Hoopraker

The story is an increasingly familiar one. Facing criticism from fans, alumni, boosters, and the media class, an athletic director capitulates to the most superficial elements of the peanut gallery, snow-jobs the president and the budget director, and makes a budget-busting hire that has glamorous curbside appeal.

Down The Rabbit Hole

Just as there is a certain species of American clown who thinks his stop-and-go morning commute is best conducted in a gas-sucking mock race car that he never gets out of second gear, today’s athletic directors often decide the only way to compete is by writing big checks and making fat promises to coaches, many of whom bring immediate PR shine and sometimes more wins, but at a huge cost and considerable collateral damage. To wit, many of these coaches arrive with a mercenary orientation that, like their overstuffed contracts, is disproportionate and antithetical to both the institution’s fiscal health and overall well being.

The expensive is best fallacy, enacted in varying degrees in too many athletic departments, has telltale markers. It starts with a coach whose salary exceeds the next highest compensated university employee by an exponential margin. And often before the ink has dried on the contract and well before the coach has demonstrated either loyalty or job effectiveness commensurate to salary, the coach begins to produce quotes about the program’s need for a new, state-of-the-art arena and/or practice facility. It’s the price of success says the coach. Show me the money.

Next the admissions office is asked to relax its standards for recruits, and once on campus, these special dispensations are secreted away in newly erected basketball dorms. Every odd year there is player disciplinary scandal that escapes the program’s damage control. Every even year a high school AAU coach is named as a new assistant coach, bringing with him his prized basketball pupil. As the offense loosens from coach to player controlled, the number of NBA scouts and agents invited to practice and attending games doubles, then triples. It’s the only way to win says the coach. Give me a raise or I’ll go coach the Orlando Magic.

Soon the coach is using his privileged, tax exempt university platform as a vehicle for high ticket corporate speaking engagements and appearances in American Express commercials. The arena’s naming rights are sold to a corporate entity whose logo gets splashed from baseline to baseline, scoreboard to press row, rafter to center court. Round and round they go in the green-eyed pursuit of flush.

Wins….But

And, yes, sometimes all of the above is also accompanied by increased win totals and the erection of Elite Eight and Final Four banners if not the top prize. The fans are cheering, pumping fists, and dressing their children in team jerseys. But still, somewhere in the belly there is an unease that is the result of more than the $7 dollar stadium nachos. The nagging, empty feeling is the result of a system that is producing coaches and programs where history, tradition, and the institution itself is bunk and the buck is king. Where integrity is sacrificed for a win at any cost mentality.

And, most disturbingly, it is a system where the university and its students, most of whom neither participate or benefit from athletics beyond its not always inexpensive entertainment value, are, as the thorough study here suggests, the ones footing the bill for the reckless spending:

“When athletic departments lose money, they often raise student fees to cover the deficit or dip into the university’s general fund. For example, when the University of California at San Diego went $300,000 into the red this past academic year, its student-affairs department covered the shortfall, and the school put an increase to student fees on the table. Students will vote in a referendum to raise the fee this fall. Similarly, Colorado State University, which expects an annual deficit in its athletic department of $1 million in coming years, is looking to raise what students pay into the sports program from $53 a semester to $68 a semester, bringing in an additional $720,000 each year.”

Another fallacy often forwarded by those alienated from the facts and those eager to rationalize the rampant expenditure is that all the big spending begets big profits for the universities. Quite to the contrary, the lion’s share run athletic programs that annually run in the red:

But as programs vie to outspend one another, many go deep into the red, forcing schools to raise student fees and seek new sources of support. (Texas is a rarity: its program is self-sufficient and usually runs in the black.) Indeed, although many schools have increased revenue by adding premium seating and charging for seat licenses and ticket guarantees, they haven’t improved their financial positions much, if at all. Unlike in the corporate world, most universities don’t bother to track the returns on their sports investments beyond the win column. Despite the myth of massively profitable college-sports franchises built on the backs of unpaid players, only a handful of athletic programs manage to break even without university or student-fee subsidies.

