. That’s just an example of how one person handled it. I would have done the same thing (in the pandemic).
‘I’m not trying to make myself out to be a saint here. That’s just how I view it. If you’ve got to cut, you’ve got to start with yourself.”
Follow reporter Brent Schrotenboer @Schrotenboer. E-mail: firstname.lastname@example.org