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  • Peter Miller

The distance between us (II): Brazilian teakwood and dated lecture halls

Sociologist Robert Putnam (2015) refers to social distance as the relational space that separates people, organizations, and/or other entities from one another. When people or groups do not know each other or interact with one another regularly, their mutual understanding, trust, and affection are challenged. On many university campuses, an expansive social distance separates athletics programs from academic units. Big Money often contributes to these divides.

Several of the university-based leaders whom I interviewed throughout the US in recent years have described colleges’ investments in athletics programs as “distasteful” and “out of whack” with what is happening on the rest of their campuses. They juxtaposed the shrinking public support of research and higher education with rapid acceleration of athletics. At the UW-Madison, for example, much has been written about decreases in state contributions to the university. And the academic side of campus has been especially hurt by federal research cuts. The university had one of the highest research budgets in the U.S., but recently dropped out of the top five in research funding. UW research expenditures grew by just 2% between 2005 and 2015, which is only half the rate of growth of the other top 25 universities in the U.S. In fact, UW’s overall revenue grew by only 2.6% during this ten-year period, a slower growth rate than many peer institutions, including Indiana, Minnesota, Illinois, Michigan, Purdue, and Penn State. Between 2013 and 2015, UW’s total revenue actually dropped 2% per year.


The athletics budget at UW experienced no such dips during this time period. Athletics revenue reached an all-time high of more than $130 million in 2016-17. Similar differences in revenue trends are, in fact, found at many large public universities in recent years. And, mirroring the youth sports industry, colleges’ spending on sports has ramped up. Discrepancies between academic and athletics budgetary trends—whether real or perceived [1]—often leave faculty and administrators questioning their institutions’ values.


Facilities and salaries are two of the most common factors that are compared on campuses. Whereas states have taken a cautious approach to taking on debt for general campus projects, most Autonomy 5 athletics programs have followed one another in initiating bold new developments. Some of these projects are easy targets for sports critics. Clemson built a football facility with a mini-golf course, barbershop, sand volleyball pit, and outdoor kitchen area. South Carolina’s football building will include laser tag, a movie theater, and bowling lanes. Texas A&M’s players have a $12M nutrition center with their own executive chef. The University of Oregon’s $138M football building includes individually ventilated lockers from Germany, teakwood flooring from Brazil, and barber chairs from Italy.


Clemson's football facility, replete with recreational options.

Oregon's football locker room is built with high-end imported materials.

Such facilities upgrades and the skyrocketing salaries of many coaches were bound to be critiqued even before universities began experiencing the financial challenges of recent years. But when professors working in dated offices and teaching in the same plain classrooms for twenty years read about athletics developments on campuses, they question their schools’ priorities.


Beyond consistently conflicting perceptions of whether or not the ramping up of college athletics is reasonable, the actual financial states of universities’ athletics programs vary greatly. Relatively few athletic departments operate in the black. But differences in accounting complicate comparisons between campuses and cloud our understanding of which programs are subsidized and to what extents.


The salaries of coaches draw widespread public critique. Dabo Swinney, Nick Saban, and Mike Krzyzewski, for example, are each paid more than $8 million per year. Such numbers do not sit nicely with just about anyone and there is wide agreement that some sort of reigning-in should happen.


Interestingly, however, media attention that is hyper-focused on football and basketball coach salaries may contribute to the public and campus-level (mis)understanding of most college coaches’ situations. First, football coaches in Autonomy 5 conferences, especially at the traditional powerhouse schools, serve roles that are similar to CEOs. They organize and oversee vast staffs and player rosters and, along with traditional coaching responsibilities (recruiting, schematic development, etc.), must engage in year-round fundraising, alumni relations, and media obligations. Coaches’ successes and failures reverberate throughout their campuses and communities. In the best of situations, successful programs can transform their universities.[3] Further, studies indicate that top-tier programs have economic impacts that go far beyond their campuses. Fueled by football, the University of Nebraska’s athletic program, for example, had a $245.5 million impact on the greater Lincoln area in 2016 – a more than 81% increase over its impact ten years earlier.


