UK's culture of athletics will greet new president

over $1 millionof an $80 million annual budget goes to academics

lblackford@herald-leader.comMarch 20, 2011 

  • When the University of Kentucky hires its 12th president this spring, he or she will face unprecedented challenges. UK could be propelled into the nation's top ranks or mired in a cycle of big dreams and little money.

    This is the fourth story in a series examining some of the biggest issues the new president will face, and how the university's dismal finances may affect its top priorities.

In May 2009, University of Kentucky Athletics Director Mitch Barnhart announced the athletics department would increase its annual donation to academics to $1.7 million. "We want to continue to be good partners to the university," Barnhart said at the time. "There's a need on our campus."

UK President Lee T. Todd Jr. continues to highlight that donation as one way he's tried to better integrate the independent, self-supporting UK Athletics Association with the academic side of campus.

But that annual gift has barely increased in 23 years, since President David Roselle exacted the first regular donation of $1.5 million in 1988.

At the time, the total UK athletics budget was a mere $13.7 million, so the donation was 11 percent of the budget. Today, the athletics budget has ballooned to nearly $80 million, an increase of 478 percent. The donation is 2 percent of that budget.

This year, UK athletics will also give another $500,000 to academic advertising and other programs, such as UK Opera. But even counting that, it still doesn't look particularly generous when compared with some of its rivals in the Southeastern Conference.

Of the five SEC schools with self-supporting athletics departments that responded to Herald-Leader queries, the University of Florida gives 6.5 percent to purely academic pursuits, such as scholarships, the University of Tennessee at Knoxville gives 5.2 percent, Louisiana State University gives 3.8 percent, while the University of South Carolina's rate is lower than UK's, at 1.9 percent.

"All in all, they've done very little through the years for the academic side of the institution," says law professor Robert Lawson, who served on the UK athletics Board of Directors for 30 years and represented UK in front of the NCAA on numerous occasions.

Barnhart says athletics always want to do more, but the program's financial self-sufficiency helps the university the most. UK is one of only 14 programs in the country that doesn't receive state or federal funding.

"One of the most important things we can do as an athletics program is not be a drain on the budget of the institution," he wrote in a statement. "Remaining self-sufficient ... has, in part, fueled the increase in our budget over time.

"Yes, it is important that we give back to the university. It's the reason we're here ... At the same time, we fund all of our own scholarships as well to the tune of nearly $10 million annually. And when tuition goes up ... we pay the full freight." (Read Barnhart's full response at Kentucky.com.)

In addition, Barnhart pointed out, UK athletics receive a relatively low amount from student fees, about $750,000, which mostly offsets student ticket prices. In comparison, for example, Auburn University athletics receive $5.2 million in student fees.

Barnhart calls athletics the "front porch" of UK, where many people first interact with the school. "So we are critical not only in what we give back financially, but in how we help build the brand of the university."

But some faculty and staff, who haven't gotten a raise in three years and are facing even tighter budgets ahead, think UK athletics should do more for the university that provides its very existence.

In addition, the financial strength and independence of UK athletics raise questions about UK's priorities. Now, as Todd prepares to retire and UK searches for a new president, the candidates should be prepared to answer the question of how they will walk a very thin and very blue line: How do you balance the tensions between the benefits of UK's college sports program against the school's pressing need to improve academics?

"It seems to matter whether we win in athletics," said faculty trustee and finance professor Joe Peek. "I'm not sure it matters nearly so much if we win in academics. The reality is we're not winning in academics, and why is that acceptable?"

Ebb and flow

UK President David Roselle was largely seen as anti-sports compared to his predecessor, Otis Singletary, and some think his departure in 1989 was related to political pressure over an NCAA investigation into widespread recruiting violations that also felled basketball coach Eddie Sutton.

But in setting up the athletics donation in 1988, he began a tradition that made UK athletics a partner to its academic counterpart across Euclid Avenue.

