Should Hawkeyes athletics share wealth with rest of school?
IOWA CITY, Ia. — Bruce Harreld was only a few months into his job as president of the University of Iowa when he issued a challenge to athletics director Gary Barta: See if you can find ways your department can help the university as a whole.
Think of it as a “philanthropic” duty, not a financial one, Harreld said.
The results of that request are yet to be determined, but it’s a question being asked more and more on cash-starved college campuses where major-conference football programs in particular are seeing record revenues. What, if any, financial obligation does the athletics department have to the academics side of the operation? And who ultimately gets to decide?
The issue is certain to gain new urgency when the Big Ten Conference, of which Iowa is a member, announces its new TV contracts with ESPN and Fox Sports this week in Chicago. Early news reports suggest that the deal could provide a 50 percent boost in revenue to the Big Ten’s 14 member schools. For Iowa, that means the $34.3 million it is expected to receive from the conference in 2016-17 would leap to more than $50 million in subsequent years.
Harreld made the challenge to Barta after he noticed a wealth gap.
His athletics department last school year had a $96 million budget fueled by television revenue that allowed it to offer gaudy salaries to high-profile coaches.
Meanwhile, “we’re struggling for every possible penny we can get on the academic side,” said Harreld, whose background is in corporate America, not academia.
The Board of Regents governing Iowa's three public universities has long pressured the athletics departments at the two larger ones — Iowa and Iowa State University — to pay their own way. Both have been able to do that in recent years.
Iowa State President Steven Leath has not asked his athletics department to provide financial support to the rest of the school.
"We're all facing a number of very large, comprehensive series of lawsuits related to athletics," Leath said in April. "It's unclear how those would be ruled upon. So, before we would change our budget structure to put money back into academics, we'd want to at least get (beyond) some of these immediate lawsuits."
Former college athletes in recent years have filed lawsuits seeking compensation for the use of their names, images and likenesses in broadcasts and video games, and for concussions suffered while playing football, among other cases that could require payouts from universities.
The athletics department's financial situation is much different at the University of Northern Iowa, which competes in the Missouri Valley Conference and doesn't get an infusion of money from TV contracts. Five years ago, the board voted to limit direct support of UNI athletics to 2.4 percent of the school's general fund budget, which comes from taxpayer dollars, tuition, fees and other institutional sources. For the 2014-15 fiscal year, that was about $4 million of the athletics department's $13 million budget.
Harreld said he is “aware of the issues to stay competitive in each of our sports.” So he’s not seeking a straight transfer of cash from athletics to academics. Rather, he is asking Barta and his staff to be creative in thinking about ways to spend money that would benefit all students, like endowing professors whose research and teaching center on sports, or funding public safety, fitness and well-being efforts on campus. He said the contribution need not be merely a fiscal endeavor, but perhaps could be about “time and commitment.”
He cited the University of Iowa Hospitals and Clinics’ support of the Ronald McDonald House, which provides free or low-cost housing for patients and their families, as a parallel example.
“It’s not a dictate from me,” Harreld said of his instructions to the athletics staff, but added: “Everything I raise I hope, actually, is in a positive area and makes some sense.
“I don’t work by letting things fester. I actually keep raising the questions.”
Some athletics departments already give back
Iowa isn’t the only university exploring the financial intersection of athletics and academics. But few colleges actually see dollars flowing from sports to the classroom. A January report by The Chronicle of Higher Education found that 40 athletics departments at U.S. universities reported giving money to academics, but in reality, only 10 of those provided more funding than they received in subsidies. Four of those 10 were members of the Big Ten.
That’s why Brit Kirwan was so heartened to see Harreld even broach the idea.
Kirwan, 78, retired last summer after serving for 13 years as chancellor of the University System of Maryland. He was previously the president of Ohio State University and is chairman of the Knight Commission on Intercollegiate Athletics. Kirwan has long been concerned about the oversize role sports can play on a college campus.
“We need more courageous voices like that in higher education,” Kirwan said of Harreld. “I think we in many ways lost our way with regard to the balance between intercollegiate athletics and academics. Expenditures on athletics are growing at four to five times the rate as expenditures on our academic programs. I think in many institutions, academics are treading water, and still we have these big expenditures on athletics to pay enormous salaries for coaches and bloated staff.”
In reality, the combined general fund budgets for Iowa and Iowa State increased 24 percent from 2012 to the current fiscal year; the athletics budgets combined saw a 39.2 percent jump during that same period.
