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  • September 6, 2023
  • Chuck Osborne

Killing the Golden Goose

We just celebrated Labor Day, the unofficial end of summer and the official beginning of the college football season. I have always loved college sports – there is something special about them that the professional games just cannot touch. They are in trouble, however, from a disease we know all too well in my business: Greed. The irony of greed is that it ends up killing the goose who lays the golden eggs.

My freshman year at Wake Forest, we played the University of North Carolina (UNC) at home for the 100th matchup of the two teams in football. Wake won, and the first person I called when I got back to my room (there were no cell phones) was my brother, who had gone to UNC. A little trash talk was in order.

The state of North Carolina was a great place to go to college because there are four major universities, all rivals, within 70 miles of each other. In days gone by, the men’s basketball season would start with what was called the Big Four Tournament in which UNC, Duke, Wake, and North Carolina State (or just State in NC) would play each other. This meant that these teams often played three times in the regular season, and in these rivalries, anything could happen. Today everyone talks about UNC and Duke, as they have had the most basketball success over the last several years, but it wasn’t always that way. State was the first basketball powerhouse in North Carolina, and when I was a kid, State vs UNC was considered the biggest of the rivalries.

Wake has had its moments as well. Although not as successful as the other three (Wake is the only North Carolina school without multiple basketball championships), these are still rivalry games. Duke came to Wake as the number-one team in the country twice when I was at Wake, and left both times with the agony of defeat. (They lost the other two years as well, but they weren’t number one at the time.) 

The thing that made it so fun was the proximity. When one attends one of these four schools there is a significant chance that siblings and friends are at one of the other three. For example, I was the fourth of my cousins to attend Wake for either undergrad or law school, and there’s my aforementioned UNC brother. I have a cousin who graduated from State and married a UNC grad, and I had an uncle who went to Duke…I dropped by his house for a visit after we beat that number-one team.

This is the magic of college sports. All the best rivalries are built mostly by proximity. Alabama and Auburn, Ohio State and Michigan, Georgia and Florida. It’s a big deal because it is full of tradition, and we know that the outcome of these games will either allow us to gloat to family, friends, and co-workers for an entire year or doom us to listening to them.

This popularity leads to an unsavory side effect: money. According to CBS Sports, schools in the SEC each get $49.9 million a year from sports. The goose is laying golden eggs, and just like the fable suggests, there is a stampede to see who can kill that goose the fastest. The PAC 12 conference has imploded and now Stanford, University of California, Berkeley (Cal), and Southern Methodist University (SMU) are joining the Atlantic Coast Conference (ACC). After all, who doesn’t immediately think of Stanford when someone mentions the Atlantic coast…

I didn’t get to watch much football this past weekend. My wife’s cousin hosted his daughter’s wedding reception, and we traveled to Raleigh for the festivities. He graduated from Virginia Tech, also in the ACC. I asked him jokingly if he was excited about the new rivalry with Stanford? His answer was a short, “No.”

In their greed the remaining college conferences and the member university presidents are destroying everything that makes college sports unique. This is just the latest realignment, as it has been going on for some time, and I would argue that it proves my point. Boston College joined the ACC some time ago. I grew up in the south and am no expert of Boston College history, but I remember their football team upsetting Miami, and their basketball program making deep runs in the NCAA tournament.

Now they struggle, and why wouldn’t they? What kid growing up in New England dreams of one day playing against Georgia Tech? They want to play other schools in the Northeast that their friends, family, and neighbors attend. They thrived in the old Big East and now they dwell in the bottom of the ACC. Arkansas was a strong member of the old Southwest Conference. Maryland won national championships when they were in the ACC. Miami was a football powerhouse pre-ACC membership. Each one of those schools killed their goose.

This year Wake won’t even play UNC in football, but Wake will go to Notre Dame? How much attention do you pay to the classic fables: A farmer had a goose that laid one golden egg every day. At first he was thrilled, but over time he wanted more. He decided to cut the goose open and get all the eggs at once; when he did so, there were no eggs inside, and now his goose was dead. Greed is a deadly thing. That is certainly true in investing, and nowhere is it as evident today than at our universities. At least that is my perspective.

Warm regards,

Chuck Osborne, CFA
Managing Director