The National Collegiate Athletic Association, in a bid to justify its federal tax exemption, said last week that although big-time college-sports expenses continue to rise rapidly, athletics programs still have a largely educational mission.
In a 25-page letter to Rep. Bill Thomas, the California Republican who is chairman of the U.S. House of Representatives Committee on Ways and Means, Myles Brand, the NCAA’s president, said that institutions in the association’s top two divisions provide $1.5-billion a year in athletics scholarships, much of which goes to low-income students who would otherwise not be able to attend college.
Mr. Brand’s letter came in response to a sharply worded letter that Mr. Thomas sent the association last month, much of which centered around spending by big-time football and men’s basketball programs and whether increasing commercial interests in those sports have led them to stray from their educational purpose.
While many observers assumed that Congressional interest in the finances of college sports would subside in January, after Democrats take control of the House of Representatives and Senate, that does not appear to be the case.
Last week Sen. Charles E. Grassley, the Iowa Republican and chairman of the Senate Finance Committee, along with Sen. Max S. Baucus, the Montana Democrat who will become the committee’s new chairman in January, announced plans to hold a hearing on December 5 on potential tax abuses by colleges and universities. (See article on Page A31.)
According to committee staff members, the hearing will not focus on problems with big-time sports programs, but will very likely touch on them.
Lessons Learned
In his letter to the Ways and Means Committee, Mr. Brand said that the money brought in by the biggest college football and men’s basketball programs — $2.4-billion annually — helps subsidize participation opportunities for the 380,000 athletes in all three NCAA divisions, and that football and men’s basketball programs offer as much educational value as other sports.
“The lessons learned on the football field or men’s basketball court are no less in value or importance to those student-athletes than the ones learned on the hockey rink or softball diamond — nor, for that matter, than those learned in theater, dance, music, journalism, or other nonclassroom environments,” Mr. Brand said.
Mr. Thomas’s letter had questioned why federal taxpayers should subsidize what he described as escalating coaches’ salaries, costly chartered travel, and state-of-the-art athletics facilities.
Mr. Brand said that coaches’ salaries are commensurate with other highly paid faculty members and within the range of reasonable compensation for federal tax purposes. Chartered planes, he argued, often cost less than commercial travel, and typically help athletes miss fewer classes. And universities often pay for new athletics facilities with bonds or charitable contributions.
In response to Mr. Thomas’s concerns about excessive spending in college sports, the NCAA said that intercollegiate athletics programs are no different than other nonprofit organizations that engage in activities designed to increase their revenues.
The NCAA asserted that, like other nonprofit groups, athletics programs should be allowed to increase their visibility by building new facilities and recruiting the best employees.
‘No Crisis’
The main thrust of Mr. Thomas’s inquiry — and some of the most revealing responses from the NCAA — deal with the finances of college sports and what institutions can do to control their spending.
While athletics spending has escalated at three times the rate of overall university budgets in recent years, the NCAA’s letter said that there is “no crisis in athletics finances,” as athletics operating budgets represent only about 4 percent of overall higher-education spending.
Still, the NCAA said, university presidents are looking for ways to reduce potential financial stress in their athletics departments.
Mr. Thomas’s questions suggested that football and men’s basketball programs were the biggest spenders, and the NCAA’s responses showed that to be the case.
Over all, NCAA institutions spend approximately $7.75-billion a year on their sports programs, slightly less than the $7.8-billion they bring in.
The 117 NCAA Division I-A football teams alone spent about $1-billion during 2004-5, while the 326 Division I men’s basketball programs spent about $789-million.
While football is the bigger overall spender, men’s basketball teams actually paid more money per athlete. Athletics departments in the NCAA’s largest division spent $158,000 in 2004-5 on each male basketball player, compared with $74,000 for each football player.
Over all, the NCAA said, athletics operating costs have risen in recent years because of tuition and housing increases, the need for additional compliance personnel, new teams, rising travel and insurance payments, and higher salaries. Many of those expenses, Mr. Brand said, are outside the control of athletics departments.
The NCAA’s letter also responds to the Ways and Means Committee’s concerns about potential academic corruption in college sports.
Several of Mr. Thomas’s questions centered around reports of athletes taking college courses that lack academic rigor and institutions steering athletes toward professors and academic majors that are less challenging.
The NCAA said that faculty members at colleges and universities determine their institution’s courses, standards for instruction, and degree requirements — and the association does not intend to intrude on those decisions.
The NCAA’s letter is available on its Web site.
http://chronicle.com Section: Athletics Volume 53, Issue 14, Page A42
