Big-Time Athletics at Duke: Discussion Points

0. Preamble (April, 2008, updated Dec, 2011)

With the exception of the adding of links to EADA reports, this page is no longer maintained. This is largely because of the lack of progress that I have made in 12 years of trying to shine a light on Duke Athletics and its finances.

The slides from my presentation to the Academic Council in November 2010 are available here.

This page is intended to be a tool for faculty who want to inform themselves about college athletics in general, and some aspects of Duke's athletics program. Although the material on this page is a little out of date, much of the information is relevant to the (hopefully ongoing) discussion of the Strategic plan for Athletics which was approved by Duke Trustees in May, 2008. I have also prepared a list of questions about the plan and an annotated version of the plan; comments will appear when you move your mouse point over passages highlighted in blue.)

This page was prepared by Richard Hain. The views expressed on this page are his own, and not official views of Duke University.

1. Introduction

The goal of this page is to catalyze an informed discussion of athletics at Duke. The relation between athletics and the educational mission of US universities has long been an issue.

An important distinction needs to be made between athletics as a participatory activity and big-time athletics, which is, for the majority, athletics as entertainment. The benefit for students lies mainly in the former.

2. How does athletics relate to the University's mission?

In the ideal, the mission of a university is the creation, preservation and dissemination of knowledge. In practical terms, this translates into research, scholarship and teaching.
Duke's recent decision to move up the building of the basketball training facility
is an example of how athletics challenges the University's educational priorities.

3. What are the financial implications of Duke's involvement in Big-Time athletics?

All universities with major athletics programs are required by the Equity in Athletics Disclosure Act (EADA) to file an annual report with the US Department of Education. These reports, which should be freely available to the public, contain information about athletic programs including information about expenditures and revenues. The most recent EADA reports for all US universities with athletics programs are available from the Equity in Athletics Disclosure website.

Duke's EADA Reports: 2014-15 2013-14 2012-13 2011-12 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 2000-01 1999-00 1998-99 1997-98 1996-97 1995-96. Prior reports: 1990-91 and 1991-92.

The following graph summarizes the expenditures and revenues of Duke's athletics operation collected from its EADA reports:
Revenue and Expenditures, Duke Athletics
Note: These figures are surely not 100% reliable. It is not clear whether they contain the cost of maintaining athletic facilities (such as Wallace Wade and Cameron) or utility costs associated to athletics. The University subvention to Athletics appears to be counted as revenue or somehow excluded from the figures. From the data, it appears that the reporting requirements became stricter with the 1997-98 report. Consequently, I consider data for 1995-1997 to be less reliable. My impression is that the revenue figures are more reliable than the expenditure figures. (Cf. figures for 2003-04.) The reduction in revenues from 2005-6 to 2006-7 is due (I am told) to the expansion of the ACC: TV revenues, which have not changed, are now shared among 12 schools as compared with 10 in prior years. In recent years, expenditures are not allowed to exceed revenues.

According to these figures, the average annual growth in athletics revenue from 1997 to 2005 is 8.8%; the average annual growth in expenditures is 9.5%. This is almost certainly much greater than the corresponding rates for Arts and Sciences, which I believe is no larger than 5% over that period.

The following graph (thanks to Fred Nijhout) gives another way to compare the growth of Athletics with that of Arts and Sciences. Since our figures for the Arts and Sciences budget are incomplete, we use Duke tuition as a proxy. (This is not unreasonable at 80% of the A&S budget comes from tuition.) This graph compares the growth of $1 of each unit's budget, corrected for inflation.


Growth of Athletics versus Tuition

The figures for Athletics are taken from Duke's EADA reports. The tuition figures were provided by the Provost's office. Salary increases for A&S are the annual percentage increases in the chairs' salary pool. The median salary increase in A&S is below this.

These figures suggest the following questions:

Congress is considering whether to tax income of operations of universities, such as big-time athletics, that generate significant revenue and that are not related to the mission of the institution. According to a Friday, March 10, 2006 article on the Chronicle of Education website:

A Congressional committee that oversees legislation affecting nonprofit organizations has opened an inquiry into a range of potential tax abuses in college sports [...]

Aides to the committee asked questions about whether certain revenue generated by college-sports programs and the National Collegiate Athletic Association should be treated as "unrelated business income" and taxed. According to the college officials interviewed by the committee's aides, lawmakers are concerned that big-time sports programs are evolving into commercial entertainment businesses that are only marginally connected to the tax-exempt purposes of higher education.

Committee aides also questioned the skyrocketing compensation of college coaches and other administrators in college sports, including athletics directors and top NCAA officials. And committee aides asked whether donors should be allowed to take any kind of tax deduction for making mandatory "contributions" to secure luxury-suite leases and seats to college-sports events.

Update: Congress has held more recent hearings on the subject. See, for example, the April 4, 2007 article in the Chronicle for Higher Education and links therein.

This raises the following question:

It is a common myth that college athletics programs run at a profit; very few do. (See, for example, the book by Shulman and Bowen. There are several more recent studies that confirm their findings. See links below.) Shulman and Bowen also found that  "at the most intensive level of play (NCAA Division IA), winning appears to have had, if anything, a modest negative effect on the overall amount of alumni/ae giving." (page 223). Other studies show that many alumni of top universities believe that big-time athletics should be scaled back.

4. What are the implications of big-time athletics on admissions and academics?

According to an article in the Chronicle in October, 2002, Athletics director Joe Alleva prepared a document entitled Rebuilding Duke Football, which " calls for more flexibility in player admissions, salary hikes for coaches, improved facilities and a stronger support staff."

6. How does big-time athletics affect the climate on Campus?

7. Further Information:

Books: An excellent and reliable source of information about college athletics in general (and Duke in particular) is the book The Game of Life by Shulman and Bowen.

Links: