"The Business of College Football" Part 4 -The Cost Penalty
Thursday, November 15, 2007SUSIE GHARIB: College football has never been more popular, but does the pursuit of aglory on the field have a bigger cost for universities off the field? Jeff Yastine reports, as we wrap up our series, "The Business of College Football."
JEFF YASTINE, NIGHTLY BUSINESS REPORT CORRESPONDENT: College football -it`s supposed to be about what happens on the field. But these days, it`s also about what happens in the halls of Congress where the topic of coaches` salaries -- like the reported $4 million a year Nick Saban (ph) will make at the University of Alabama -- is coming under scrutiny. Lawmakers like Cliff Stearns of Florida say you won`t see legislation, but congressional hearings on the subject are a possibility.
REP. CLIFF STEARNS (R) FLORIDA: Here we are in 2007, we`re paying coaches $2.5 million plus endorsements plus TV programs and things like that. What`s it going to be in 10 years? And the money that is so prodigious -- what effect is that going to have on the motivation of the university? Is it a spiraling competitive race, almost like an arms race with these universities?
YASTINE: But others, like sports business analyst Rick Horrow, say the idea of paying a coach $1 million or $2 million for a football program that might earn the school $20 or $30 million in profits makes financial sense.
RICK HORROW, CEO, HORROW SPORTS VENTURES: You`ve got to spend money to make money. So, if you`re the Alabama athletic department, you`re going to pay him $2 million bucks, because he`s going to revolutionize that athletic department and you`re going to get alumni donations more so than ever before and he`s going to worth it over that contract cycle.
YASTINE: Myles Brand, president of the National Collegiate Athletics Association, says it`s only a relative handful of coaches in the top-tier football schools who make those kinds of dollars. Different universities, Brand says, have different priorities.
MYLES BRAND, PRESIDENT, NCAA: Is the value of this individual sufficient to warrant this compensation package? And are they producing the kind of value for the institution in terms of visibility, marketing and I would say most importantly in terms of the education of the young men and women under these coaches` charges? Then they have to make their own decision and defend it.
YASTINE: The issue of coaches` salaries raises a broader question about the nature of college football. How much is too much to pay for a winning program? And has an arms race mentality taken hold, where winning and the money is generates trumps everything else that college football is supposed to be about? Critics like William Kirwan, a former university president, chancellor and now head of the Knight commission on intercollegiate athletics, say you can measure that in how alumni and other donors focus their contributions.
WILLIAM KIRWAN, CO-CHAIR, KNIGHT COMM./INTERCOLLEGIATE ATHLETICS: The private giving at our universities across the country today, about 25 percent of the money comes into intercollegiate athletics. A decade ago, it was about 10 or 11 percent. So it is this aspect that is so troubling to me and I`ve come to be quite alarmed by what I call a distortion in values.
YASTINE: Myles Brand of the NCAA disputes that. In this era, he says, universities and their football programs fill multiple roles.
BRAND: Some so-called reformists would like to see inter-collegiate athletics removed from the campus entirely -- either professionalize it or treat it as if - treat these large institutions as if they`re small league liberal arts colleges. They`re not. They have many missions, including missions of providing types of education that go beyond the classroom. They have missions about producing commercial activity in their communities.
YASTINE: It`s supposed to be an amateur`s game and at most smaller schools around the country, it still feels that way. But add in the big stadiums, multimillion dollar television contracts and corporate sky boxes, and it takes on all the trappings and money of a professional contest. And that is the paradox of college football, maintaining an uneasy coexistence among educating athletes, enriching universities and entertaining fans. Jeff Yastine, NIGHTLY BUSINESS REPORT, Lubbock, Texas.
