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How to Curb Spending in College Athletics

Nearly a year ago, this article asked, how much is too much when it comes to spending on college football?  Assuming the answer is whatever they’re spending now, the next question is how to reform it.  I have a thought.  What if there was a cap on the amount of money universities could spend on college athletics?  Think about it.  University presidents and other observers are constantly decrying the “arms race” that exists today, yet nothing is done.  The reason: presidents know (or suspect) their counterparts are going to keep on spending and gaining a competitive advantage, and no president is going to risk crippling their athletic programs and alienating the alumni base.

But what if there was an NCAA rule which capped the amount of money you could spend each year?  Or perhaps a luxury tax imposed on those who spend over the cap?

A policy like this would allow presidents to put athletics spending on a more sustainable path, without the risk that competitors are going to exploit it and surge past their teams on the field.  It would help address the concerns faculty and other constituents have about spending at the expense of academics, including the public relations problem of increased athletic spending at a time of shrinking state appropriations and rising tuition for students.  Capping spending also means more schools would have the opportunity to compete for championships.  This is a big one.  Our country’s most popular sport by far, the NFL, has a hard salary cap to help provide all its teams with a realistic shot at taking home the trophy.  Even Major League Baseball, which doesn’t have a salary cap, has a luxury tax that teams must pay if they go over the spending threshold.

But why should the University of Texas be prevented from or penalized for spending as much on its athletic programs as its leadership and alumni please?  This is America after all!  Read its leaderships’ comments on this issue here.  They’re going to spend as much as they can and don’t see a problem with it.  But there is a problem.  Texas, Ohio State and others aren’t operating independently.  They are voluntary members of a conference and an association, with other institutions, upon which they depend for competition as well as the revenue they love to spend.  And the large majority of these institutions can’t and shouldn’t keep up.  Texas President William Powers said you don’t tell Albert Pujols he can’t hit in the 9th inning because it’s unfair to the other team; but that isn’t the analogy that applies here.  More on point would be the Angels can’t stack their lineup with nine Albert Pujolses without paying a hefty luxury tax.  In the NFL, you don’t get a backfield with three Adrian Petersons because you literally won’t be able to field a team and stay under the hard salary cap.  In leagues of athletic teams, rules are crafted to foster competition for the betterment of the league over and above the betterment of individual members.  A spending cap is precisely this type of rule.

An issue that would need to be resolved simultaneously with something like a spending cap or luxury tax is the Division I membership, which simply has too many schools which cannot compete at the highest levels.  I would not advocate for a system which tried to bring Texas football and Louisiana-Monroe football to a similar place in the financial “middle.”  In 2010 for example, Texas spent $25M on football; Louisiana-Monroe spent just under $3M.  They are both playing for the same championship.  That’s a joke and needs to be rectified with a split into more divisions.  But certainly you could do something with the top 50 or 60 (financial) football schools.  Michigan, Miami and Nebraska each spent $18M on football in 2010.  You think those schools are operating on the cheap?  Is there any need for those guys to spend more money?  Of course not, except for the fact Texas is outspending them by nearly 40%.

Whether it’s a hard spending cap or a luxury tax, there are controls that should and could be put into place to control spending in college athletics.  However, they will only happen if the presidents collectively decide it’s something they want to do.  Otherwise Mr. Powers and company at Texas will continue circling the Monopoly board, collecting properties, and charging obscene rent to the rest of the college athletics world.

Follow Daniel on Twitter: @DanielHare.

Future of the NCAA (Part I)

(This is the first installment in a series of posts addressing the future of the NCAA.  There are so many facets to this it wouldn’t do the topic justice to cover it all in one post.  We’ll look at the idea of super-conferences and/or the complete separation of the BCS schools in a future post, as well as the impact of ongoing and possible legal troubles.  Today, however, the topic is enforcement.)

The NCAA has problems, particularly when it comes to the enforcement of its rules.  The problems are now so deep that John Infante in his Bylaw Blog has floated the idea of a federal government takeover of the enforcement program.  Whether it be USC, Ohio State or Miami, recent investigations have been sloppy and endless, with unsatisfying results.

The crux of the issue is the NCAA has an inherent problem with its investigation and enforcement procedures, in that it does not have the same discovery tools at its disposal that an attorney would in preparing for a trial.  Specifically, the NCAA does not possess the power to subpoena witnesses to testify, nor can it compel the production of documents.  Worse, whatever testimony and documentation it does get doesn’t come under oath (with penalty of perjury if it’s untrue), lessening its value.

It must be unbelievably frustrating for the NCAA’s enforcement staff.  Step out of athletics for a moment and imagine a typical legal situation: a guy runs a stop sign and slams into your car.  In the legal system you would have the ability to compel witness testimony (under oath) both in depositions and at trial, as well as compel the production of any and all documents relevant to your case (like for example his expired drivers license!).  In the NCAA system, however, you can’t compel much of anything.  You’re stuck looking for people willing to talk to you and for documents people are willing to share with you.  All of a sudden what seemed like an open and shut case (“he ran a stop sign and slammed into my car”) becomes a lot more challenging, and takes a whole lot longer.  It was these frustrations that apparently led NCAA investigators to find a (potentially unethical) way around these cumbersome limitations in the Miami case.  Perhaps more telling, an NCAA investigator defending the tactics to the Sun Sentinel raises the concern that this wasn’t one individual going rogue but rather manifestations of a much larger cultural issue.

So how can we improve the rules investigation and enforcement process?  It’s true that if the federal government took over it would have all the discovery tools of the legal system and we’d avoid some of these issues.  What comes with those advantages though are several major disadvantages, two of which stand out.  First, as Mr. Infante noted, politics is injected into the process – never a good thing.  And don’t think for a second our senators and congressmen are above getting involved in this.  We saw several key political figures weigh in on conference realignment, and now the Pennsylvania governor and other legislators are trying to bully the NCAA on the Penn State case.  Second, timeliness – you thought the NCAA was slow?  How about the federal government.  The Office of Civil Rights took 14 years investigating a Title IX complaint into USC’s rowing facilities.  14 years! (For more on this check out the Chronicle of Higher Education and the Title IX Blog.)  So there’s definitely a risk that with the federal government you’d be replacing bad with worse.

I do, however, think there is real merit to the idea of outsourcing the enforcement process to an outside group.  It may not have subpoena power, but at least it can operate objectively and without the natural conflicts that exist when you’re policing your own membership (I think this is something that should be looked at with individual campuses as well – outsourcing the investigation / enforcement component of the compliance function to avoid conflicts within the department).  I’d also be interested in exploring the possibility of placing language in employment contracts for coaches and staff, and financial aid agreements for student-athletes, which imposes a penalty for not cooperating with investigations for some limited amount of time after they leave the institution.  This could certainly be financial or for student-athletes it could be something like putting a hold on transcripts.  For non-university people of interest, you could impose penalties similar to what the NCAA currently does for “boosters” found to have participated in violations: no involvement with the university’s athletic program (e.g. can’t donate, can’t sponsor) for some period of time.  Further steps could include bringing the professional sport leagues into the process so that players and coaches can’t avoid cooperating by going to the next level.

The NCAA’s investigation and enforcement process is certainly broken; it will be interesting to see what, if anything, is done in the coming months and years to fix it.  In the meantime, at least the NCAA can say it doesn’t take 14 years to complete an investigation.

 

Follow Daniel on Twitter: @DanielHare