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NCAA News Archive - 2006
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Forum examines balance of business with academic mission
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By Gary T. Brown
The NCAA News
The NCAA News
NEW YORK — Panelists at the fifth annual SportsBusiness Journal Intercollegiate Athletics Forum raised concerns about the rising costs of intercollegiate athletics at the same time an NCAA Presidential Task Force report calls for increased attention to fiscal responsibility at the campus level.
Even in sessions during the December 6-7 gathering intended to focus on marketing, student-athlete behavior, new media and academic reform, a recurring theme was the business practices displayed at high-profile institutions that contribute to a perception that business overly influences athletics decision-making.
Not only were instances in which universities spend millions to buy out a football coach’s contract a concern, but also the bonding in which universities engage to fund athletics facilities and the rising operating costs overall that challenge athletics directors’ efforts to balance budgets.
A panel of Division I ADs, for example, emphasized during a session on athletics operations their unique situation in light of a report from the Presidential Task Force on the Future of Division I Intercollegiate Athletics indicating that the fastest-growing revenue source for most athletics departments is funding from the institution’s general budget to square athletics spending. The Task Force believes that trend is not sustainable in the long term, especially in an era of higher-education budget crunching. That makes it even more important for ADs to find new revenue sources to relieve the overall budget pressure on their institutions.
“The demands on athletics departments have grown at such a rate that the financial investment attempts to at least match the demand,” said University of Oklahoma Athletics Director Joe Castiglione. “The message I get from the Task Force report is that we’ve reached a point at which we must embrace the value of empirical data rather than some of the conventional thinking that has put us in the situation we’re in.”
Indeed, step one from the Task Force is a more uniform financial reporting system that produces clear, concise and comparable data presidents can use to determine where their athletics programs stand in the aggregate, and to drive informed decision-making. Castiglione praised the new reporting procedures, though he said they’ll have little effect on institutions’ pursuit for new athletics revenues. Still, he said, the data will shine a light on the few schools whose athletics departments generate revenues that exceed expenses and the rest that subsidize their athletics departments from university funds. That distinction could only be speculated in the past because of the inconsistent methods schools used to report athletics expenses.
“The real threat to fiscal responsibility is not coaches’ salaries or even rising costs, but athletics facilities,” Harrison said. “Institutions are bonding their construction and renovation projects and speculating upon future revenues to pay the bills. That’s a real risk for a lot of schools, since I believe revenues will flatten in the next few years if they haven’t already.”
The contract issue kept coming up, too. SportsBusiness Journal moderators challenged presidents in particular about the buy-out trend. Ohio State University President Karen Holbrook, who like Harrison served on the Task Force, said there was little the NCAA could do with such a local decision. Harrison acknowledged, though, that some of the dollar amounts are alarming. “I had a coach ask me the other day, ‘Why don’t you give me $3 million not to come to work?’ But individual presidents have to make those decisions. We all want the best coach we can afford, but that’s an individual decision and one that the NCAA cannot regulate,” Harrison said.
NCAA President Myles Brand, when probed about the matter, said it was a market-driven phenomenon and included only the most high-profile coaches, but he’d like to see colleges and universities retain consultants to help negotiate contracts with those coaches and their agents. He cited sample contracts provided by the Task Force subcommittee on internal and external constituencies as a resource for institutions to consider.
Most panelists at the forum, from presidents to athletics directors to faculty members, agreed the Task Force report represented an important benchmark for financial decision-making in intercollegiate athletics, though most expect tangible progress to be slow.
Task Force Chair Peter Likins, president emeritus at the University of Arizona, said the report “is not a document for the public to react to. It’s for presidents to understand the challenges. It’s not a dramatic news story; change will not happen on a timeline that will satisfy the press.”
“People tend to think of college athletics as the Ohio States, Floridas and Michigans and not the Pepperdines, Hartfords and Quinnipiacs,” said Harrison. “If we didn’t subsidize at Hartford, we wouldn’t have athletics. Some of the programs you think are self-supporting are not. We as presidents have a clear role in overseeing finances in athletics and how they relate to the rest of the university.”
