Presidents Favor Reining In Athletics Costs but Feel Powerless to Effect Change

October 26, 2009

A majority of college presidents at the nation's largest athletics programs favor sweeping change to contain the escalating costs associated with big-time college sports, but are hard-pressed to identify an entity that can achieve it.

Those are among the key findings of a new report on the financing of major-college athletics programs that was issued on Monday by the Knight Commission on Intercollegiate Athletics. The report was based on a survey of 95 college presidents in the National Collegiate Athletic Association's most competitive grouping and was conducted last spring. The report also includes comments based on interviews with nearly a quarter of the campus leaders surveyed.

The respondents said that while major changes were needed, presidents had limited power to control the rising expenses of sports on their own campuses and at the national and conference levels.

"The real power doesn't lie with the presidents," one leader said in the report. "Presidents have lost their jobs over athletics. Presidents and chancellors are afraid to rock the boat with boards, benefactors, and political supporters who want to win, so they turn their focus elsewhere."

Those sentiments are dire news for the commission, which pushed strongly in the 1990s for a shake-up of the NCAA's leadership to put college presidents, not athletic directors, in charge.

Gerald R. Turner, president of Southern Methodist University and a co-chair of the commission, said he understood the presidents' dilemma.

"They don't believe their own actions independent of other presidents … can be effective," he said during a news conference on Monday afternoon. "Until they can feel that their conference has a unanimous sense of the issues, there's some sense of pessimism about reform."

Growing Divides

The 51-page report, released in conjunction with the commission's meeting in Miami, touches on many pressure points. The group will use the findings as the foundation for a longer report it plans to release next year.

Nearly all of the presidents surveyed said coaches' salaries in the sports of football and basketball were "excessive." They lamented a growing cultural divide between athletics and the academic side of the university, and fretted over the widening gap between wealthy athletics programs and those struggling to keep up.

Nearly eight in 10 presidents said they wanted greater transparency in the revenues and expenses associated with athletics. And while many said they were frustrated with the NCAA and its many rules, they nonetheless expected the association to play an important role in gathering additional information on finances.

Yet despite their uneasiness with rising costs—the median operating budget in Division I-A athletics departments grew by 46 percent from 2004 to 2008, to $41-million—and the growing impact of commercialism, the presidents said they were reluctant to scale back. Instead, most favored finding new sources of revenue to field competitive programs that bring attention to their universities.

Mr. Turner called that response "wishful thinking."

William E. Kirwan, the commission's other co-chair, agreed that more revenue was not going to solve the problem.

More effective, he said, would be fundamental changes in the financial model for big-time college sports. "The fiscal circumstances that our nation and our states find themselves in will provide momentum for this change," said Mr. Kirwan, who is chancellor of the University System of Maryland. "The difficult time that our universities are experiencing isn't going to go away in the short run."

Salaries Seen as Biggest Threat

Many presidents said they viewed the spike in coaches' compensation as evidence of a system that had spun out of control. In 2008, the median salary for head football coaches in Division I-A was more than $1-million, according to recent NCAA data. For head coaches in men's basketball, that figure was $735,000.

Eighty-five percent of the presidents surveyed said the salaries were "excessive," and many said the wages were the greatest impediment to long-term sustainability their programs faced.

But confronted with pressure from alumni and boosters to field winning programs, and lacking any clear legal authority to curb the salaries, most presidents said they paid up anyway.

"Show me a president who won't meet the demands of a winning coach who has the chance to walk out the door for a higher salary someplace else," one president said.

Many campus leaders said the NCAA's failed attempt in the 1990s to restrict some coaches' salaries gave them little confidence that future regulation was possible. (A federal-court decision, upheld by the U.S. Court of Appeals for the 10th Circuit, struck down an NCAA policy that had capped the earnings of assistant coaches as a violation of antitrust laws, and the association later settled the case for $54.5-million.)

One solution would be for Congress to grant the NCAA an exemption from antitrust laws and allow it to restrain spending in college sports. But most leaders surveyed said they felt that was politically unlikely, if not impossible.

The dominance of television contracts in determining the cash flow, as well as the rhythm, of college athletics also troubled the presidents, particularly those at colleges outside the six Bowl Championship Series conferences. Some said they were concerned about the impact of the networks' scheduling demands on their institutions, but felt unable to change because of the sheer amount of money those contracts bring in.

Disparate Cultures on Campuses

Most presidents said they wondered how long the current model for college sports—reliant on revenue from robust ticket sales, lucrative media contracts, and private donations—could be sustained.

"It seems sustainable at the moment, but it is dependent on so many things," said one president. "It's good that our athletic department supports itself, but the links between sports and private support are worrisome if our teams don't continue to be competitive. … There are so many variables."

Said another president: "We'll get to the point where we literally can't do it. And we're one of the rich schools. TV contracts won't continue to grow. The money will cut itself off."

Some presidents said they were concerned about the stark differences on their campuses between what the athletics program, bolstered by television money and private donations, can afford—and what the rest of the university can.

"The athletic association has more money and disposable money than it has ever had," one president said. "On the academic side there is less flexibility at any time since World War II. This creates very disparate cultures. Athletics can spend and do whatever it wants to do, and the academic core of the campus, which is operating under much greater constraints, sees that.

"The rationalization of those two cultures," the president continued, "is one of the most difficult things we face."

Bridging the gap between those two worlds is increasingly difficult, leaders said.

"I'm one of the … presidents with enough seniority to see the consequences," said one. "The presidents who have had their heads handed to them? A high percentage of them had that happen because it was something to do with athletics."

Yet despite their complaints, the presidents offered few solutions.

The commission floated several ideas, such as reducing the number of coaches and other sport-specific personnel for revenue sports, and changing the NCAA and BCS policies on revenue distribution. (Both proposals received support from two-thirds of the presidents surveyed.)

"I think there are a lot of heads in the sand," one president said. "A lot of presidents don't get as deeply into it as they need to."