Special report: Coaches hit jackpot in NCAA system – USA TODAY
LOS ANGELES — Moments after UCLA won the Pacific-12 Conference men’s basketball tournament in March, coach Steve Alford and his players climbed a ladder, cut down the nets and took a piece of the nylon string as part of their respective, and very different, rewards.
The players got hats and T-shirts. Alford got a hat and a T-shirt — and notched $40,000 in bonuses. It added to a lucrative year for the new coach — $2.6 million in annual compensation from UCLA, along with an $845,000 signing bonus last spring to cover his buyout and taxes when he left the University of New Mexico.
Alford’s players, by contrast, attend UCLA on scholarships that pay tuition, room and board but fail to cover more than $4,000 a year in living and other expenses, according to the school’s most recent financial report to the NCAA.
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The financial divide between Alford and his players reflects a national trend: College scholarship athletes face thousands in out-of-pocket costs while coaches’ salaries — and revenue from college sports — continue to rise dramatically, a USA TODAY Sports analysis shows. The players in this year’s Final Four attend schools where the gap between their scholarships and the total cost of attendance is about $2,300 to $5,400 a year, according to the schools’ financial reports. Yet the coaches — Kentucky’s John Calipari, Florida’s Billy Donovan, Wisconsin’s Bo Ryan and Connecticut’s Kevin Ollie — are collecting an average of $3.1 million from their schools for this season.
The same four coaches also have racked up a combined $850,000 in bonuses this year, enough money to cover a $4,000 cost-of-attendance gap for 212 scholarship athletes.
Meanwhile, college athletes, who compete as amateurs and cannot be paid under NCAA rules, helped Division I schools generate nearly $11 billion in revenue in 2012-13, research by USA TODAY Sports shows, with more than $4.8 billion going to the 55 wholly public schools among the six power conferences (Big Ten, Pac-12, Southeastern, Big 12, Atlantic Coast and Big East, as constituted at the time). Those schools comprised 16% of the Division I membership but claimed 45% of the revenue, the analysis shows.
But the current construction of college sports — where amateurism and commercialism meet — is headed for an overhaul. How to close the “cost-of-attendance” gap is one of a host of issues advocates for student-athletes — and some federal lawmakers — say should be addressed to bring economic fairness to the system.
“I think it is out of balance right now,” said U.S. Rep. Tony Cárdenas, D-Calif., who last year introduced a bill that would require colleges with high-revenue sports to provide a package of benefits to student-athletes. “In state after state in this country you see the highest-paid state employee is actually a coach. So the bottom line is that always brings in the question: Can these schools do more? I believe that they can. Should the schools do more? I believe that they should.”
This week, the NCAA will bask in glow of the Final Four, the association’s annual showcase. In two months, it is scheduled to be in federal court fighting litigation that seeks to strike down its ban against athletes sharing in the wealth — a case brought by another UCLA figure, Ed O’Bannon, star of the Bruins’ last national championship basketball team in 1995.
The case, along with other litigation and potential legislation, poses the strongest challenge yet to the NCAA’s decades-long financial hold over athletes. The plaintiffs’ argument centers on the assertion that the only remnants of amateurism in college sports are the economic limitations on student-athletes. But for schools and coaches, it’s a highly lucrative business, with 21 coaches in this year’s 68-team NCAA field making at least $2 million this season and the average pay at nearly $1.8 million for the 58 coaches for whom USA TODAY Sports could obtain compensation figures.
Alford’s move to UCLA from New Mexico last year netted him the largest pay increase — more than $1.4 million — of any public university basketball coach who appeared in the tournament both years. Yet it leaves him well short of the richest coaches. Duke coach Mike Krzyzewski pulled in nearly $10 million in compensation in 2011, according to the university’s most recently available tax return, making him one of the highest-paid coaches in all of sports. Louisville coach Rick Pitino is making nearly $5.8 million this season, as much as some of the top-paid NBA coaches earn.
Robert Carey, an attorney with Hagens Berman Sobol Shapiro who is involved in several lawsuits against the NCAA, says Alford’s deal is another example of “the problem in collegiate sport.”
“On the one hand you’ve got a coach out there in a hyper-competitive market being paid enormous sums because what he’s bringing to the enterprise is valuable, but the more valuable component, the student-athletes — the ones who in any other context of sports are paid the most — can’t even get enough to get their school completed. And that’s just not right,” Carey says.
EDUCATION OR BUSINESS?
Sitting in front of his locker during the Pac-12 tournament in Las Vegas, UCLA forward Tony Parker considered the current limits on student-athletes.
“It’d be cool for them to give a little back to the players,” he said. “But whatever the NCAA does, you have to support them because those are our bosses.”
UCLA athletics director Dan Guerrero declined an interview request, as did school Chancellor Gene Block.
The NCAA has in general withstood court challenges to its power because the association has successfully argued that athletics is subservient to its primary mission of education. Regulations concerning athletes’ eligibility, therefore, are part of the NCAA’s mandate to protect the academic integrity — and non-profit, tax-exempt status — of its members.
