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October 27, 2004 - Knight Commission on Intercollegiate Athletics Meets with College Sports Finance Experts and NCAA Board of Directors Chair Robert Hemenway in Indianapolis

WASHINGTON , D.C. — Members of the Knight Commission on Intercollegiate Athletics met today with experts on college sports financial issues as well as the NCAA Board of Directors’ Chair and University of Kansas Chancellor Robert Hemenway, to discuss the ongoing need for the reform of college sports. The meeting, which also marks the Commission’s 15 th anniversary, represents the latest in a series exploring the role of athletics in higher education.

In Indianapolis, the Knight Commission heard testimony from a panel of finance experts, including Peter Orszag, Senior Fellow in Economics Studies at the Brookings Institution; Jim Isch, NCAA Vice President for Finance; Judith Palmer, Vice President/Chief Executive Office and Interim Treasurer, Indiana University and the chair of the National Association of College and University Business Officers (NACUBO) and NCAA task force; and Michael Granof, Professor of Accounting, University of Texas at Austin and steering committee member of the Coalition of Intercollegiate Athletics.

The Knight Commission heard new data gathered in the last two years presented by Orszag, author of the NCAA study “Empirical Effects of Collegiate Athletics: An Interim Report,” released one year ago. The new data, which extends the examination of athletics spending from an 8-year to 10-year period, indicates a rapid and dramatic increase in the level of financial inequality among football programs, with half the total increase accounted for in the past two years alone. The new data further confirms earlier findings that increased operating expenditures for football or basketball do not produce increases in winning, operating net revenue, academic quality or alumni giving. The new research will include an effort to improve data on capital expenditures, a figure important to ultimately measuring full costs.

Hodding Carter III, president and CEO of the John S. and James L. Knight Foundation, commented on the new findings: “The evidence and the conclusions are inescapable. Runaway costs do not equate with winning or more revenue for general university purposes. While researchers continue to try to account for the true costs of athletics, presidents and trustees must continue to focus on this issue of runaway spending with little or no return.”

Carol A. Cartwright, president of Kent State University and chair of the NCAA executive committee, noted: “An accounting of the full costs of athletics is as important to college administrators as it is to the NCAA. And for too long, university leadership has had to base many decisions on incomplete data, with capital expenditure costs not included in standardized athletic department financial disclosures.”

Robert Hemenway, chair of the NCAA Board of Directors, met with Commission members to discuss the impact of market forces on the commercialization of college sports and plans for implementation of the recently adopted academic reforms. The Commission agreed that successful implementation of the reform measures is critical to the integrity of higher education and urged greater emphasis on criteria that demand improvement in retention, and ultimately graduation rates.

Nothing that the Commission was formed 15 years ago this month, members of the Commission also deliberated about its future focus and the significant issues that require leadership for change. William Friday, chair of the Knight Commission, noted at the conclusion of the meeting: “It is clear that the commercialization of college sports and the rising and uncontrollable costs of athletics are two of the most important issues we face as a body – particularly, with the arms race and commercialization of athletics rapidly spreading to youth sports in both scholastic and non-scholastic programs.”

Those in attendance at the Commission meeting included Friday, chair of the Knight Commission and president emeritus of the University of North Carolina; Michael F. Adams, president of University of Georgia; Carter; Cartwright; Len Elmore, ESPN analyst and senior counsel with LeBoeuf, Lamb, Greene & MacRae, LLP; Elson Floyd, president of the University of Missouri system; Thomas Hearn, president of Wake Forest University; Adam Herbert, president of Indiana University; Gerald Turner, president of Southern Methodist University and Clifton R. Wharton, former chairman and CEO of TIAA-CREF. Also joining the meeting were former Commission members John DiBiaggio, former president of Tufts University and Richard Kazmaier, president of Kazmaier and Associates.

The Commission will convene again on Monday, Feb. 7, 2005 in Miami, F la., to continue its latest round of work.

About the Knight Foundation Commission on Intercollegiate Athletics

The Knight Foundation Commission on Intercollegiate Athletics was formed by the John S. and James L. Knight Foundation in October 1989 in response to more than a decade of highly visible scandals in college sports. The goal of the Commission was to recommend a reform agenda that emphasized academic values in an arena where commercialization of college sports often overshadowed the underlying goals of higher education. The Commission, which presented a series of recommendations in a 1991 report, and A Call to Action in 2001, will continue to monitor and report on progress in increasing presidential control, academic integrity, financial integrity and independent certification of athletics programs.

About the John S. and James L. Knight Foundation

The John S. and James L. Knight Foundation promotes excellence in journalism worldwide and invests in the vitality of 26 U.S. communities.