NCAA President Brand said the business issues in intercollegiate athletics are complicated by tensions, one of which is that business practices must be conducted within the context of the academic mission. Business driven by market value also complicates matters. “Unlike our ability to legislate in academic reform, in the financial realm we can only provide data and guidance. That creates tension,” he said.
Brand also admitted athletics operates under a bright light. “We make high-visibility decisions,” he said. “The sports media shines the light on us. That’s not necessarily good or bad, but it makes it more difficult to work through complex problems.”
The changes have been manifested in a number of ways, according to University of North Carolina, Chapel Hill, FAR Jack Evans — from coaches modifying their recruiting practices to institutions increasing their emphasis on academic support to coaches becoming more actively involved as a counselor and academic advisor, sending the message it is important to graduate.
“The APR certainly has elevated the conversation with coaches,” Evans said. “By their understanding what these metrics are measuring, it helps them think more about their role in being the primary contact conveying the message about academic responsibilities to student-athletes.”
St. John’s University (New York) Athletics Director Chris Monasch said because the APR is a term-by-term rate, it’s causing teams that have low numbers to figure out why more quickly. He also said the public component of the APR is having a positive effect. Coaches feel uncomfortable now in forums at which their team’s APR is shown as being below the national benchmark or even under the campus average. But he said if coaches and student-athletes focus on the academic mission, the APR will take care of itself.
“The bottom line is that you’re there to get an education. If you get an education, all these other things will fall into place,” Monasch said.
University of Arizona President Emeritus Peter Likins on financial trends in college sports: “The day-to-day management of athletics is properly the athletics director’s job, but making sure we have acceptable long-term trends is the responsibility of the presidents and chancellors. When you talk about economics, the NCAA can’t regulate change. The presidents have to reach beyond the machinery of the NCAA to curb some of the excesses we see dominating the evolution of athletics.”
University of Michigan Faculty Athletics Representative Percy Bates on the Presidential Task Force report: “While not everything in the report applies to everyone, it all applies to at least someone in the industry.”
Vanderbilt University Professor and Coalition on Intercollegiate Athletics Co-Chair Virginia Shepherd on the FAR presence on campus: “There are campuses on which many faculty members either do not know what an FAR is or who the FAR is.” (Case in point: an audience member subsequently asked her to clarify what “FAR” stood for.)
Atlantic Coast Conference Commissioner John Swofford on institutional accountability: “Sometimes we have a tendency to look to the NCAA or conferences to solve the issues. That’s not realistic in the case of fiscal responsibility. We need to get back to the practitioners on individual campus making sound decisions.”
President Likins on the perception that college sports is all about business: “College sports and business actually are inverse entities. The purpose of a corporation is to maximize financial benefits while operating within social constraints. The purpose of intercollegiate athletics is to maximize social benefits while operating within financial constraints.”
NCAA President Myles Brand on pay for play: “Paying student-athletes would be the death knell of college sports. Once you turn them into employees, you turn them into a third-rate professional league. What’s important about college sports is the connection with the universities.”
University of Kansas Athletics Director Lew Perkins on self-sufficiency: “I’ve often asked my chancellor to let me give the university all the athletics revenue; it would make my job easier. But the answer is that athletics needs to be self-sufficient. We’re doing exactly what we’re being asked to do. The day we don’t grow our budgets is the day we’re no longer ADs.”
Saint Louis University Athletics Director Cheryl Levick on disclosure: “It is impossible to legislate anything that will compare apples to apples. It all goes back to whether you are meeting the core values of your campus; yet we are required to disclose more financial data and grad rates than any other campus unit. We’re always under the microscope.”
University of Notre Dame Athletics Director Kevin White on the diversity of opinion about the athletics mission: “Some people see athletics as an educational effort and some see it as a highly commercialized institutional-advancement effort. The challenge is to have both groups look at athletics through the same lens.”
Even in sessions during the December 6-7 gathering intended to focus on marketing, student-athlete behavior, new media and academic reform, a recurring theme was the business practices displayed at high-profile institutions that contribute to a perception that business overly influences athletics decision-making.
