An Open Letter to Division I College Presidents and Governing Boards: Fix Skewed Incentives in Your Sports Programs

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April 04, 2013

To Division I College and University Presidents and Trustees:

As the Final Four playoff gets under way in the NCAA's March Madness men's basketball tournament, we look forward to the competition with excitement and anticipation. But our enthusiasm is tempered by the extreme imbalance between the athletic and the academic at many colleges and universities. Revenue sports in the NCAA's Division I are on an unsustainable path—and we believe that college presidents and governing boards need to make changes to better align the athletics programs of their institutions with their academic mission.

In particular, the process of hiring and renewing contracts for Division I coaches in basketball and football should come under much closer scrutiny and oversight. Presidents and trustees need to ensure that academic and athletic incentives in coaches' contracts are reasonably balanced. The responsibility for hiring coaches and renewing contracts is typically assigned to the athletic director. But it is also a fiduciary duty and a leadership challenge for trustees and governing boards.

Many people mistakenly assume that most athletics departments with teams in Division I football and basketball are self-supporting. But an NCAA analysis found that in 2009-10, just 14 athletic departments in the country would have been able to cover their expenses without student fees or other subsidies from institutional funds—and those subsidies are skyrocketing.

Between 2005 and 2010—a period during which many states cut higher-education support—spending by Division I athletic departments rose more than twice as fast as academic spending on a per-student basis. Public colleges and universities in Division I spent roughly $92,000 per athlete in 2010, compared with less than $14,000 per full-time student.

A good portion of the money to support athletics programs comes from student fees, which are tacked on to tuition whether a student is interested in athletics or not. In 2008-9, students at public Division I colleges paid nearly $800-million in fees to support athletics programs—at a time when many cash-strapped students are worried about rising debt burdens and being able to afford college at all.

It is no secret that the principal factor in runaway athletics spending today is coaches' rapidly escalating salaries. Since 2006, the salaries of Division I head football coaches have jumped more than 70 percent, to an average annual salary of $1.64-million.

And that's just the average. In 2011, 32 football and men's basketball coaches in the NCAA's Division I earned more than $2-million each. The highest-paid basketball coach that year, Rick Pitino, received $7.5-million from the University of Louisville—or about $20,500 a day.

In Oklahoma, Connecticut, and Maryland, a head football or basketball coach was not only the highest-paid employee of the flagship university but the highest-paid public employee in the state.

Given that level of public support, coaches have a responsibility to pursue academic as well as athletic success for their teams.

When teams are winning, coaches receive additional incentives and bonuses that can add up to millions of dollars. Tom [McMillen, one of the authors] recently analyzed the contracts of 52 Division I football and basketball head coaches and found that bonuses for athletics success averaged $600,000. A few contracts provided incentives for academic success, but those averaged $52,000—a lopsided imbalance of 11 to one.

In almost every contract, if a team fails academically, the coach still would receive a bonus for athletics success. And when a basic academic level isn't met, the team or the individual player—not the coach—gets punished. Not one of the contracts had an explicit provision for firing a coach for a team's poor academic achievement.

The impact of this imbalance is unmistakable: Graduation rates for football and men's basketball players continue to be the lowest among Division I sports.

No coach should receive an enormous reward when most of his team members are flunking out and will never get the degrees they are in college to earn. The coach sets the tone for the team, and when he doesn't care about academic performance, his players know it. To change a coach's mind about what is important, penalties and incentives must change.

That's where you come in. We suggest that college presidents and governing boards consider several steps to create a sounder balance between the academic and the athletic.

First, the Knight Commission on Intercollegiate Athletics should develop recommendations for best practices that trustees and presidents would be urged to adopt and track.

One of these practices could be to require greater parity between academic and athletic bonuses in new contracts. We are not suggesting changes in current contracts. But why not start to make it clear to coaches and assistant coaches that bonuses are dependent not just on athletic performance but also on classroom success?

In fact, why not make all bonuses dependent upon the team's reaching basic academic benchmarks? And when the academic performance of a team is exceptional, coaches should receive meaningful bonuses.

Equally important is establishing best practices for closing the graduation gap for black players, who today have graduation rates 14 to 24 percentage points lower than those of white players, depending on the sport and division.

Finally, for coaches whose players repeatedly fail in the classroom, governing boards should establish contractual clawbacks to recover money already paid—even if the coach has moved on.

To evaluate the effect these reforms might have, consider the University of Connecticut, the NCAA men's basketball champion in 2011. UConn was penalized by the NCAA for poor academic performance and could not play in this year's tournament.

In 2010, the athletic director knew that the university was headed toward sanctions because of the team's academic record, though the coach was still receiving his bonuses. In a new contract, signed in 2010, all bonuses became contingent on meeting minimal benchmarks for academic success—and now the team's academic progress rates are up significantly.

We recognize that it is difficult for governing boards to keep track of athletics programs, given the many issues addressed in board meetings. That's why the University System of Maryland, where Tom serves as a regent, has set up a task force to monitor sports programs and make recommendations to the Board of Regents.

Reform won't be easy—and change won't happen overnight. Establishing an appropriate balance between athletic and academic priorities will require political courage, leadership, and the education of alumni boosters. But we reject the fashionable pessimism that college presidents and trustees are largely helpless to alter the money race in college sports.

We have every faith that you can shore up the educational mission of your institutions. We are confident that, working collectively, you can create healthier incentives in coaches' contracts and better-balanced spending on the athletic and the academic. Your colleges, and your students, need and deserve no less.

Arne Duncan is U.S. secretary of education. C. Thomas McMillen, a former member of Congress, served on the Knight Commission on Intercollegiate Athletics and is secretary of the University System of Maryland's Board of Regents. Both men played college and professional basketball.