The Department of Lucrative Athletics

An opnion by Gilbert Gaul, published in the editorial section of the November 28, 2009, editon of the New York Times, pointed to the concern over escalating costs of intercollegiate athletics and the recent report from the Knight Commission on Intercollegiate Athletics of the unsustainable spending on football and basketball coaches at NCAA Division I Football Bowl Subdivision member schools. The op-ed is published below:

“EVERY few years, college presidents feel a need to go public with their concerns over the commercialization of intercollegiate athletics. The report last month by the Knight Commission on Intercollegiate Athletics, which warned that an arms race in spending on coaches at top programs is unsustainable, was the latest opportunity.

To be sure, costs are soaring, with athletic spending at big-time athletic programs outpacing classroom spending by a factor of three to four, according to William E. Kirwan, the chancellor of Maryland’s university system. At the football powerhouses Florida, Alabama and Louisiana State, the head coaches all get more than $3.7 million a year in salary and other income. By my reckoning, that’s more than the combined value of all the scholarships awarded to their players.

College presidents contend that their hands are tied by confounding economic forces. To pay for non-revenue sports like volleyball and track, they depend on their football and basketball programs. But this Faustian line of logic obscures some important points.

The rise of College Sports Inc. didn’t happen by accident. Administrators at many universities have allowed athletic departments to operate independently, like stand-alone entertainment divisions. They have separate budgets, negotiate their own TV deals and, in some cases, employ hundreds of coaches and staff. And as long as they continue to collect ever-larger sums from ticket sales, boosters and television, who is going to tell them to spend less?

Another key element fueling the arms race is the increasingly indefensible tax treatment of sports revenues. Decades ago — before the lucrative television contracts, Internet marketing, Nike sponsorships and luxury boxes — Congress essentially exempted colleges from paying taxes on their sports income. The legislators’ reasoning now appears shockingly quaint: that participation in college sports builds character and is an important component of the larger college experience.

Many booster clubs are recognized as charities under the federal tax code. At Florida and Georgia, to name just two universities, the athletic departments are set up as charities. Universities also have access to tax-exempt financing when building ever-larger stadiums and arenas. Boosters and donors benefit from generous tax deductions when they buy the best seats or endow an athletic scholarship. That’s right: colleges now endow their quarterbacks and linebackers the same way they do a distinguished chair of American literature.

If college presidents really wanted to halt the college sports machine, they could try two options. They could insist that athletic departments operate within their university budgets, like the English or biology departments; or they could ask Congress to rescind the tax breaks on the commercial income earned by athletic programs.

That has about as much a chance of happening as Florida International did at beating Florida last Saturday. Can you imagine a senator from Texas or Pennsylvania embracing the idea of taxing the Longhorns or Nittany Lions? It would be political suicide.

From where I sit, college presidents really don’t want to take responsibility for the college sports mess. To do so would require them to offend their powerful athletic departments and alumni. It is a no-win situation. And as we already know, in college sports, winning is everything.”