College Sports

The Economics, Ethics, and Excesses of the Games We Love

A new book by Charles Clotfelter ’69, Big-Time Sports in American Universities, sparked the annual Duke Magazine Forum, which was part of Reunions Weekend in April. Clotfelter is Z. Smith Reynolds Professor of public policy studies and professor of economics and law at Duke, where he has taught since 1979. Other participants were Alan Fishel J.D. ’86, lead counsel for the Mountain West Conference and Boise State University on issues related to the Bowl Championship Series; Nancy Hogshead-Makar ’86, a prominent advocate of Title IX, professor at Florida Coastal School of Law, and an Olympic medalist in swimming; and Chris Kennedy Ph.D. ’79, deputy director of athletics and part of the Duke Athletics staff since 1977, where he oversees the compliance and academic-support areas as well as coordinating the department’s Title IX efforts. The moderator was James E. Coleman Jr., John S. Bradway Professor of the practice of law, who teaches criminal law, legal ethics, negotiation and mediation, capital punishment, and wrongful conviction.

JAMES COLEMAN: If you want to know what’s going on in college sports today, all you have to do is to read the headlines: “The Aggies Beat Irish for First NCAA Title”; “UNC Admits to Academic Misconduct in Football Program”; “NCAA Conference Realignment: Winners and Losers”; “What’s Missing for March Madness? Better Academics”; “As Colleges Compete, Major Money Flows to Minor Sports”; “Ambition Beyond Athletics”; and finally, “Kyrie Irving Is Leaving Duke for the NBA Draft.” The important questions that these headlines pose for universities such as Duke is reflected in the title of a report recently released by the Knight Commission on Intercollegiate Athletics: “Restoring the Balance: Dollars, Values, and the Future of College Sports.”

We are fortunate to have here several individuals who have been at the very center of these issues.

CHARLES CLOTFELTER: I took it for granted as I grew up that teams representing universities like Georgia Tech and Duke would play each other in games with many thousands of people at the stadium, listened to by people on radio, and widely reported in newspapers. But, if you think about it, it’s a little bit strange—to have institutions that are dedicated to research and teaching and service to also be in the commercial-sports business. Well, they’ve been this way for almost a century. And in fact, the U.S. is the only country in the world that has universities that do commercial sports.

In my research, I looked to see if this thing really is a big deal, the way I thought it was when I went to Grant Field in Atlanta to see Bobby Dodd’s football team. Well, it is a big deal. Here are a couple of examples of the kind of measures that I looked for: I looked at a whole year of New York Times articles about any one of fifty-eight universities, all with big-time football and basketball programs; Duke is included in that. There were 601 articles in the very serious New York Times; 87 percent of those had to do with athletics. I said, “I wonder who gets more Google hits, the president or the football coach or the basketball coach?” It turns out in these fifty-eight universities, the average ratio of football coach hits on Google to the president was seven to one. Only with two of the fifty-eight universities did the president get more Google hits than the football coach. In basketball it was a little bit less; it was four to one. You might wonder what it is at Duke. It turns out that our football coach out-Googles our president by almost two to one. Basketball, it’s more: thirteen to one.

The salaries of football coaches and basketball coaches have skyrocketed. In twenty-four years, if you take inflation into account and you make these as comparable as you can, at forty-four universities, it turns out that football coaches’ salaries went up 650 percent where university presidents’ only went up by 90 percent.

You can look at entire volumes about research on universities, and you can look at research on admissions and new realms of knowledge and interdisciplinary work. You can go and look at entire volumes and not see the first mention of intercollegiate athletics. It’s almost as if this topic is verboten.

You look at university mission statements, and it’s the very rare mission statement that mentions athletics, let alone big-time sports. So that was the paradox that got me working on this thing. How can this be so big yet ignored?

ALAN FISHEL: What we’re looking to do is make sure we’re teaching kids the right lessons. Right now you have a situation in which certain teams, certain players, certain individuals will never have a chance [to compete in the Bowl Championship Series]. And I know how hard they work all year to try to win a football championship. And yet their teams are eliminated before the season even begins.

We teach in the classroom that you do your best, you’re going to have a chance to really succeed. And here, you’re kind of being kept a level down from that.

If we’re going to have athletics departments, it would be great if there was a way that they would actually not lose money and drain from the academic side. One of the ways for them not to lose money is to have some sort of playoff that’ll bring in probably close to a billion dollars a year, in the not-too-distant future, which would be then split among 120 schools. It would help tremendously with not only athletics but also with academics, with balancing budgets.

Nancy Hogshead-Maker

Hogshead-Maker: Rein in spending.
Jared Lazarus

NANCY HOGSHEAD-MAKAR: We’ve known for a long time that athletes, particularly in high school, do much better in school [than non-athletes]; they get better grades, better standardized test scores, and they’re more likely to go to college.

