It’s Time to Fix Warped Incentives in Division I College Sports

Check out who would win the men's NCAA tournament  based on academic performance. Click to enlarge.

Check out who would win the men’s NCAA tournament based on academic performance. Click to enlarge.

This op-ed by Arne Duncan and Tom McMillen is cross-posted from USA Today.

March Madness is underway, but the 2011 champion, the University of Connecticut, is conspicuously absent. The Huskies men’s team isn’t competing this year because it failed to meet the minimal academic requirements set by the NCAA for postseason play.

The fate of UConn’s team sent shock waves through locker rooms, coaches offices and the suites of athletics directors and university presidents. For the first time, a powerhouse program lost its opportunity for postseason glory because of years of poor performance in the classroom. We think this is a good start toward restoring a healthier balance between academics and athletics in Division I college sports — and toward reaffirming that the mission of a university is to educate all of its students. But it is just a start.

The NCAA should be commended for raising the academic benchmarks that teams must meet for postseason play. New NCAA regulations essentially require teams to be on track to graduate half of their players to be eligible for postseason play, and graduation and academic progress rates are up significantly for tournament teams this year. Yet governing boards of universities and college presidents also need to do more to reinforce the educational mission of their institutions. Too often, presidents and trustees undermine that mission by providing lucrative incentives to coaches that downplay the importance of athletes getting a college education.

Tom (McMillen) recently examined around 50 contracts for head coaches of college football and basketball, many of them culled from the USA TODAY Sports coaches’ salary database. Most of what he found will surprise no one: Salaries and rewards for big-time college coaches are astronomically high. In 2011, 32 NCAA Football Bowl Subdivision coaches and 11 NCAA Division I men’s basketball coaches earned more than $2 million annually. The highest paid basketball coach that year, Rick Pitino, was paid $7.5 million by the University of Louisville — a little more than $20,500 a day.

Coaches today earn whatever the market pays. But many coaches work at public universities, funded with taxpayer dollars. In 2011, in Oklahoma, Connecticut and Maryland, a head football or basketball coach was not only the highest-paid employee at the university but the highest-paid state employee.

Oklahoma Gov. Mary Fallin earned $147,000 in 2011, while the football coach at the University of Oklahoma, Bob Stoops, was paid $4.875 million, 33 times as much as Gov. Fallin. Moreover, nine Oklahoma football assistant coaches were paid more than the governor, including the tight ends/tackles coach, who pulled down a $240,000 salary.

Coaches receive huge financial bonuses when their team is winning. Yet the incentives for academic success in the contracts Tom examined show how warped priorities have become at some institutions.

If academic performance determined the winners of the NCAA women's tournament, Princeton would come out on top. Click to enlarge.

If academic performance determined the winners of the NCAA women’s tournament, Princeton would come out on top. Click to enlarge.

About two-thirds of the basketball contracts and three-fourths of the football contracts did include a bonus for academic performance. But these incentives were dwarfed by bonuses for performance on the field or court. Academic incentives averaged $52,000 per coach, while athletic incentives averaged $600,000 per coach — a lopsided ratio of 11-to-1.

When many states are reducing funding for higher education, it is hard to justify such skewed priorities and runaway athletic spending. Even at Division I institutions, few athletic programs are self-supporting — which means that institutional funds must typically be diverted to pay for athletic programs.

A recent study by the Delta Cost Project compared spending per athlete and student at Division I institutions. In the six “power conferences” that form the Bowl Championship Series, median athletic spending per athlete topped $100,000 in 2010, compared to about $15,600 spending per student.

Escalating coaches’ salaries are the single largest contributing factor to the unsustainable growth of athletic expenditures. And we believe that universities and colleges must start rethinking coaches’ compensation, at least in the Division I revenue sports.

If universities and colleges want to readjust a coach’s priorities, they need to change the penalties and incentives they offer coaches.

In almost every one of the contracts Tom reviewed, a coach can receive bonuses for winning games, even if his team fails academically. Poor academic performance means the team or the individual player — not the coach — gets punished.

But no coach should receive financial bonuses when much of his team is flunking out or failing to get a degree.

