In their March 27 op-ed, a trio of University of Kentucky administrators invoked “economics” to make the case that the UK athletics program, perhaps the most dominant force on campus, should be excused from its free-spending ways because it spends only the dollars it brings in. The fact that the program “foots its own bill,” “pays the full cost,” is “fully self-sufficient,” is thought adequate to explain the enormous growth in athletic spending because state dollars are not at stake.
These arguments are not new. UK athletics has touted their self-sufficiency for years. The problem is that these points are rooted in a limited view of economics that misses important points about the ownership of UK athletics and its role in promoting the mission of UK.
The authors frame the issue as a competition between UK coaches and faculty. It is undeniable that salary increases for coaches have far outstripped those of faculty. But that fact is an inevitable one, driven by the distinct markets for the talents offered by the two. Thus, little is to be learned from bickering over salary increases.
Consider, however, a broader question: the appropriate stewardship of university property for the benefit of all UK stakeholders. This question, unlike the narrow question of whether coaches should make more than professors, raises much more challenging questions regarding athletic spending.
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It is beyond dispute that public universities across Kentucky and the nation have faced conditions of scarcity in their academic programs. State and federal budget cuts and increasing costs have resulted in an upward spiral in tuition that threatens to break the backs of students and their parents, and in cuts to programs that benefit not only students but all of the commonwealth’s citizens.
In such an environment, it is not enough to expect that nonacademic programs, like UK athletics, will not drain money from other university endeavors. Proper stewardship requires that those programs maximize their revenue and — just as importantly –— minimize their cost so that all of the facets of the university can thrive.
If UK were operating in the business world, it would never tolerate one of its divisions spending all of the revenue it generates on the theory that all of that revenue somehow “belongs” to the division. It would instead force each of its divisions to maximize the net profits that each division contributes to the overall institution. And, while most of UK is not operating in the business world, its athletics program clearly is a business — and a large one at that. If we are going to invoke economics, we should distinguish the business from the non-business components of the university and apply real economic principles to the former.
Another common argument is that UK athletics is separate from the university itself, and therefore, athletics is under no obligation to contribute to the other aspects of the university. This argument ignores the fact that UK athletics could not survive without the sponsorship and trademarks of the university. Again, considering this issue through an economic lens, UK and UK athletics would act as two separate corporate entities do when encountering such a problem — negotiate a licensing agreement under which the profits of the joint venture are shared.
Nothing here requires us to diminish the justifiable pride we take in our students’ athletic success. Those successes are substantial and important to the community. Nor should anything here be taken as a call for draconian reductions in athletic expenditures –— it takes a lot to field winning teams and the financial and other benefits of athletics will come at a cost. Finally, nothing here should take away from the contributions that UK athletics does make to the university — we should all recognize, as the authors of the op-ed emphasized, the role UK athletics has had in the building of the Jacobs Science Building.
I agree with our UK administrators that the focus on relative salaries of coaches and faculty obscures the important issues surrounding university athletics. The broader point they have missed, however, is that proper stewardship of UK athletics requires more than pointing to the lack of a burden on our academic budgets and occasional “contributions” of university-owned profits back to the academic side.
UK athletics is a valuable asset of the university and our expectations of it speak volumes about what we think is important. Proper stewardship under an economic model thus requires that UK athletics not only win, but also that it maximize its profits while winning.
Christopher Frost is the Thomas P. Lewis Professor of Law at the University of Kentucky College of Law.
At issue: March 27 commentary by Tim Tracy, Mark Kornbluh and Mark Meier, “UK Athletics pays its own way, helps academic mission”