Recently, a researcher named Betsey Stevenson did some research using Title IX, looking at what happened with Department of Education data. Before Title IX, we had very few women in high-school [sports]; I think it was fewer than 300,000. And very quickly those numbers jumped up. But they jumped up very differently for different states. When you take out the kind of family that they came from— urban, rural, or suburban school; whether the parents had a library card; how much education their parents had—even when you factor out all those variables, they got more education, they were much more likely to go into nontraditional fields of engineering, science, medicine, and law, and they’re far more likely to be full-time employees with higher wages.

So sports for women have been a real opportunity for them to be part of games that have made lifelong changes for the rest of their lives. And there’s no reason to think that the same thing wouldn’t be true for boys as well.

Right now with intercollegiate athletics, two sports [football and basketball], according to the Knight Commission, are a runaway freight train when it comes to their expenses. Yes, they’re bringing in more money, but they’re spending more than they’re making. And when you talk about revenue, that revenue includes donations. If you take out the fourteen schools right now that are currently in the black in their athletics department, the average loss is $10 million from academics, over into athletics—$ 10 million per year.

The myth is that if there was more money in the system then things would be fairer. This is where I disagree. Right now the SEC [Southeastern Conference] spends $122,000 per athlete per year. So they’re putting more and more money into fewer and fewer athletes, rather than expanding the pie. Most of these schools, particularly BCS [Bowl Championship Series] schools, could triple the size of their athletics department and still not satisfy demand. They’re going to a model that’s very expensive, and it’s all about recruiting the athletes rather than making a better athlete or making a better student.

Title IX

Title IX: After James Madison University cut ten athletic teams, protesters held a “Run for Fairness” rally.
Associated Press

CHRIS KENNEDY: I want to back up a little and provide a little historical perspective. Lately I’ve been digging around in the university archives, around the early years of Trinity College football and the [1895] ban of football and the [1918] reinstatement.

Our perspective sometimes is that college athletics is becoming ever more corrupt: more cheating, more recruiting violations, more ineligible players, more academic fraud, and so on. William Preston Few, who was president of Trinity College and then later oversaw the transformation of Trinity College to Duke University, wrote an article in the 1906 South Atlantic Quarterly called “Excessive Devotion to Athletics.” In it he talks about the use of ineligible players, the desire for victory at all costs, and how this excessive devotion to athletics has done considerable harm to American education. In the same article, he says, “But college athletics have a value, a value that deserves to be protected from the evils that now actually beset them and the perils that lie in the future for them.” So, President Few was no apologist for athletics, but he understood the value of athletics in an educational setting, kept in perspective and properly managed.

Chris Kennedy

Kennedy: Begin with historical perspective.
Jared Lazarus

My point is it’s a much bigger operation than it used to be. As Nancy points out, it’s a much more expensive operation than it used to be. But that thirst for victory, the desire to win, the desire for your group to be better than other groups, is nothing new; it has animated athletics forever. And Coach Al Buehler, who teaches the history of sports, sitting in the audience, can tell you that cheating is as old as the Greek Olympics.

You know, even the concept of the dumb jock comes from antiquity. There was a wrestler, a famous wrestler in the Greek Olympics, called Milo of Croton, and Milo once boasted that he could pick up a bull, carry it all around the stadium, and butcher it on the spot. And some Stoic philosopher said, “Well, yeah, that might be true, but the bull when it was alive could have done it with a lot less effort and about the same amount of brain power.”

The problems [today] are a bigger magnitude, but they’re the same problems. We wrestle with the same issues today that President Few wrestled with in the beginning of the [last] century, at the beginning of Duke University, and at the very calculated decision to bring Wallace Wade to Duke and to emphasize specifically football at the time, because he believed, he said in a letter to his daughter, that he had always placed the moral and the physical above the intellectual in the education of boys.

James Coleman

Coleman: How to change college athletics for the better?
Jared Lazarus

COLEMAN: So here’s my question to the panelists: What’s the one change that could be made in college sports that you believe would have the greatest positive impact? And then the second part is to explain briefly why you believe such a change will or will not happen in the near future.

CLOTFELTER: I think paying players would have a tremendous effect, but I don’t think that it would be a wise thing to do. I would say something on the order of, let’s be candid about the true role of commercial sports in our universities. If you look at American universities, we hold seventeen of the top twenty spots in the world. So American universities are doing very well; we could do better, but we are the envy of the world. Of those seventeen universities, five of them have big-time sports. So it’s clear that you can run a university with big-time sports, but what’s going on right now is a curious silence about the role of commercial sports in our university.

