Disarming Big-Time Sports Spending

WASHINGTON – In the wake of conference expansions largely predicated on lucrative television contracts, the Knight Commission on Intercollegiate Athletics called Thursday for a new set of financial reforms in big-time college sports.

June 18, 2010

WASHINGTON – In the wake of conference expansions largely predicated on lucrative television contracts, the Knight Commission on Intercollegiate Athletics called Thursday for a new set of financial reforms in big-time college sports.

The watchdog group released a report containing a series of recommendations for reining in escalating spending on college athletics. The report comes on the heels of a commission survey of college presidents conducted last fall, which revealed that most presidents consider themselves powerless in their individual ability to hold athletics spending in check.

The report notes that, from 2005 to 2008, median spending on big-time college athletics has ballooned nearly 38 percent, while spending on academics only grew 20 percent. Additionally, it notes that, in the major conferences, median athletics spending per athlete is from 4 to nearly 11 times greater than the spending on “education-related” activities per student.

“This report is particularly timely given the commercially driven agendas of conference realignments that have dominated the news in just the past week,” said William E. (Brit) Kirwan, co-chairman of the Knight Commission and chancellor of the University System of Maryland. “There is every reason to believe that the direction the major programs are headed in will lead to further escalation in athletics spending and even greater imbalances in the fiscal priority for athletics over academics.”

Chief among its recommendations, the Knight Commission suggests that the financial reports filed by each institution with the National Collegiate Athletic Association be made public with measurements comparing athletics and academic spending among peer institutions. The report argues that current public reports filed with the Education Department in compliance with the Equity in Athletics Disclosure Act of 1994 “lack comparability” because the law allows institutions to “report information in overly broad categories.” Though acknowledging that the NCAA’s standardized reports are “not perfect,” the report argues that they “represent the most accurate athletics financial report available.”

“Academic reform in intercollegiate athletics began in earnest when graduation rates were first shared publicly,” Kirwan said. “We believe the same will be true for financial reform when there is far greater transparency on athletics expenditures.… Nearly all athletics programs rely on institutional funds to balance their budgets. These budgets can have a big-time impact on college students, and financial data ought to be transparent and readily available to students, parents, trustees and taxpayers who have a stake in the spending.”

Though public institutions are often bound by public records laws to release such NCAA spending data, private institutions are less than forthcoming. The Knight Commission report cites information about college athletics spending gathered and published in a searchable database by USA Today this year; however, the 17 private institutions within the Football Bowl Subdivision (formerly Division I-A) and three “state-related” public institutions in Pennsylvania (Pennsylvania State University, Temple University, and the University of Pittsburgh) did not provide these reports for the study.

Southern Methodist University, whose president, R. Gerald Turner, is the Knight panel's other co-chairman, is one of the institutions that did not provide financial data to USA Today. Other private institutions with which other Knight Commission members are affiliated – including Duke University, Georgetown University, the University of Miami, Northwestern University, the University of Notre Dame and Stanford University – also did not disclose their athletics spending.

Acknowledging his own institution’s lack of participation in data collection on athletic spending, Turner said it will be hard to motivate private institutions to provide some level of financial transparency

“It’s going to take a good number of private schools to reform this,” Turner said. “[Southern Methodist] will be one that leads out on this, but we need to get private school organizations and conferences to be involved. Again, one institution is not going to make this. Just like on all the other things, it’s going to take a group effort.”

The Knight Commission also recommends that the NCAA meaningfully reward institutions whose athletes achieve academic success. For example, it suggests that the NCAA more readily ban teams that earn a poor Academic Progress Rate (APR) – a score based on the eligibility and retention of each player on a team for a four-year period. Postseason play, it argues, should be a privilege and not a right – a stance championed by Education Secretary Arne Duncan earlier this year in his address before the NCAA.

Currently, the NCAA bans teams from postseason play only if their APR is below a certain benchmark for three consecutive years; this penalty has been levied against just four teams. The Knight Commission believes all teams that have an APR below the established benchmark should be banned from postseason play immediately – not after three years of being below this standard.

“The commission believes that the current standards remain too low and that it takes far too long – typically several years – for postseason bans based on poor academic results to be enforced,” Turner said. “Now, it’s time to finish the job. The commission strongly believes tournament slots, and the financial rewards that accompany them, should be reserved for teams that meet legitimate academic standards.”

If postseason bans do not inspire academic improvements, then the Knight Commission believes financial incentives will do so. It calls for the NCAA to establish a new revenue distribution fund it has named the “Academic-Athletic Balance Fund.” Money within such a fund would be distributed to institutions whose APR scores “predict at least a 50 percent graduation rate,” and it would be drawn from funds currently awarded for success in the men’s basketball tournament. The Knight Commission also calls for a similar fund to be created solely for Football Bowl Subdivision teams by redistributing a portion of Bowl Championship Series (BCS) revenue using these same criteria. The institutions that make up the BCS would have to institute this change in revenue distribution, since the NCAA does not control these funds.

This recommendation, however, comes days after it was announced that the University of Texas at Austin would remain in the Big 12 primarily because it will receive a larger financial payout than some of the other institutions in the conference. Knight Commission members acknowledged that changing the way conference payouts are allocated to put a focus on academics will be a hard sell, but insisted that their recommendations are a way to drive future conversation.

“To preserve the integrity of college sports, we can no longer base shared revenues so heavily on winning but instead on maintaining the right balance between athletics and academics,” said Carol Cartwright, a Knight Commission member and president of Bowling Green State University.

Finally, the Knight Commission offered a few other specific recommendations it says can help institutions “treat athletes as students first and foremost.” The commission suggests that Division I reduce the length of its athletic seasons, following the example set by Division II earlier this year. Additionally, as they have in years past, the panel again recommends that the NCAA help prevent the use of athletes’ identities to promote “commercial entities and products.”

“There must be a bright line between college sports and professional sports,” said Len Elmore, a commission member, sportscaster and former basketball star. “These reforms build upon others in the past to distinguish that line. We are not saying that there cannot be an investment in sports. We are saying that this investment needs to be put in perspective.”

NCAA officials, including the interim president Jim Isch, were on hand at the Knight Commission event and offered reserved comments on the group’s recommendations afterward. Primarily, they took issue with the Knight Commission’s criticism of the current method by which postseason bans are administered.

“As simple as it sounds, we don’t think establishing a specific postseason penalty trigger of 925 for all teams is fair – especially to those team that are improving,” Isch said in a statement. “Our current penalty structure that accounts for improvements is fair and has the desired effect – an emphasis on academic success.”


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