A University Comes Undone

At the University of Maryland at College Park, the death of a football player, accompanied by reports of a toxic culture around the team, has the president under fire. At Ohio State, a trustee resigned last month in protest of what he saw as too-lenient punishment for Urban Meyer, the university’s embattled football coach. Scandals emanating from athletics departments have similarly shaken Southern Cal, Michigan State, and North Carolina, to name a prominent few.

Are such stains simply the cost of doing business in big-time college sports? Can the millions of dollars from donors, TV revenues, merchandise sales, and stadium concessions peaceably (or at least legally) coexist with nonprofit institutions that don’t pay players and are tasked with fostering an intellectual culture?

To understand the dizzying financial and reputational rewards that athletics can bring an ambitious college, along with the attendant risk of institutional implosion, it is useful to look backward. Institutions rushing headlong to a big sports future should consider the fate of their prototype. I’m speaking, of course, about Louisville.

Countless universities covet raising their national profiles — along with freshman applications, the quality of those applicants, and alumni giving — on the backs of their NCAA teams. What set the University of Louisville apart was its grand, and in many ways unlikely, success at fulfilling its all-sport powerhouse ambitions over the past 20 years.

The architect of this success was the athletic director, Tom Jurich. After a brief career as an NFL kicker (he played one game and missed all three of his field-goal attempts), he served as athletic director at Northern Arizona and Colorado State, and was hired by Louisville in 1997. At the time, the university was still mostly a commuter school, occupying an unprepossessing stretch of 345 acres just south of downtown. The campus was poorly lit, signage was just about nonexistent, and grass and weeds sprouted through cracked walkways. To the extent that Louisville was known nationally, it was for basketball and the two national championships it won in the 1980s, but even that program was in decline.

Jurich’s friends in the industry advised him not to take the job. But he sensed potential at Louisville, a hunger among the city’s moneyed class to build up the sports program and a willingness on their part to pay for it. Over the course of two decades, he would raise about $280 million in construction funds for stadiums, ballparks, arenas, and state-of-the-art practice facilities. The total does not include the $238 million it cost to build the KFC Yum! Center, an arena with NBA-level amenities built with public money by the city — but for the benefit of the university’s basketball team.

Under Coach Rick Pitino, Louisville’s basketball team won a national championship in 2013. Its annual revenues — more than $45 million in recent seasons — were far and away the highest of any NCAA team. Also in 2013, the women’s basketball team reached the Final Four, the football team defeated fourth-ranked Florida in the Sugar Bowl, and the baseball team reached the College World Series. The university commissioned a documentary, The Year of the Cardinal, and purchased one hour of airtime to run it on ESPNU.

As its on-field success grew, Louisville began to proudly refer to its sports program as the university’s “front porch.” The belief was that its athletics teams, if they were successful enough, could entice people to engage with the rest of the U. of L., as the university is known locally. To the extent this was true, and the massive sports complex that rose on the eastern edge of campus really became the gateway to the university, it was a little like having to walk through a Las Vegas casino, past the slots and blackjack tables, to reach your hotel room: It let you know what’s important.

Jurich had a partner in the university’s expansionist-minded president, James. R. Ramsey, who took the helm in 2002. As the sports program ascended, the rest of the university followed along — to an extent. The campus was beautified, and students moved into newly built dormitories. There was increasingly life after dark: a bar and a restaurant scene, some music venues. The city’s longtime mayor, Jerry Abramason, said of Ramsey, “For the first nine or 10 years, he did it all right. He was a superstar.” (The academic aspects of the university did not mirror the meteoric rise of its sports teams — it was ranked 171st in the 2019 U.S. News rankings, tied with Ball State University and Rowan University, among others.)

Thanks to Ramsey and Jurich, Louisville was an example of how to build an institution of higher learning out of an athletics program — right up until the moment when the whole thing blew apart.

Emily Bingham, who was appointed as a trustee in 2013, is not someone content with sitting obediently and keeping quiet. She is a scion of the Binghams of Louisville, one of the South’s storied families (“the Kennedys of inner America,” Vanity Fair magazine once called them) and the former owners of The Courier-Journal of Louisville. The Binghams’ politics are liberal, and their newspaper reported aggressively.

Bingham has a Ph.D. in history from the University of North Carolina, has taught at several colleges, is an author of some note, and when appointed a trustee was the only academic on the board not employed by the university. She joined a couple of other trustees who had been persuaded to serve by the state’s governor and lieutenant governor at the time, both Democrats. Bingham and her small faction on the board were also Democrats, but the coming divide was more cultural than political.