Duke is in the entertainment business, and we ought to just admit that and then go on and have a discussion that’s worthy of our own traditions of truth-telling. Should the NCAA be advertising beer on television? Is it right for our universities to forbid the writing under your eye? You can’t now put “Psalms 23:1,” as you used to be able to do; it’s against the rules. But if your university is sponsored by Nike, you have to put the swoosh on and you can’t cover it up. So I think the good thing that would come out of a candid recognition is an honest discussion about the pros and cons.

FISHEL: The NCAA really needs to make its rules a whole lot clearer. I think they then need to try to do much better with consistent enforcement. From everything we’ve seen in the last year, its enforcement is inconsistent [and often] delayed, which one can really, really question. I’ve heard complaint after complaint over the years about how the NCAA rules are the same size as the IRS tax code and completely not understandable.

HOGSHEAD-MAKAR: If there was one change that we could do that would make the biggest difference, it [would be] to decouple this idea of winning with more money from the NCAA. If money was given out not based on win-loss records but based on things like graduation rates, if it was based on things like compliance with gender equity, you could come up with any rubric that you want to. But as long as money is derived from win-loss records, it’s like we can’t be saved from ourselves.

Right now it’s impossible to constrain costs. The NCAA lost two major antitrust lawsuits, one called Board of Regents, which said that the NCAA can’t put any constraints on television contracts and television revenue. So that’s where you got the big conference system right now. And the second one had to do with coaching salaries. The NCAA tried to say the lowest-ranking basketball coach was going to get paid a certain amount of money. Well, they lost to the tune of—was it $42 million?

FISHEL: Something like that, the Law case.

HOGSHEAD-MAKAR: Right, Law v. NCAA. When it comes to the spending, when it comes to the commercial part, the NCAA is completely powerless, they can’t do anything about it. So it’s about change coming from outside the system, whether it be [Alan’s] group or whether it be some kind of antitrust exemption or whether it be one that Secretary of Education Arne Duncan just recommended—that you would not be able to play if you don’t have a certain graduation rate.

So much money is spent on, [gasps] “Come to our school, and we’ll treat you like a prince!”; “Come to our school, and we’ll treat you like a king!”; “Our school? A czar!”

That creates all these ancillary problems, not the least of which is the risk of sexual assault by athletes. In the Lisa Simpson v. University of Colorado case, [we learned that] basically the recruits were told, “Hey, come here, you get laid!” And, you know, Lisa Simpson got raped as a result of their attempts to try to recruit these athletes.

Everybody is trying to get these very few athletes that are out there, and they’re spending a lot of money that has nothing to do with making a better product. As an athlete myself, I can tell you what it takes to be a great athlete. It does not take $122,000 a year to be a great athlete.

KENNEDY: As somebody who spent more than thirty years thinking about the welfare of individual student-athletes, one of the things that has changed over the years from when I played a long time ago, and even from when Nancy was here, is the amount of time we demand of our kids. In theory, they can’t put in more than twenty hours a week, but that’s only for required things; for voluntary things, they can spend all the time they want or they think they need to. And it isn’t just the amount of time in a week or a day, it’s the amount of time in a year. You know, the football players don’t go home anymore. They’re here all summer so that they can voluntarily work out.

It’s particularly in football and basketball, but what happens in football and basketball trickles down to the other sports. And so the experience of a soccer player now is very different than it was thirty years ago, and very similar to what a football [player’s] experience was then.

Title IX

Branded: For better or worse, Duke’s reputation is inextricably linked to its athletics success.
Jon Gardiner

Question from the audience:
One of the things that kind of saddens me—and I’m at my fiftieth reunion—is I remember the basketball team was really wonderful fifty years ago, and we were all very excited and proud, but it wasn’t the most important thing about Duke. So maybe we really need to look at the fact that athletes have become huge celebrities in our society. And it starts when they’re in high school. I sat on the plane yesterday coming here, and there was a young boy sitting next to me. He was thirteen years old, and he was already competing with a national team in soccer. I’m concerned about what’s happened to our values system.

CLOTFELTER: I think the question really does relate to our relative emphasis on educational attainment and athletics. The bottom line here is, because of all the TV and all the exposure, schools actually compete for students through their athletes. In other words, Florida wins the National Championship in football, enrollment goes up 40 percent.

HOGSHEAD-MAKAR: Something that really troubles me that doesn’t have to do with intercollegiate athletics, but with how our youth sports system right now is changing, is the Tiger Woods model of athletes getting more and more focused on their sport at a younger and younger age. Two, it’s really bad for our society to be having a sports model system that weeds out the obese. It weeds out somebody with any kind of disability. It weeds out a late bloomer. It weeds out people who really could be great. If you don’t make that travel team by the time that you’re twelve years old, then you’re out of the system, you’re gone.