If sports is the NCAA’s secondary mission, it is a booming sideline, sparking billions in spending not only on high-priced coaches and athletics directors, but also on new stadiums, arenas and practice facilities. An $11 billion business is nearly twice as big as the NBA, exceeds Major League Baseball and is comparable to the NFL.
To determine an annual revenue figure for college sports, USA TODAY Sports used schools’ financial reports to the NCAA, obtained in conjunction with Indiana University’s National Sports Journalism Center through open-records requests to the 231 public schools in Division I. The reports are the best available source for detailed financial information. For the 112 private schools (and three public schools that claim exemptions to open-records laws), a report filed with the Department of Education was used, though that report is less detailed and does not break down revenue sources.
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The $11 billion estimate includes revenue from all sources, including student athletics fees and financial support given to the athletics department by the university. Universities that subsidize athletics programs recoup some of the money because the programs must pay for each scholarship, but at nearly half the public schools the value of institutional support exceeded the scholarship payments. Less than 20% of public-school athletics departments sent additional money back to their universities.
An analysis of what the NCAA labels “generated revenue,” such as money schools collect from TV rights, ticket sales, sponsorships and donations, shows it is the major driver of revenue growth in college sports. Among the 55 public schools in the major conferences, generated revenue amounted to $4.5 billion in 2012-13, an increase of $734 million, or 19%, in just four years.
But another category grew even faster — the total pay for coaches in all sports rose 26% in the major conferences over the same period. And while more and more basketball coaches are landing huge deals, they still trail their football counterparts, 50 of whom made at least $2 million for the 2013 season, according to a database released by USA TODAY Sports in November.
Critics of the NCAA point to skyrocketing coaches’ salaries as evidence that college sports is primarily a business — for everyone except the players. Rules limiting the economic freedom of student-athletes are not tied to any educational mission, they say, nor do they provide any academic benefit to the schools.
NCAA officials “say that the NCAA, first and foremost, provides a world-class education for these athletes,” says Michael Hausfeld, the lead attorney in the O’Bannon case. “That would mean that the $11 billion is provided to the educational institutions to, in large part, increase the academic training and careers and success of these athletes, as well as other students. … That money is not being used to improve the academic standing of these athletes. It’s going for bigger stadiums, more high-paid coaches, better training facilities, more assistants.”
The NCAA said it has previously outlined its position on such issues and declined additional comment.
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Defenders of the current system note athletes receive valuable scholarships, plus money for room and board, and in some cases are awarded Pell Grants, federal funds for college based on need. In addition, athletes receive academic and social support and can access the NCAA’s Student Assistance Fund, which last year made $73.5 million available to cover a variety of costs of attending school, according to the NCAA.
In October 2011, Division I’s governing board voted to let athletes receive as much as $2,000 above the value of their scholarships, but so many schools opposed the measure that it was suspended two months later.
Purists who want to preserve the “amateur” character of college sports say the benefits student-athletes receive are worth hundreds of thousands of dollars, not to mention it saves athletes from having to repay student loans.
“When I was a player at Indiana, I was on a full-ride scholarship, just like these guys are on full-ride scholarship, and I was able to handle those four years pretty good,” Alford says. “When you get to go to an institution, when it’s like Indiana for me or like UCLA, you’re getting a full-ride scholarship and you’re getting your education. I never had a problem with that.”
Yet each year, universities acknowledge on an NCAA form that the scholarships don’t cover all the costs, which is a particular challenge for athletes who are not subsidized by their families. Kevin O’Neill, who coached at five schools during his 16-year career, said he saw it clearly when he was at Southern California from 2009 to 2013. The cost of living in Los Angeles was prohibitive for his players, he says.
“They couldn’t afford to do anything,” O’Neill says. “… I coached at five institutions, and I would dare say that half the kids at any one time didn’t have enough money to live a normal student life.”
Across town at UCLA, the basketball players attend fraternity parties or play video games as low-cost entertainment, according to interviews with the players. But when money inevitably runs low, Parker, a sophomore, says he calls his parents for help because NCAA rules limit his options.
“You have to do exactly what they say in order for us to touch the floor,” Parker says.
As with their players, college coaches must adhere to NCAA rules. But while those rules set limits on activities such as how a coach may recruit or the number of hours a team can practice — which have an impact on athletes’ academic lives — they cannot limit coaches economically. When it comes to student-athletes, however, the NCAA claims regulatory authority in both areas, even though requiring players to go unpaid to remain eligible boosts the NCAA’s business because it leaves more money for its members, which schools say they need to pay for sports that do not make money.
Carey says the arrangement allows the NCAA to “pretend like it’s not a profit-driven business when the reality is it’s as profit-driven as anything out there.”
U.S. District Judge Claudia Wilken will preside over the O’Bannon case set for trial June 9 in northern California. Wilken refused last October to dismiss the case, noting that a 1984 ruling by the Supreme Court that the NCAA has relied on may no longer apply because the plaintiffs “have plausibly alleged that the ‘business of college sports’ has changed dramatically over the three decades since …”
Contributing: Christopher Schnaars and Jodi Upton. Peter also reported from Las Vegas.