Not only were instances in which universities spend millions to buy out a football coach’s contract a concern, but also the bonding in which universities engage to fund athletics facilities and the rising operating costs overall that challenge athletics directors’ efforts to balance budgets.
A panel of Division I ADs, for example, emphasized during a session on athletics operations their unique situation in light of a report from the Presidential Task Force on the Future of Division I Intercollegiate Athletics indicating that the fastest-growing revenue source for most athletics departments is funding from the institution’s general budget to square athletics spending. The Task Force believes that trend is not sustainable in the long term, especially in an era of higher-education budget crunching. That makes it even more important for ADs to find new revenue sources to relieve the overall budget pressure on their institutions.
“The demands on athletics departments have grown at such a rate that the financial investment attempts to at least match the demand,” said University of Oklahoma Athletics Director Joe Castiglione. “The message I get from the Task Force report is that we’ve reached a point at which we must embrace the value of empirical data rather than some of the conventional thinking that has put us in the situation we’re in.”
Indeed, step one from the Task Force is a more uniform financial reporting system that produces clear, concise and comparable data presidents can use to determine where their athletics programs stand in the aggregate, and to drive informed decision-making. Castiglione praised the new reporting procedures, though he said they’ll have little effect on institutions’ pursuit for new athletics revenues. Still, he said, the data will shine a light on the few schools whose athletics departments generate revenues that exceed expenses and the rest that subsidize their athletics departments from university funds. That distinction could only be speculated in the past because of the inconsistent methods schools used to report athletics expenses.
Coaches’ salaries
Another Task Force concern garnered attention during a session on presidents’ perspective on reform. University of Hartford President and NCAA Executive Committee Chair Walter Harrison said a fiscal trend that troubled the Task Force also worries him — that of universities speculating on revenue growth to relieve debt.“The real threat to fiscal responsibility is not coaches’ salaries or even rising costs, but athletics facilities,” Harrison said. “Institutions are bonding their construction and renovation projects and speculating upon future revenues to pay the bills. That’s a real risk for a lot of schools, since I believe revenues will flatten in the next few years if they haven’t already.”
The contract issue kept coming up, too. SportsBusiness Journal moderators challenged presidents in particular about the buy-out trend. Ohio State University President Karen Holbrook, who like Harrison served on the Task Force, said there was little the NCAA could do with such a local decision. Harrison acknowledged, though, that some of the dollar amounts are alarming. “I had a coach ask me the other day, ‘Why don’t you give me $3 million not to come to work?’ But individual presidents have to make those decisions. We all want the best coach we can afford, but that’s an individual decision and one that the NCAA cannot regulate,” Harrison said.
NCAA President Myles Brand, when probed about the matter, said it was a market-driven phenomenon and included only the most high-profile coaches, but he’d like to see colleges and universities retain consultants to help negotiate contracts with those coaches and their agents. He cited sample contracts provided by the Task Force subcommittee on internal and external constituencies as a resource for institutions to consider.
Most panelists at the forum, from presidents to athletics directors to faculty members, agreed the Task Force report represented an important benchmark for financial decision-making in intercollegiate athletics, though most expect tangible progress to be slow.
Task Force Chair Peter Likins, president emeritus at the University of Arizona, said the report “is not a document for the public to react to. It’s for presidents to understand the challenges. It’s not a dramatic news story; change will not happen on a timeline that will satisfy the press.”
“People tend to think of college athletics as the Ohio States, Floridas and Michigans and not the Pepperdines, Hartfords and Quinnipiacs,” said Harrison. “If we didn’t subsidize at Hartford, we wouldn’t have athletics. Some of the programs you think are self-supporting are not. We as presidents have a clear role in overseeing finances in athletics and how they relate to the rest of the university.”
NCAA President Brand said the business issues in intercollegiate athletics are complicated by tensions, one of which is that business practices must be conducted within the context of the academic mission. Business driven by market value also complicates matters. “Unlike our ability to legislate in academic reform, in the financial realm we can only provide data and guidance. That creates tension,” he said.
