Sunday, April 24, 2011

There's A New Book On The Economics Of College Sports

It is called Big-Time Sports in American Universities, by Charles T. Clotfelter. It was just reviewed in The Wall Street Journal. See Calculating the Score.

Here are some excerpts from that review:

"Pity the poor presidents of colleges with major athletic programs. Football coaches are not just better known than the administrators, the coaches also tend to make a lot more money. And professors lag even further behind. In 1986, the presidents at 44 public universities with teams in the five most established athletic conferences actually made, on average, a little more than their coaches: $294,000 for the presidents, $273,000 for the coaches; full professors earned about $107,000. By 2010, the professors' income, adjusted for inflation, had climbed 32%. University presidents' pay had gone up 90%. The football coaches' pay jumped to more than $2 million—it had "increased by an astounding seven and a half times," Charles T. Clotfelter writes in "Big-Time Sports in American Universities.""

"The book's central theme is that the time has come to end the strange dichotomy on college campuses, where athletic and educational departments exist in parallel universes and regard each other warily. University leaders "typically ignore" athletics "when putting together a formal statement listing their institution's essential functions and objectives."

The unwillingness to acknowledge the centrality of major sports on many campuses makes no sense. Football and basketball teams are, for starters, a huge physical presence, with their gigantic stadiums (Bryant-Denny Stadium at Alabama seats 102,000) and large arenas (the Dean Dome at the University of North Carolina holds nearly 22,000). "Whether or not universities like to admit it," Mr. Clotfelter says, "big-time athletics must be counted as one of their significant activities.""

"And one of their significant economic centers. The author notes that critics complain "how few big-time programs break even or make a profit." Sounds scandalous, right? Despite millions that pour in from TV contracts, merchandise and ticket sales, and other sources, athletic departments barely make ends meet. But as Mr. Clotfelter observes, "arbitrary administrative decisions"—like billing the athletic department for students' phys-ed classes—muddle any net-profit analysis. And there's no way to measure the role that a high-profile team might play in attracting better students and alumni donations."

"At 58 universities with major athletic programs in 2010, 72% of students graduated, but only 56% of football players and 42% of basketball players received a diploma."

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