Many boards are too cozy with athletic departments, allowing athletics directors to negotiate contracts for coaches with little oversight. A recent survey by the Association of Governing Boards of Universities and Colleges found that only about 15% of board members think the salary of their football or basketball coach is excessive. Board members sometimes forget their job is to protect the institution — not the coaches, not the boosters and not the fans.

We are not suggesting any regulatory scheme for capping or restricting coaches’ compensation. Nor can we specify the balance between athletic and academic spending that, to paraphrase the Goldilocks principle, is just right. What we can say is that this balance is plainly out-of-whack with the educational mission of many Division I universities.

Governing boards and college presidents can take steps to right that imbalance. They could adopt a model of “best practices” that includes greater parity in new contracts for coaches between academic and athletic bonuses and provides penalties for poor academic performance.

Today, coaches can enjoy multimillion-dollar contracts when they jump to another university, even when their former team suffers sanctions for misconduct that happened under the coach’s watch.

We would like to see “clawback” provisions in new contracts that would enable institutions to recoup some salary and bonuses from coaches and ADs for rogue programs, even after coaches leave an institution.

Creating a healthier balance between academics and athletics in our universities is not rocket science. All of these steps are doable.

But it will take courageous leadership and a willingness by college presidents and trustees to buck the status quo.

This we know for sure: The current path of big-time college sports is neither economically sustainable nor morally defensible.

Duncan is U.S. Secretary of Education; McMillen is chairman and CEO of the Timios National Corp. Both played college and professional basketball. McMillen is a member of the University System of Maryland board of regents.

Audio of Press Call (03/21/2013) Audio icon

5 Comments

  1. If sports program are self sustaining, its because they don’t properly compensate the athletes. A college scholarship is an insufficient and inherently unfair form of compensation especially when one takes into consideration the amount coaches and athletic directors are compensated.

    Athletes should get paid, especially in sports like football and basketball where their injuries can have a life long impact. They should be entitled to disability and workers’ compensation, just like coaches and athletic directors. The athletes should also have access to other benefits like the retirement plans the coaches and athletic directors get. It’s a travesty that college athletes aren’t treated better.

  2. Also well past time to fix warped incentives with regular K-12 education. Race to the Top is absurd. All schools should be properly funded not made to “compete” for “grants”. It’s abusive and destructive. Many grantees will not be able to share best practices because they’ll only work in their particular neighborhood.

    Fully fund IDEA, fully fund education. Get rid of NCLB and RTTT. Keep big business out of education planning and funding. Charters are stealing public education funds from all schools while practicing exclusive and discriminatory enrollment. Any school will have good scores if not enrolling moderate/severely disabled, English Language learners, Foster and Homeless youth.

    Arne Duncan does not listen to families, only the businessmen and publishing companies. Common Core is a bad idea with no funding to implement. It’s just a way for outside business to dictate curriculum so they can sell product.

    We need teachers, jobs for families and safe neighborhoods so children can come to school well-fed and ready to learn. Why aren’t governors, mayors and business leaders working in that area instead of sticking their noses into education? Because they’ve already drained public funds from other places and public education funds are ripe for the picking.

    We will not have good public education as long as business interests are involved and schools are punished for not reaching ridiculous goals placed upon them without the funding to do it.

  3. The report is incomplete. At Oklahoma, the athletics department has poured more than $40m into the school’s (not athletics department) coffers over the last 11 years and will add more thyan $5m this year. The department is self-sustaining (no funding from student-fees, tax-appropriated dollars or campus budgets). That, and the fact that the department has finished in the black for 14 consecutive years, lends some additional context as it relates to the finances.

  4. I agree with much of what was in the article, but I do find it a bit ironic that the Women’s bracket has Pittsburgh winning a game between Baylor and Princeton. Obviously, a Princeton graduate didn’t fill out that bracket!

  5. I totally agree (I am a former college basketball and baseball player). That is why the Ivys and Division II and lower schools, that do not offer ath. scholarships, are much healthier places to be. I find the concept of the “scholar-athlete” at most division I schools to be a joke!

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