Bingham’s like-minded colleagues were Steve Wilson, who had married into the Brown-Foreman bourbon family (Jack Daniel’s), and Craig Greenberg, a lawyer and a partner with Wilson in 21C, a chain of boutique hotels in midsize cities, with lobbies that double as art galleries. They were not opposed to sports, but they did not believe that sports should be the university’s leading edge. “We tried to put people on the board who would ask questions,” the lieutenant governor said.

Like all new trustees, Bingham was given an orientation, in which she was informed of the board’s customs and ways of doing business. One important bit of guidance was that trustees should avoid asking any questions of substance at public meetings of the board, which were open to the press. The real discussions, she was told, take place in the president’s box at football and men’s basketball games, as everyone is wearing red and enjoying the buffet and open bar. “I thought, ‘That’s not going to work for me,’ " she recalled. The atmosphere of cheering for the sports teams carried over into the boardroom. “You were either a cheerleader or an enemy,” she said.

Ramsey is an economist whose career had been divided between teaching at a handful of universities and working in state government. He grew up in a hardscrabble part of south Louisville, as he liked reminding people in a manner that could seem pointed, especially in contrast with that of the new trustees. He handpicked many of the other trustees, who were his loyalists and fans. In addition to serving as president, Ramsey was also president of the University of Louisville Foundation, which controlled the endowment.

Ramsey and Jurich, the athletic director, worked well together mostly by staying within their own spheres. They had what one associate called “a mutually beneficial détente.” Jurich was a prodigious fund raiser, and Ramsey was able to share in the credit. When Jurich threw his loyalty behind coaches who came under fire, Ramsey did not interfere.

Both men were paid high salaries, something reflected in the university’s bookkeeping in less than straightforward ways. This theme — hazy finances — would later come out in a forensic audit of the university ordered by the state.

In 2015, Bingham and some others on the board began raising concerns about Ramsey’s salary (Ramsey topped the Chronicle’s latest executive compensation report, receiving more than $4.2 million in total pay during the 2016-17 academic year), and particularly the practice of paying him “gross-ups” — basically, paying his taxes for him. Another trustee, Ron Butt, came to Ramsey’s defense, comparing his performance in guiding the university to the accomplishments of a superstar athlete. “How are you going to put a price tag on Michael Jordan if he comes to play for your team?” he said. “Are you going to pay him more than everybody else? Yeah!”

Later that year a local escort, Katina Powell, published a book revealing that she had arranged parties in the basketball dorm over the course of four years — and that they had been paid for by a member of Pitino’s staff. (The scandal became known as “Strippergate.”) The news only darkened feelings about Pitino, who had his own sexual baggage. (In 2010 he testified in a federal criminal trial of a woman with whom he’d had sexual relations in an Italian restaurant after closing time. Pitino, who was married, had just met her that night. “Some unfortunate things happened,” he told a packed courtroom. The woman involved would later serve six years in prison for trying to extort money from Pitino over the incident.)

In the spring of 2016, Emily Bingham wrote a column signaling that her frustration had finally boiled over. “A core responsibility of a board is employing and paying its leaders, yet we have been lied to about the president’s compensation,” she wrote. “We cannot move forward without honesty from the leader we employ.” She referenced “countless rumors of self-dealing” and “conflicts of interest,” a lack of “complete information” and a “culture of theft.”

She then took on the athletics program, and Pitino in particular: “In a basketball program already embarrassed by the sexual misconduct of its coach, egregious alleged sexual misconduct by employees and players was never met with clear, forceful condemnation from the president. Waiting for years for NCAA judgment is unacceptable. We cannot move forward with leaders whose moral compass on these issues is not clear.”

A vote of no confidence in Ramsey had come up for a vote and narrowly failed, and the board’s president composed a broadside against the dissident trustees behind the vote. “These problems of the Board of Trustees began in 2013 with a core group from a zip code in the east end,” he wrote, making it clear that he felt his opponents were effete. “This group has been relentless in pushing forward with incessant negatives and attempts to micromanage the university. I haven’t seen anything positive from them since they were added to the board; they have added nothing constructive to the debate or to the life of the university.”

An emphasis on athletics at a university — which always means the revenue sports of football and men’s basketball — tilts the conversation toward men. They know the sports intimately. They read the recruiting blogs. They have the strong opinions on coaching strategies; if an official makes a poor call during a game, they are the ones most likely to shout their displeasure — even if they are in the president’s box and splash their bourbon while doing so. (The bar’s open; you can always get a refill.)

At its most extreme, the focus on sports boils over into misogyny. Bingham got hate emails from Louisville sports fans, some of them crude in nature. Feeling under siege, she privately told Pitino that she regretted her remarks — and had meant to direct her fire more at Ramsey and to issues involving governance of the university.