The money has ebbed and flowed with the fortunes of UK athletics. The highest budget percentage occurred in 1994 when athletics gave $1.4 million to the general fund and another $1 million to the UK library, 12 percent of a nearly $20 million budget.

The donations stopped in 1997 when athletics started paying the debt service on the construction of W.T. Young Library.

Because the legislature had not approved bonding for the building, President Charles Wethington worked out a complicated financing arrangement whereby the city issued the bonds, and UK athletics paid the $3 million annual debt service as a private agency. UK's general fund then reimbursed athletics for those payments.

In 2003, two years after he arrived at UK, Todd announced a $1 million payment from athletics for academic scholarships, in addition to paying the university for administrative overhead.

Of course, like most Division I sports programs, UK's has also grown in size, stature and media deals. In 1988, Sutton's total salary and benefits package was $350,000. Today, Coach John Calipari makes $3.7 million, an increase of 957 percent.

In that same time, faculty salaries have risen about 105 percent.

'An economic engine'

With college sports seemingly only a step below the pros in television contracts and salaries, the mixture of athletics and academics has become increasingly uneasy on Division I campuses. That's particularly true at UK.

UK's sports program reaches every corner of the state — from the General Assembly to fans who never attended the school — creating political and emotional pressure to win. There's no pro team to distract fans from the fortunes of the Wildcats, particularly the winningest basketball program in college hoops history.

UK's success in selling basketball and football tickets, and its strong donor base has created its financial autonomy. It pays for all of its athletic scholarships ($9.8 million), pays for utilities, maintenance, parking and security for athletics facilities ($7.35 million) and pays for administrative overhead, such as accounting services ($1.8 million). UK athletics also bring recognition, boosts local restaurants, hotels and other businesses and helps attract students, officials said.

"It (UK sports) is an economic engine," said Daniel Fulks, an accounting professor at Transylvania University who researches the finances of college athletics for the NCAA. "There are intangibles, such as what does UK basketball mean to the people of the Commonwealth and the university community?"

Darby Turner, a member of the UK athletics board of directors said another intangible benefit is what athletics does to keep alumni plugged into the school.

"It's actually important to the faculty, indirectly, that these programs be top notch and raise alumni awareness and, in turn, raise funds," Turner said. "To some degree that's true for the legislature. They love UK sports, too, and that keeps UK in front of the General Assembly. It's all part of the engine that drives revenues to pay faculty and build buildings."

Barnhart says many students who "bleed blue," come to UK because of athletics. "But they stay at UK — and they graduate — because of what happens to them academically and socially once they come here," he said.

UK athletics also aid UK's overall fund-raising efforts, said Chief Development Officer Michael Richey.

"I don't see athletics as competition as much as other people would," Richey said. Fund-raising officials from UK athletics work with the main fund-raising office. Richey said athletics can attract donors who may not have even graduated from UK, who then might want to give to the academic side as well.

Revenues from donors ($15 million) are a key part of the UK athletics budget, along with revenues from football ($29 million), basketball ($16 million) or corporate, multimedia rights ($12 million).

Hidden costs

But whatever UK athletics' success as an economic engine, an issue to many on the academic side is the sense that athletics are more important to the institution than higher learning. With budget cuts, the student-teacher ratio has increased, and UK is still struggling to meet its state-mandated goal of reaching the Top 20 rank for public research universities. Although they understand UK athletics have a separate budget, many faculty and staff members said it can be hard to reconcile millions of dollars spent on sports rather than academics.

Consider UK's Twitter page, one of the first portals to the institution. "The official Twitter page of the University of Kentucky," it reads. "Home of powerhouse basketball, the best of NCAA athletics and 70+ nationally ranked academic programs."

Todd appears resigned to the dominance of college sports, which he calls part of a national obsession with sports in general.

"I'm not saying it's right," he said in a recent interview. "I wish we were fanatics about academics."