Brand also admitted athletics operates under a bright light. “We make high-visibility decisions,” he said. “The sports media shines the light on us. That’s not necessarily good or bad, but it makes it more difficult to work through complex problems.”
Academic reform
In another session called “Adjusting to the APR and the necessary resources for improved academic performance,” faculty members and athletics directors talked about the effects of the Academic Progress Rate on student-athlete academic success. Most agreed the two-year-old academic-reform package — particularly the APR component — has successfully changed the on-campus climate and, to some extent, coaches’ recruiting behavior.The changes have been manifested in a number of ways, according to University of North Carolina, Chapel Hill, FAR Jack Evans — from coaches modifying their recruiting practices to institutions increasing their emphasis on academic support to coaches becoming more actively involved as a counselor and academic advisor, sending the message it is important to graduate.
“The APR certainly has elevated the conversation with coaches,” Evans said. “By their understanding what these metrics are measuring, it helps them think more about their role in being the primary contact conveying the message about academic responsibilities to student-athletes.”
St. John’s University (New York) Athletics Director Chris Monasch said because the APR is a term-by-term rate, it’s causing teams that have low numbers to figure out why more quickly. He also said the public component of the APR is having a positive effect. Coaches feel uncomfortable now in forums at which their team’s APR is shown as being below the national benchmark or even under the campus average. But he said if coaches and student-athletes focus on the academic mission, the APR will take care of itself.
“The bottom line is that you’re there to get an education. If you get an education, all these other things will fall into place,” Monasch said.
Quotables
Selected comments from sessions during the Intercollegiate Athletics Forum:University of Arizona President Emeritus Peter Likins on financial trends in college sports: “The day-to-day management of athletics is properly the athletics director’s job, but making sure we have acceptable long-term trends is the responsibility of the presidents and chancellors. When you talk about economics, the NCAA can’t regulate change. The presidents have to reach beyond the machinery of the NCAA to curb some of the excesses we see dominating the evolution of athletics.”
University of Michigan Faculty Athletics Representative Percy Bates on the Presidential Task Force report: “While not everything in the report applies to everyone, it all applies to at least someone in the industry.”
Vanderbilt University Professor and Coalition on Intercollegiate Athletics Co-Chair Virginia Shepherd on the FAR presence on campus: “There are campuses on which many faculty members either do not know what an FAR is or who the FAR is.” (Case in point: an audience member subsequently asked her to clarify what “FAR” stood for.)
Atlantic Coast Conference Commissioner John Swofford on institutional accountability: “Sometimes we have a tendency to look to the NCAA or conferences to solve the issues. That’s not realistic in the case of fiscal responsibility. We need to get back to the practitioners on individual campus making sound decisions.”
President Likins on the perception that college sports is all about business: “College sports and business actually are inverse entities. The purpose of a corporation is to maximize financial benefits while operating within social constraints. The purpose of intercollegiate athletics is to maximize social benefits while operating within financial constraints.”
NCAA President Myles Brand on pay for play: “Paying student-athletes would be the death knell of college sports. Once you turn them into employees, you turn them into a third-rate professional league. What’s important about college sports is the connection with the universities.”
University of Kansas Athletics Director Lew Perkins on self-sufficiency: “I’ve often asked my chancellor to let me give the university all the athletics revenue; it would make my job easier. But the answer is that athletics needs to be self-sufficient. We’re doing exactly what we’re being asked to do. The day we don’t grow our budgets is the day we’re no longer ADs.”
Saint Louis University Athletics Director Cheryl Levick on disclosure: “It is impossible to legislate anything that will compare apples to apples. It all goes back to whether you are meeting the core values of your campus; yet we are required to disclose more financial data and grad rates than any other campus unit. We’re always under the microscope.”
University of Notre Dame Athletics Director Kevin White on the diversity of opinion about the athletics mission: “Some people see athletics as an educational effort and some see it as a highly commercialized institutional-advancement effort. The challenge is to have both groups look at athletics through the same lens.”
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