Kirwan’s hope is that the presidents of the 14 Big Ten schools will lead the way by requiring that a percentage of the money coming from increases in TV revenue be devoted to the academic side of the institutions. Barta suggested to The Des Moines Register last month that such a possibility has been raised, writing in an email: “There have been discussions in regards to all Big Ten schools using some of their resources to invest back into academic missions, but nothing final.”
Harreld said he is aware of no such discussions and likely wouldn’t support them if they did occur.
“I think the institutions are all different in nature. It’s sort of like Iowans’ general response to federal government mandates,” Harreld said. “I’d entertain anything. But my initial reaction would be, ‘Really?’”
Some states make contributions a requirement
Kirwan believes that if university presidents don’t act, their overseers may force their hand. That’s what happened in Louisiana, where the Louisiana State University Board of Supervisors in 2012 enacted a policy requiring the athletics department of the powerful Southeastern Conference school to give $7.2 million a year to the academic side. Last year, when the university saw a windfall from TV money, that figure grew to $10 million.
In Virginia, Gov. Terry McAuliffe signed a law last year that caps the amount of money university athletics departments in that state can take from student fees, a common way to subsidize sports on college campuses.
“It’s not sustainable to starve academics and spend lavishly on athletics,” Kirwan said. “At some point, the public, legislatures, the Congress, somebody’s going to step in.”
State Sen. Brian Schoenjahn, chairman of the Iowa Legislature's Education Appropriations Subcommittee, said any decisions regarding the spending of university athletics money should be the province of the regents.
"I think that's why we have the Board of Regents, is to try to keep politics out of it," he said.
Regents President Bruce Rastetter, in turn, acknowledged that the university presidents have oversight of their athletics departments but that the regents also play a role.
"Any approach that could potentially change the competitiveness of our athletics programs needs to be very carefully considered," Rastetter wrote in a statement to the Register. "Our student-athletes work hard to succeed and having the resources necessary to help them achieve success is critical. Having discussions is fine, as long as it is done in a judicious and deliberate way, and with all stakeholders, including the Board."
At Iowa, professor Jeff Cox wants to be sure that whatever happens doesn’t jeopardize the university’s efforts to make the athletics department self-sustaining, which occurred for the first time in 2009. That accomplishment was years in the making, noted Cox, who served on the university’s Presidential Committee on Athletics for seven years, the last two as its chairman.
Cox isn’t convinced that the athletics department will have dollars to share. It won’t this year: The 2016-17 budget calls for $102 million in income and $102 million in expenses.
“The problem is that these increases in money tend to be eaten up by excessive pay to the football coaches, not to mention the athletics director,” Cox said. “I don’t believe that their ability to bring in money is directly related to how much we pay the coaches. I think we could freeze the pay of football coaches and five years from now have just as good of a football program as we do right now. But there’s only one way to find out.”
Cox said that if there were a surplus of money to be given to academics, he’d like to see it used to hire new professors or give raises to the current ones. Harreld said that his faculty hasn’t been given a “competitive raise” in years.
Iowa's current budget calls for salary increases of approximately 2 percent for faculty members.
It’s also noteworthy that undergraduates at the state's three public universities will pay a $450 annual increase for in-state tuition this school year, compensation for a shortfall in state funding. But Harreld said that any money gleaned from athletics wouldn’t make a dent in offsetting that. The university’s budget is approaching $750 million, he pointed out. Athletics constitutes one-seventh of that.
“Let’s keep this in perspective, the numbers,” said Harreld, adding that athletics could perhaps fund an academic scholarship or two. “I understand that issue, but I don’t think (using athletics money to defray tuition increases) is all that realistic. The question is: Can everybody support and contribute to other parts of the institution other than themselves?”
Here are the 10 universities whose athletics departments provided money to academics, according to research by The Chronicle of Higher Education. Numbers are total dollars transferred for fiscal years 2011-14:
Texas ($37.1 million transferred to education; $0 total subsidy)
Ohio State ($36.2 million transferred; $0 total subsidy)
Alabama ($25.4 million transferred; $23 million subsidy)
Florida ($25.2 million transferred; $17.9 million subsidy)
Louisiana State ($19 million transferred; $0 total subsidy)
Oklahoma ($11.1 million transferred; $0 total subsidy)
Nebraska ($9.7 million transferred; $0 total subsidy)
Kentucky ($8.1 million transferred; $3.4 million subsidy)
Michigan ($7.2 million transferred; $1 million subsidy)
Purdue ($4.1 million transferred; $0 total subsidy)