Todd has also tried to create more of an appreciation for academics for Kentucky's boosters, frequently showcasing academic stars during the halftime at basketball games in his decade at the school.

But that hasn't always made an impression on campus.

"The concern is the perception that Dr. Todd's focus has been on athletics and the medical center and the regular campus in between them hasn't gotten much," said William Maloney, a civil engineering professor. "Joe Peek calls it the valley of the shadow of death. I call it Death Valley, a desert that lies between a jock oasis on one end and a doc oasis on the other."

Strong silos

John Thelin, a UK education professor who also specializes in college sports, said Todd promised to integrate athletics and academics, but "it would seem the silos are pretty strong and pretty high," he said. "Any major state university will face these things, but do you continue the culture or is it worth trying to modify?"

Maloney earned his doctorate at the University of Michigan, one of UK's benchmark schools. "They have a big athletic program, but it doesn't dominate the thinking of the university," Maloney said.

Along with intangible benefits, athletics also have intangible costs.

"An example of a hidden cost," Fulks said, "would be the time presidents spend on athletics, which is not tracked."

Take Todd. Since his hiring, UK has had one of its longest stretches without an NCAA investigation. But with UK sports, calm is a relative term. In just the past four years, Todd has had to manage uproars over basketball coach Tubby Smith's departure, the hiring, firing and $3 million settlement for the next basketball coach, Billy Gillispie, and the hiring of John Calipari, which was shortly followed by news that his most recent Final Four appearance had to be vacated. Calipari was not sanctioned in the Memphis matter.

Then there was the controversy over coal magnate Joe Craft's organized donation of $7 million for the new Wildcat "Coal" Lodge, which led one of Kentucky's most famous authors, Wendell Berry, to withdraw his papers from UK.

Most recently, Todd gave Barnhart a $125,000 raise on his annual base pay and extended his contract until 2019, which put Todd at odds with his own Board of Trustees in the last few months of his tenure.

Another intangible: UK athletics recently broke ground for the new Wildcat Coal Lodge, but it did not pay for that land, nor did it pay for the loss of 141 coveted parking spaces behind Memorial Coliseum to make room for the new building. It's fair to say that land would be worth more than $1.7 million.

In that case, UK athletics are part of the university.

Or as Peek says: "We're still providing things that aren't fully priced."

Bringing balance?

The NCAA and the Knight Commission on Intercollegiate Athletics are trying to bring balance to Division I sports. They recommend increases in athletics budgets stay in line with increases in academic budgets.

That has not happened at UK. Since 2001, the athletics budget has risen 110 percent, while the university's budget, not including athletics or the medical center, has risen 77 percent. (Tuition has gone up 190 percent.) If you go back to Roselle's era, the difference is more dramatic: The UK athletics budget has risen 478 percent, compared with UK's overall budget, this time including sports and the hospital, which went up 348 percent.

Faculty pay, student quality and other measures of success, such as research grants, have improved at UK in the past 10 years, but that progress may be at a standstill as state funding dries up.

But funding won't dry up for UK athletics, which has seen its donation base double since 2004, from $7 million to $15 million.

UK's Lawson sees the escalation of college sports everywhere as detrimental — especially for the athletes, whose academic careers he believes are mostly written off. He also thinks UK athletics money ought to be considered part of the university's budget.

"I've always believed that only the presidents can do something about this, and they have to work together through the NCAA. But a big problem is that money is driving everything. That's why they have 40 basketball games instead of 20."

He discounts the argument about market forces.

"The ADs (athletic directors) and coaches have set the market, and the market's phony," he said. "I don't believe the only way you can get a good coach is to pay him $4 to $5 million a year. At the same time, you're paying an education professor $50,000 a year."

But the precedents and priorities may be set in a state that bleeds so blue.

"The next president of UK has a tough tightrope to walk," said UK's Maloney. "The state has high expectations for athletics, and the state has never really had real expectations for academic success."

Reach Linda Blackford at (859) 231-1359.

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