The unraveling of the Ramsey-Jurich-Pitino regime at Louisville occurred in stages. It was a slow-motion but chaotic drama that featured the daylighting of the university’s tangled and troubling finances, which were, by design, nearly indecipherable. A new Kentucky governor, Matt Bevin, a Republican, fired all of the university’s trustees in 2016, was ordered to reinstate them by a judge, and then, after figuring out how to do it legally, fired them again. Ramsey was swept out after Bevin requested and received his resignation.

A constant throughout the process was the backbiting and backstabbing among people who were once allies. At the center of much of this was John Schnatter, founder of Papa John’s Pizza. Referred to by almost everyone in town as “Papa John,” Schnatter lives in a 40,000-square-foot house, with a 22-car underground garage, in a Louisville suburb. The 16-acre grounds include man-made ponds and a three-hole golf course. (“Who would’ve imagined pizza could build this?” Mitt Romney marveled at a fund raising event that Schnatter held for him during his presidential run. “Don’t you love this country?”)

Schnatter had contributed an initial $5 million for the naming rights of Papa John’s Cardinal Stadium, which some considered a bargain after the football program soared to national prominence. He later contributed millions and never let on, at least publicly, that he was anything but a gung ho booster of Jurich, Pitino, and Louisville sports. (Schnatter was also close with the prominent conservative donors Charles and David Koch, and has combined with them to fund institutes of free enterprise at Louisville and at the University of Kentucky.)

In the spring of 2017, Schnatter was a member of the newest iteration of the Board of Trustees when he abruptly went negative on the athletic department. “The athletics thing scares me,” he said at a board meeting. “Until you fix athletics, you cannot fix this university.” (Schnatter, who more recently has been the subject of unflattering stories having to do with racial epithets he used during a conference call, is no longer on the Louisville board or involved in the management of Papa John’s.)

After Schnatter turned on him and Louisville sports, Pitino henceforth referred to him as “the pizza guy,” or sometimes just “pizza boy.”

Whatever Schnatter’s motivations were — and however unlikely it was that the right-wing pizza magnate would end up on the side of Emily Bingham and her friends — he was not wrong to be alarmed about the state of affairs. His swings were big and wild at times, but mostly on point. He asked why the football stadium was being expanded yet again while attendance at games was falling. He described a “perception problem” with big spending for sports while faculty salaries were stagnant. He shifted his giving from athletics to academics and was not among the donors to the latest enhancements of the football stadium (no longer named for Papa John’s).

In June 2017, a few months after Schnatter went public with his criticism — and three months before an FBI investigation of corruption in college basketball brought down Pitino and Jurich — the long-awaited forensic audit of the university, ordered by the state, was completed. The audit was dense, but its conclusions were not complicated: The university was like a household living beyond its means. Its ambitions and taste for luxury exceeded its available resources. To make ends meet, it was dipping into its endowment to cover a range of expenditures, including operating expenses and salaries. Members of the administration had gone to great lengths to conceal some of the least justifiable spending.

The audit’s main finding was that up to 10 percent of the university’s endowment had been liquidated and that the university was dipping into it at a rate that could eventually exhaust the whole fund. Some of the money went to questionable real-estate endeavors and to investments in poorly performing start-up companies.

The athletics department featured prominently in the report. The president’s office was purchasing about $800,000 in season tickets annually for football and men’s basketball games, using endowment funds to do so. The “ticket purchases contributed to the ULF [University of Louisville Foundation] liquidation of Endowment Pool assets,” the report said, meaning the spending down of the endowment. Some of the seats were given as gifts to prospective donors. The president’s office supposedly sold some other seats, but there were no records of the sales or indications that they brought in any money.

Endowment funds were used to buy a golf course for the men’s and women’s golf teams. They were used to pay portions of Jurich’s deferred compensation and to fund his “gross-ups.” The foundation had engaged in some complex transactions with the University of Louisville Athletic Association (the funding arm of the athletics department) in which it seemed to get the short end of the deals. In one such case, the report said, "[the foundation] spent $15.1 million on ULAA’s behalf for which it only received $11.6 million in consideration.”

The spending on sports was part of a larger, universitywide trend. The auditors uncovered a 2012 memo from the foundation’s investment adviser warning that if the foundation continued its current practices, “There is a non-trivial chance that the endowment could cease to exist within the next 20 years.”

