Alabama A&M and Alabama State play before a packed house at Legion Field.
Alabama A&M and Alabama State -- the Historically Black Colleges and Universities (HBCU's) who generate millions of dollars by playing each year in the Magic City Classic football game at Legion Field in Birmingham -- have signed an agreement that extends their relationship with White-owned promotion and event-management companies from 2023 to 2026. Those are the same promoters who managed the event from 2017 to 2023 and took dubious actions that appeared to short-change the schools that generate the significant cash flow from the No. 1 annual football Classic involving HBCU's.
Alabama A&M had been holding out on reaching a new agreement for about a year, but the two schools announced the extended deal yesterday. Donald Watkins, longtime Alabama attorney and sports enthusiast, calls the deal "terrible" and a "classic sellout." Under the headline "Alabama A&M Abandoned Its Superior Bargaining Power and Surrendered to Magic City Classic Promoters," Watkins writes:
After a year of refusing to sign a new four-year agreement with the Alabama Sports Council to promote the annual Magic City Classic, Alabama A&M University (AA&MU) ended its holdout and announced a new deal Tuesday.
Despite numerous red flags regarding the manner in which the Alabama Sports Council and Gene Hallman’s Bruno Event Team managed the finances associated with the Magic City Classic from 2017 to 2022, Alabama A&M abandoned its superior bargaining power and surrendered to the dominion and control of the Council and Gene Hallman for the next four annual Magic City Classic games.
It was a classic sellout of a historically black university's power to leverage its strong business advantage in a very profitable sports deal. Furthermore, this sellout financially benefits one of Alabama U.S. Sen. Tommy Tuberville's acolytes -- Gene Hallman -- in a very big way.
Alabama A&M and Alabama State should have held the upper hand in negotiations, but they failed to take advantage of it, Watkins reports:
The Magic City Classic is the largest Black college football Classic game in America. It is also the largest sports event produced and managed by the Alabama Sports Council and the Bruno Event Team (now known as Eventive Sports). The Classic accounted for 66% of the Council’s reported revenues in 2021.
These factors, together with many others, placed Alabama A&M in a superior bargaining position. However, the university gave away all of its bargaining power yesterday because it lacked the confidence, preparation, and courage needed to convert its contract-negotiating leverage into maximum financial payouts from Magic City Classic events.
Why did the HBCUs fail to negotiate from a position of strength? It appears they caved to pressure that was coming from a variety of directions, causing them to leave big money on the table, Watkins writes:
Alabama A&M signed a new agreement with the Alabama Sports Council without demanding that the Council and Eventive Sports:
1. Pay AA&MU an upfront signing bonus of at least $2 million, in addition to the guaranteed game-day payout each year.
2. Submit to a financial audit by a certified sports-accounting firm for each Magic City Classic, from 2017 to 2022, and for each Classic, from 2023 to 2026.
3. Guarantee that ASU and AA&MU, as co-owners of the "Magic City Classic" trademark, will split 80% of all monies generated by the promoters from Classic-related events, net of capped management fees and expenses pre-approved by the designated "home" team for each year.
4. Guarantee AA&MU a minimum $1.5-million payment each year, whether the university is the “home” or “visiting” team. This minmum payment would be in addition to any support money provided directly to the universities by the city of Birmingham and Jefferson County.
5. Guarantee ASU and AA&MU "preferred vendor pricing" for all expenses where Alabama Sports Council and/or Eventive Sports procures goods and services for the Magic City Classic using their known discounted "wholesaler" purchasing power.
The Magic City Classic has become a modern, highly popular, and profitable enterprise. It is an Alabama event, with a nationwide audience and big-time exposure, including a TV deal with ESPN. But the participating schools seemed to have torn a page from the negotiating playbook of yesteryear. Writes Watkins:
When aggressively marketed nationwide and properly managed with tight financial controls, constant oversight, strict accountability, and full transparency, the Magic City Classic can easily generate the dollars needed to make these payouts.