Most of the leaders whom I interviewed indeed stressed that few “outsiders” fully appreciate football coaches’ impact and, while some of the highest salaries are not warranted, these positions are not comparable to others on campus. So, while faculty perceptions that athletics-related spending is “distasteful” and “out of whack” may ring true in comparison with other units of their campuses (in terms of both the amounts spentand the messages sent), it is less clear that such investments are fiscally irresponsible across the board.


Nick Saban has a huge salary -- but Alabama's President called Saban the best investment the institution has ever made.


A deeper look into college coaches’ pay in fact reveals a top-heavy salary environment where the number of unreasonable salaries is relatively small. Consider that there are 347 Division I schools fielding thousands of teams. The less than 50 football coaches who are paid more than $3M annually constitute a minute fraction of the overall pool. Tenured faculty in medicine, business, and economics commonly draw guaranteed salaries of over $300K or $400K for as long as they wish to work, amounting to stable, lucrative careers that span thirty or more years. Given the short-term nature of coaching positions, where firings are an annual occurrence, these faculty situations sit quite favorably alongside those of the coaches on their campuses. For example, the mean salary of assistant Big Ten men’s basketball coaches was $232,000 in 2016-17. These are seasoned coaches who average 15 years of experience. But most of them will be fired or forced to change jobs at some point. Theirs are among the most lucrative of coaching contracts on their campuses and are far less financially attractive than tenured faculty jobs.

Actually, in the larger scheme of things, taking on debt for ambitious facilities may present a bigger fiscal threat to many universities than even the highest of coach salaries. Different from many campus projects that heavily rely upon public funds, the athletics departments in some Autonomy 5 schools are able to pay for their projects through philanthropy and program revenue. Large projects, however, require long-term debt service payments. High debt payments at Alabama ($225M over the next 28 years) may not be altogether problematic because of current low interest rates and the Crimson Tide’s history of revenue generation. But other programs are less equipped for such arrangements. Cal-Berkeley’s athletic department, which receives an annual $5M check from the university, lost $22M in 2016 in no small part because of an $18M annual debt service payment for major facilities renovations. A recent Bloomberg analysis [4] suggests that the financial buffer that programs like Cal, Georgia Tech, and Illinois derive from conference TV revenue may not be sufficient:

A high-priced coach might earn $4 million to $5 million a year. Meanwhile, according to public records, athletic departments in at least 13 schools in the country have long-term debt obligations of more than $150 million as of 2014—money usually borrowed to build ever-nicer facilities for the football team…If that (TV) revenue stream fails to grow or starts to drop, as it already has for some programs in the top tier of college football, the results could be crippling.


Campus discourse on athletics-related spending, then, should be considered with a degree of clarity at local levels. Robust athletic departments can create vast opportunities on and beyond campuses – but the pursuit of these opportunities is a complex social, political, and financial endeavor that reveals perception gaps and expands campus-level social distances. [5]

Notes:

[1]Some question whether athletics-related spending has in fact outpaced broader campus spending. Many universities have substantively invested in law, business, engineering, and a range of other academic programs in recent years.

[2]DeFabo, M. (August 27, 2017). “Purdue banks on $65 million football complex to pay dividends with recruits.” Goshen News.

[3]Robert Witt, former president of the University of Alabama, identified the hiring of football coach Nick Saban as the best investment in the university’s history. He credited Saban as a central pillar to the more than $500 million that the university raised shortly after the team won its first title under Saban. Alabama is an outlier in terms of the scale of its football success, but other universities similarly view athletics as a sound, even essential, area of aggressive investment.

[4]Novy-Williams, E. (2017, January 4). College football’s top teams are built on crippling debt.Bloomberg. Retrieved from https://www.bloomberg.com/news/features/2017-01-04/college-football-s-top-teams-are-built-on-crippling-debt

[5]Cal’s Chancellor brought together a diverse group of faculty and administrators to examine the future of Cal Athletics. The widely publicized “Task Force on Intercollegiate Athletics” met 18 times in 2017 and ultimately failed to reach a consensus on a clear direction forward, including how to develop and use facilities and whether or not to trim its 30 team athletic program.