Most of the nearly 300-page document was dry, but efforts to keep certain transactions and expenditures out of public view came across as almost comic. An assistant to Ramsey wrote to the foundation’s lawyer about some of the deferred-compensation deals. “How can we keep these … from being subject to ORR?” — open-records requests. “I am certain that Dr. Ramsey does not want any of these to end up in the hands of the [Louisville Courier-Journal].” In her emails, she expressed concerns that the limited liability companies, or LLCs, created to pay certain expenditures might be too easily discovered by reporters.

One such LLC is named Minerva. Ramsey’s assistant proposed taking most of the vowels out of its name, making it MNRVA.LLC. The foundation lawyer, apparently unconvinced that excising the vowels was advisable (or, alternatively, that it provided the sufficient subterfuge), wanted to give it more thought.

A sense pervaded Louisville that after a couple of decades on the rise, the university had irrevocably embarrassed itself.

In 2015, pictures had emerged from a Mexican-themed Halloween party held by Ramsey for his staff. He and some other partygoers were dressed in multicolored ponchos and sombreros; some also wore fake mustaches. The university now had high aspirations, and the photos were not in accordance with them. Louisville apologized in a statement addressed to “Hispanic/Latino Faculty, Staff and Students” and pledged to “institute immediate training on diversity and racial equality issues.” (Even that was embarrassing. Did administrators really need diversity training to know not to dress up as fake Mexicans?)

Then there was the extraordinary step taken by the university’s accreditor, the Southern Association of Colleges and Schools in January 2017, placing Louisville on probation. The group had decided that the university was in chaos. Governor Bevin’s firing the trustees and asking for the resignation of Ramsey were particularly disturbing to the accrediting body, which was alarmed that the university was being run by a political figure rather than a governing board and the academic leadership.

If the university did not come into compliance, the association warned, “removal from membership” — which would have made its diplomas worthless — was an option. No one really thought that such an extreme measure would take place, and the probation was lifted 12 months later. But to be penalized by its accreditor was a terrible mark against the institution.

Then, in the fall of 2017, the FBI announced the arrests of 10 men in a wide-ranging investigation of college-basketball recruiting. A central thread in the government’s case was the recruitment of Brian Bowen Jr., a top high-school player from Michigan who had committed to play for Louisville. Prosecutors said Bowen’s father had been promised $100,000 — money that was to have come from Adidas, a Louisville sponsor. According to court documents, only $19,500 ever made its way to Bowen’s father. Pitino and Jurich were put on leave, then fired. (Pitino has vehemently denied that he knew anything about money changing hands to induce Bowen to attend Louisville.)

As athletic director, Jurich gave Louisville — the city and the university — more than it ever expected. Entry into the Atlantic Coast Conference. The sense of being a pro-sports town even without a professional franchise. Everything was tops, even the university’s dance team, which repeatedly won the National Cheerleading Association championship.

Perhaps as a result, there is a great deal of support left for Jurich in Louisville. Jim Patterson, a big donor whose name is on the baseball stadium, urged Greg Postel, the interim president earlier this year, to spare Jurich after the recruiting scandal hit. “We are flying at 40,000 feet,” he wrote. “Does it make sense to turn the engines off now?” Another donor, Max Baumgardner, revoked his $6.3-million bequest to the athletics program and redirected the money elsewhere in the university.

The letter that Postel sent to Jurich informing him that he was fired was, in some respects, absurd. It made it seem as if the university, two decades into his tenure, had just discovered the nature of his management style. It said he had engaged in “willful misconduct,” brought disrepute to the university, and engaged in “divisive leadership, unprofessional conduct, and a lack of collegiality best characterized as intimidation and bullying that extends from the student government to the University’s senior leadership.” Of course he had — and much of the Louisville administration had known it for more than a decade.

In May 2018, the university changed course and settled with Jurich. It gave him $7.2 million, plus medical coverage and 20 years of prime tickets to football and men’s basketball games. It retreated from the position that he had been fired for cause and said he had retired.

Tom Jurich had worked extraordinarily long hours — there were really no waking hours that he was not working — because wherever he went, he was representing and selling the university. He figured that even with his high salary, the university got a bargain. When he started at Louisville, the entire budget of the athletics department was around $15 million. By the time he left, it was $104.5 million.

“I was a B student, but I understand people,” he told me when we talked last fall. “They all knew that I thought big. That’s what they hired me to do. Nobody, the whole time I was there, ever expressed to me — sports is getting too big. How could I have known? I did what they hired me to do. I gave them what they wanted.”

Michael Sokolove is a contributing writer at The New York Times Magazine and the author of The Last Temptation of Rick Pitino: A Story of Corruption, Scandal, and the Big Business of College Basketball (Penguin Press, 2018), from which this article is adapted.