Question from the audience:
There’s been a lot of talk in the media about the advisability of sharing the revenues that the sports generate with the college athletes who participate in those sports. And Professor Clotfelter, you made a comment early on about how you felt that might have some deleterious effects, and I would like you to elaborate on that.

Charles Clotfelter

Clotfelter: Do athletics contribute to a university's mission?
Jared Lazarus

CLOTFELTER: I’ll just give you my economist answer. The first thing is that economists have gone out to try to estimate what the economic value of a really good player is. They estimate that, in football, a player that’s going to be drafted in the NFL is worth about $500,000 to the university in additional revenue. In basketball the number is over a million. You can’t really look at it and say this is fair, because everybody is working in the market except for this one crucial group of laborers, and they are the students. And so their payment is being artificially kept down. That’s the reason why economists call the NCAA a cartel.

Now, that doesn’t really tell you what the answer should be, because if you just do the mental experiment—we’re going to now pay college athletes—much of the mystique, that is all about amateurs out there just fighting for their school, goes away. And it’s hard to know how that would affect things. We have brand names in this industry that are a hundred years old. Michigan, Georgia—these are very old trade names. Part of the mystical and really appealing part of college is that these are kids.

Question from the audience:
I’ve read recently that a lot of schools that go to bowl games actually lose money. And I’ve also read that a lot of these bowls make a lot of money. So the question is, if Duke were to start going to a lot of bowl games, and lost a lot of money, would tuition for regular students have to go up, to pay for that success?

KENNEDY: I’d like to be going to some bowl games.

CLOTFELTER: This would be a good problem.

KENNEDY: The irony of it is, in some ways, because of the way bowl revenue in the ACC is distributed, we actually come off better by not going to a bowl because all the revenue goes into one pot and gets divided twelve ways, and so we don’t have to pay the travel expenses or anything. I don’t really see the connection between going to a bowl and tuition increases. Tuition increases are always going to be with us, bowl game or no bowl game.

Alan Fishel

Fishel: NCAA enforcement lacks consistency.
Jared Lazarus

FISHEL: The only thing I’ll add is that the bowls do make a lot of money. And it’s because of the guaranteed ticket sales. In other words, the schools have to pay for a certain number of tickets to each of these bowls, at a very high price, regardless of whether they actually sell them.

Question from the audience:
My question is for Ms. Hogshead-Makar. I’m an ardent supporter of Title IX, so thank you for all of your work. Some of the flak I get the most is that Title IX means cutting men’s sports, to which I respond that actually there are three prongs of Title IX and that schools can comply in other ways. This doesn’t stop people from arguing with me about the 100 percent decrease of men’s wrestling, especially, and other men’s sports. In a class, we were talking about Title IX, and one suggestion that came up was that perhaps schools should not be allowed to comply with Title IX by cutting men’s athletics. Really you have to be increasing women’s athletics. That’s the point of Title IX.

HOGSHEAD-MAKAR: I have a father, a brother, a husband, and a son who all love sports. So I get it. I know how it would feel if my team got cut. I get it to the bones of my body what that would be like.

There’s one place in all of education, one place only, that’s cutting right now, and that is Division I in the NCAA—high school, Division II, Division III, which are much bigger than Division I, are not. What [Division I] is doing is putting more money into fewer athletes. So it’s really unfair to blame Title IX. Would I be in favor of some kind of rule that said that you couldn’t cut a men’s sport in order to comply? Absolutely. But that’s not really appropriate for federal civil rights law. That’s appropriate for the NCAA. They could adopt that rule tomorrow.

They also have rules that say you have to have a certain number of men’s sports and a certain number of women’s sports. They could up that. But it’s really not a civil rights issue, that’s an institutional rule that could be changed.

The vast majority of schools, about 77 percent, have not cut any sports to comply with Title IX. Cal Berkeley [did, but] they had a $12 million-a-year budget shortfall. At the same time, they had over a hundred serious roof leaks. They had furloughs that had their professors making less than minimum wage. They had one person that was responsible for the entire Cal Berkeley grounds. I mean, they had major budget issues. Something had to give there.

KENNEDY: You know, we pay attention to the numbers, we pay attention—we’re never going to cut sports, except at the point of a gun. We absolutely don’t want to do that. And we want to maintain our broad-based programs; that’s one of the things we’re proudest of, twenty-six programs. But we never want to lose sight of the fact that our student-athletes have to feel every day, in their daily lives, that they’re being treated as well as they can be treated and they’re having the best experience they can have.

Watch video of the full Duke Magazine Forum

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