The end of pretense

Back then, we used to walk through the back door with the cash.
Now we just got to walk through the front door with the cash.
–Ed Orgeron, former LSU football coach

by Art Padilla,

A top college quarterback, in his sixth year of football, was asked at a press conference about attending class.

He grinned broadly and replied, “No class. I graduated two years ago.”

College athletics have had tenuous relations with academics. What is unprecedented is not that heavily recruited athletes circumvent classes or that commercialism has mushroomed. Rather, it’s that the economic motive of big-time college sports is fully exposed while institutional oversight has disappeared.

It still looks familiar. Teams wear traditional uniforms with shoe-company logos on them. Pep bands play fight songs. Fans in school colors fill arenas. Boosters brag they’re close pals of the coach.

Beyond the pageantry, all pretense has ended. Listen to former LSU coach Ed Orgeron:

“Back then, we used to walk through the back door with the cash. Now we just got to walk through the front door with the cash.”

College sports are buried under a tsunami of unprincipled choices made over a long period by coaches, ADs, and athletic conference commissioners. Can anyone justify the impossible geography of the so-called Atlantic Coast Conference, for example?  The Luke Ferrelli saga, where a top football player bounces from Cal-Berkeley to Clemson and then to Ole Miss, highlights another indefensible trend.  

University presidents and boards remain on the sidelines while it implodes.

Sports gambling

When you thought it couldn’t get worse, major risks have emerged as sports gambling surges dramatically. Danny Funt’s new book, Everybody Loses: The Tumultuous Rise of American Sports Gambling, documents how gambling creates incentives for corruption difficult to detect and prevent.

His discussion of gambling’s addictive sway over young people is sobering.

Prop or side betting (e.g., how many free throws a team will miss) is pernicious. Rigging part of a game without necessarily affecting the overall outcome—spot fixing—usually involves relatively few players, especially in basketball, so it isn’t impossible to orchestrate. It’s already caused multiple scandals.    

Inexplicably, the NC legislature annually allocates UNC system athletic departments millions of tax dollars generated by legalized sports betting, ostensibly for “regional development.”

University boards should insist those copious funds be spent to protect athletes and students, to treat gambling as a student safety issue, rather than spending those tax dollars on administrator salaries, new field turf, or bleacher seats.

Education and monitoring for athletes vulnerable to gambling pressures, especially those without lucrative NIL deals, should be mandatory.

What’s your athletic department worth?

Entrepreneurial investors have shown interest in the revenue streams of athletic programs. Last month, in a $500 million deal, the University of Utah engaged a venture capital firm, New York’s Otro Capital, to manage its athletic fortunes. Other athletic programs will follow.

Valuations of sports programs—derived from revenues, brand strengths, alumni bases, and media contracts—are now commonplace. They’re broadly suggestive of what venture capitalists might pay for a piece of the profits. One study reported in the Wall Street Journal ranks NC State as having the 38^th most “valuable” athletic program; UNC ranks 41^st and Duke is 51^st.

A needed uncoupling

Ironically, with appropriate safeguards and supervision, venture capital may provide a solution to today’s unmanageable mess by facilitating a needed uncoupling between big-time sports and the rest of the university.

Privatization isn’t elegant, a sort of let’s-legalize-drugs-because-we-can’t-control-them. But suing your 20-year-old quarterback because he wants to transfer yet again, as Duke University did, isn’t elegant, either. 

Contrary to widespread belief, athletic income doesn’t spill over to the rest of the university.  Most revenues come from, and stay within, the football and men’s basketball programs. But despite significant growth in revenues, most big-time athletic programs still experience deficits. In fact, universities subsidize them heavily.

Why continue to embed flagrantly professional sports within universities? Why not create franchises in football and men’s basketball that allow franchisees—for a fee that would help fund non-revenue sports—to use the university name, lease facilities, operate transparently, and compensate athletes? Universities could set aside funds to support athletes who wanted to be students.

If this could be done for university health systems across the nation, like UNC Health or Duke Health, which grew to multi-hospital, independent regional organizations out of their original medical schools, it could be done for big-time athletic programs.

Kicking the ball down the road

The question is no longer whether college sports can be “fixed.” That bell has rung.

If boards and presidents keep kicking the ball down the road, ignoring massive challenges facing them, instead of recognizing big-time sports for what they are—financially profligate, dependent on increasingly undependable media revenues, reputationally risky, ethically compromised—they will continue to fumble their fiduciary obligation.

Governance needs to catch up.

Dr. Art Padilla splits his time between his homes in Wrightsville Beach and Raleigh. He served as a senior administrator at the University of North Carolina headquarters and later at NC State, where he was chairman of the Department of Management. He has taught at UNC-Chapel Hill, NC State, and University of Arizona, winning several teaching awards and recognitions, including the Holladay Medal, the highest faculty honor at NC State. He recently completed the 2nd edition of his book Leadership: Leaders, Followers, Environments and is at work on his first novel for Penguin.