Slimming Sports Spending

November 18, 2010

When college athletics programs cannot cover their expenses with generated revenue, they are forced to rely on funds allocated from their institution’s wider budget. Since only 14 National Collegiate Athletic Association member institutions report positive net revenues from athletics, nearly all NCAA athletics programs rely on this practice. In a report it issued last summer, the Center for College Affordability and Productivity termed the growing subsidy of these programs with funds from institutional budgets and student fees an “athletics tax.”

On Wednesday, as part of its larger “25 Ways to Reduce the Cost of College” series, the center released a set of recommendations on how to “end the athletics arms race,” arguing that “mutual cooperation across institutions is necessary to reduce costs through methods such as limiting coaches’ salaries, restricting excessive travel and shortening athletic seasons.”

The center’s primary recommendation for trimming athletics spending is to reduce salary expenses, especially those of football and basketball head coaches, whose salaries constitute the largest expense incurred by most athletics programs. In 2008-09, head football and basketball coaches made, on average, about $219,000 and $202,000, respectively, but many make much, much more. In the most extreme example, the center cites John Calipari, head basketball coach at the University of Kentucky, who was wooed away from the University of Memphis in 2009 for a record eight-year, $31.65 million contract.

The NCAA argues that it cannot simply institute a salary cap for coaches because doing so would likely violate antitrust laws. Some college athletics watchdogs, including the Women’s Sports Foundation, have called upon Congress to grant the NCAA “a limited exemption that would permit salary caps for coaches.”

In the absence of an external body like the NCAA instituting a salary cap, the center encourages campus-level administrators to exercise more oversight of spending and encourage more transparency in the hiring process.

“Is it truly the case that at a majority of [Football Bowl Subdivision] schools the institutions as a whole values the football coach more (or at least pays them more) than the university’s president?” the center’s report reads. “Does such a large allocation of resources to a single coach really fit into institutional priorities? A careful consideration of these questions is necessary before contracts are awarded. … Ultimately, boards of trustees have the power to refuse such wild contracts and need to be bold in allocating funds to those programs that best fulfill the priorities of the university.”

Since coaches’ salaries are often driven up in bidding wars between institutions, the center recommends that institutions put provisions in coaches’ contracts that “include strict financial penalties for coaches who opt out of contracts before their agreed-upon term is completed.” By way of example, the center cites the contract of Frank Beamer, football coach at Virginia Tech, which includes an undisclosed fine for just such an action.

The center’s secondary recommendation is to reduce the number of athletic scholarships, particularly in the sports where the most scholarships are offered. Football teams, for instance, may offer up to 85 scholarships. By contrast, there are only about 25 “unique positions” on a team; in the National Football League, teams are allowed an active squad of 45 players, along with 7 reserve players. In this context, the report encourages a reduction to the maximum number of scholarships per football team.

“Certainly there is some need for reserve players, especially considering the high incidence of injury,” the center’s report reads. “Yet, even if three scholarships per position were allowed, only 75 scholarships would be necessary, and a good case could be made that even three per position is excessive. … Athletic departments are unlikely to pursue this reform on their own for fear of losing a competitive edge with others; however, a uniform rule change by the NCAA would eliminate this problem and help schools save money.”

The center provides a few other broad-based recommendations to trim athletics costs, including:

  • “Rent existing facilities rather than building new ones.” For example, the report cites college football teams that play in stadiums owned and maintained by nearby professional teams. If an institution does have its own facilities or wishes to build them, the report suggests “leasing them out when not in use” for concerts, conventions and similar events.
  • “Reduce travel expenses.” The center suggests teams play fewer non-conference games, which typically require more travel; cutting overall season length; and “eliminating the entrenched practice of booking hotel rooms for the football team the night before a home game.” Of this last item, the report argues: “If players are not smart enough to make responsible decisions the night before a home game, then perhaps they do not belong in college in the first place."

In concluding its recommendations, the center acknowledges that the “major hurdle” for many of their proposed reforms is “fear among university leaders” that attempting them might hurt their institution’s competitiveness. Therefore, the center singles out a group of influential institutions it would like to see take the first step.

“Perhaps reform must start as a movement of university presidents who lead schools of both nationally prominent athletics and academics,” the center’s report reads. “As leaders whose institutions carry much sway with both communities — schools such as the University of Michigan, the University of North Carolina, the University of Virginia, Northwestern University, the University of Notre Dame, Stanford University, Duke University, etc. — if they agree to a series of reforms, it would both bring athletics back within the mission of the university and reduce costs for all.”

NCAA officials offered only reserved comment regarding the center’s recommendations.

“The overall context should be considered here,” wrote Stacey Osburn, NCAA spokeswoman, in an e-mail to Inside Higher Ed. “When looking at the median amount for FBS schools, approximately 1 percent of overall university budgets is allocated to athletics. For other Division I schools, the median was less than 4 percent of overall school budgets.”

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