According to an analysis by the Indianapolis Star newspaper of the 2004–05 budgets of 164 public universities, just 9 percent of these Division I schools had athletic departments that were able to support themselves. The rest received a total of more than $1 billion in student fees, general school funds, and other subsidies. Without the financial assistance, the average school would have lost $5.7 million, according to the Star.

Furthermore, the idea that football and basketball are “cash cows” and therefore worthy of big spending is another convenient myth:

Worse, spending on the cash cows of men’s football and basketball doesn’t necessarily generate an incremental increase in revenue. According to an NCAA study commissioned in 2003, an increase in operating expenditures of $1 on football or men’s basketball in Division I-A was associated with additional revenue of just $1. In other words, increasing spending, even on the profitable sports, has yielded no return on investment at all.

The Big Ten Side Of Things

In a climate of profligate athletic spending that threatens the balance of what is still, at least on paper, amateur athletics in a setting that should be primarily about higher education, the Big Ten is a mostly commendable realm of fiscal restraint. As Myles Brand posits here, it is incumbent on the individual schools and conferences to self-regulate amidst the rampant spending.

According to the Office of Postsecondary Education’s Gender Equity reporting, the Big Ten’s men’s basketball programs’ 2006-07 annual expenses fell within a reasonable range against revenue:

• Illinois $4,542,338 total expenses against $12, 237,388 revenue
• Indiana $4,942,257 against $12,288,500
• Iowa $5,718,590 against $10,274,661
• Michigan $5,299,018 against $7,536,902
• Michigan State $6,407,390 against $13,225,963
• Minnesota $2,925,666 against $11,388,92
• Northwestern $3,442,355 against $6,424,782
• Ohio State (Not Reported) against $12,898,413
• Penn State $3,645,693 against $5,642,120
• Purdue $3,684,697 against $9,565,497
• Wisconsin $5,315,234 against $14,332,269

And as a point of comparison, the highest expenditured basketball program in the nation:

• Duke $8,010,066 against $13,410,114

The Big Ten’s numbers above, while not the full picture, at least give the impression of budgetary sanity. Of course, it must be acknowledged the conference harbors three of the highest paid coaches in the country in Tom Izzo, Thad Matta, and Tubby Smith.

The former runs a program that he, along with his mentor Jud Heathcote, built from his days as an assistant beginning in 1983 to today. His program’s success, financial and otherwise, has been earned over the long haul and to great mutual benefit with the university that employs him. Never do you see Izzo making himself larger than Michigan State. The NBA has made overtures, but seldom if ever has Izzo been the one doing the courting. Even so, it isn’t unreasonable to wonder, perhaps like some of the world class professors working on campus, if Izzo’s $1.8 million per annum is a bit excessive. As our esteemed colleague in the Twin Cities ponders, when is enough enough?

Matta (and Kelvin Sampson) certainly brushes up against some of the troubling symptomology of the win at any cost problem, but he is fortunate to be in one of the few athletic departments in the country that run in the black.

While it is too early to pronounce a verdict on Smith’s leadership of the Gopher program, one hopes for the sake of Joel Maturi and the undergraduates of Minnesota, that his salary, bloated as it is, isn’t joined by spendthrifty abandon and erosion of institutional values. His productive, classy tenure at Kentucky, an institution whose alarming basketball-centricity would’ve given him every opportunity to cut corners and grandstand do bode well.

A Matter Of Degrees

These are but a few of the prevailing trends. Admittedly, most Division I programs, even ones that are generally well administered, exhibit negative pathologies. But, there are certain programs where the problems cited are defining characteristics rather than isolated events.

And it requires vigilance and strong institutional leadership for the generally upstanding programs to resist the downward pull. Otherwise, the tenuous balance of Division I athletics between market forces and higher education amateurism will teeter, perhaps irrevocably, into the abyss.

Posted by DJ Elsass on Thursday, December 20th, 2007 at 11:29 am.