ASU and AA&MU signed a terrible new Magic City Classic deal with the Alabama Sports Council for 2023 to 2026. They clearly do not know how to negotiate football Classic deals in the modern era.
To this day, neither ASU, nor AA&MU, has independently verified how much money the Alabama Sports Council and Bruno Event Team made from the 2017 to 2022 Magic City Classic events. The financial books and records from the 2017 to 2022 Classic events have never been properly audited by certified sports-accounting firms for the benefit of these two participating universities.
The Alabama Sports Council and Bruno Event Team have clearly established their dominion and control over ASU, AA&MU, the city of Birmingham, and the Jefferson County Commission with respect to all financial aspects of the Magic City Classic. None of these government entities had the nerve to demand an audit of the monies generated and spent in connection with past Classic events before ASU and AA&MU signed the new agreement.
Throughout the contract negotiations with the Alabama Sports Council, ASU and AA&MU never exhibited the confidence, preparation, or courage necessary to win a great financial deal as the registered co-owners of the "Magic City Classic." As they did from 2017 to 2022, ASU and AA&MU will play in the Magic City Classic from 2023 to 2026 for what amounts to “pocket change” or "tip” money in the "Super Bowl" of HBCU football.
How did the schools reach an extended agreement with the same promotion/management entities that had previously caused them concern? Watkins seems baffled by that question -- and many of the HBCUs' students, alumni, staff, and patrons likely share his perspective. Watkins writes:
For reasons that are hard to understand in today's business world, HBCUs in the "Old South" knowingly and willingly subject themselves to financial exploitation by promoters in Classic football games. These universities typically conduct their negotiations with the promoters under the dark cloud of an inferiority complex that neutralizes their bargaining power.
To be clear, the new Magic City Classic agreement is NOT the product of White racism. It is the product of ASU's and AA&MU's lack of confidence in themselves and inadequate preparation for negotiations, coupled with a healthy dose of institutional cowardice.
Watkins sizes up the situation and declares "winners and losers" from the new deal. It's pretty clear who belongs in which category. And the Magic City Classic outcome suggests Alabama A&M also will be a loser in a financial matter of huge significance, with the state of Alabama owing A&M more than $527 million due to funding shortages affecting land-grant institutions in 16 states. Writes Watkins:
The Magic City Classic financial sellout is not the fault of the sports promoters involved here. In multi-year contracts negotiations, these promoters are expected to seek the best deal for themselves. The Alabama Sports Council and Eventive Sports are clearly big "winners" in the new Magic City Classic deal.
The city of Birmingham is also a "winner" of sorts, to the extent that the Magic City Classic will be played in the old, outdated, and structurally dangerous Legion Field in Birmingham for the next four years. At the same time, $90 million of the city's neighborhood improvement money is paying for a new downtown stadium for University of Alabama at Birmingham football. That's a great deal for UAB, which used tax money earmarked for improving poor Birmingham neighborhoods to pay for a new stadium that UAB cannot fill up with fans on game days.
The presidents and trustees of Alabama State and Alabama A&M must take full and sole responsibiliry for creating this embarrassing lose-lose Magic City Classic situation for their respective universities. In the eyes of the sports world, sports financing institutions, and the general public, ASU and AA&MU are big "losers" in this new financial deal. The old Jerry Maguire saying,"Show me the money," meant nothing to these universities.
ASU and AA&MU handled the financial dealings associated with the new Magic City Classic agreement like they were beggars in a charity line, rather than power players in a highly profitable college football Classic event.
Now, we know for sure that Alabama A&M will NEVER get the $527,280,064 the state of Alabama has owed the university since September 18, 2023. If the university folded under the pressure from the Alabama Sports Council and Gene Hallman over a multimillion-dollar football Classic deal, Alabama A&M will NEVER muster up the courage to ask Gov. Kay Ivey for its $527,280,064.