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December 13, 2009 - Colleges questioning steep price of winning in athletics

An article published by the Pittsburgh Post-Gazette raised questions about whether the increasing costs for major athletics programs was justifiable with consideration of the challenges of the rest of the academic financial obligations at higher education institutions.  The paper stated that the the costs were extremely high, particularly in a time of shrinking school endowments and rising student tuition and fees.

Amy Perko, executive director of the Knight Commission on Intercollegiate Athletics, stated: "We believe the critical question for presidents and trustees who are making the decision where to apply financial resources is 'What is the mission here?'  We believe there are trends that are not acceptable and not sustainable."

Data from the Knight Commission's College Sports 101 report states that the 2007 median budget was approximately $40 million for big-time athletic programs, and climbing at an annual rate approaching 7 percent.  However, revenues are not keeping pace with expenses. The NCAA estimates that in a given year only 20 to 30 athletic programs actually generate enough external revenue, such as TV broadcast payments and alumni gifts, to cover operating expenses.

A recent NCAA study found 94 institutions ran a deficit for the 2007-08 school year, averaging losses of $9.9 million.  University or government support is necessary to make up the shortfall, money that presumably could otherwise be used for academic programs and activities.

Coaching salaries were also discussed.  Mack Brown, head football coach at the University of Texas, recently signed a contract worth more than $5.1 million per year through 2016.  Brian Kelly recently left the University of Cincinnatti to coach Notre Dame University's football team.  Notre Dame recently terminated the contract of Charlie Weis, and will bay $18 million in severance.  Said Cincinnati receiver Mardy Gilyard: "He went for the money. Just blindsided by the fact that it's a business. People lose sight of that. At the end of the day, NCAA football is a business. People have got to make business decisions."

The article posed the question: should college sports programs strive to "keep up with the Joneses" -- their competitors both in games and for recruits -- and pacify rabid boosters by paying ever-escalating coaching salaries, building palatial sports facilities and otherwise increasing athletic spending in search of that winning formula?

"We have been given a charge by our board of governors to be self-supporting and we do that. It's a competitive business and some of the elements that are required are very expensive," said West Virginia University athletic director Ed Pastilong. ""To take the position not to keep up with others would be irresponsible because it affects competitiveness ... but the spending must be done in a responsible manner" with oversight inside and outside the athletic department.

Said Steve Pederson, athletic director at the University of Pittsburgh: "What we've tried to do is stay on pace with the university. It is growing every day in excellence in so many areas and I believe we should mirror that. We want excellence, and excellence does cost money so we do have to have revenues to support that. Fortunately, we have that."