Duke University's Athletics Department has written a strategic plan (pdf, html), which will be discussed at the May 7th meeting of the Academic Council. The goal of this page is to stimulate discussion of the proposed plan. This is my own personal analysis of the plan, not one of any official body at Duke.
In a nutshell, the plan is to invest in revenue sports. As the plan admits, this will not be cheap. The main financial component of the plan is to increase revenue by investing in football to use these increased revenues to subsidize non-revenue sports.
We conclude that over the medium term (eight years), increases in operating expenditures on football or men's basketball are not associated with any change, on average, in operating net revenue. (The empirical effects of collegiate athletics: an interim report, NCAA, 2003, p. 4; see also related article in USA Today)
Given the significant resources requested by the plan (e.g., continual improvement of facilities) and given the failure of recent large investments in football to yield results, there should be a thorough review of the plan in its penultimate year. This review should not only examine the effectiveness of the investment in football, but all aspects of the plan. The plan should be regarded as a 5-year plan, and be reviewed in the spring of its 4th year.
There are many positive aspects in the plan, such as investment in HPER. Major issues and areas of concern include:
According to Duke's 2006-07 EADA report, the football team's revenues and expenditures were $8.9M and $9.7M, respectively. (Back of envelope computations suggest that it is unlikely that the expenditure figures include the cost of maintaining facilities, such as the Yoh Building and Wallace Wade.) Last fall, Duke hired a new football coach, whose salary is $1.1M higher than his predecessor's.
"As revenues increase from football and increased giving, we will consider improvements in sports that do not now have their full complement of scholarships. Our goal should be to maximize the return on investment while recognizing that the means of doing so may vary from sport to sport." (p. 14)
" ... we should treat all moneys as investments and seek the highest rate of return on the dollars we invest. Such a return may be actual dollars, a better academic/athletic experience for student-athletes, the increased likelihood of championships, increased visibility for the university, ..." (p. 13)
Currently Duke football has a very high graduation rate. Will success in football result in lower graduation rates for the football team as it has in men's basketball? How will this affect the overall graduate rate of Duke's student athletes?
As the plan clearly states:
The current financial reality of the Duke Department of Athletics is quite simple. Our expenses exceed our income, and have for several years. To cover that difference we have consumed our reserves, which are now depleted. The university subsidy, which was designed to cover the difference between expenses and revenue by paying for a certain number of athletic scholarships per year, no longer fills that gap. As a result, the department will run a substantial deficit in FY2008, which needs to be covered from University funds. (p. 16)In addition to raising football revenues, fund raising and cost sharing (with the rest of the University) are the other major components of financial plan.
Within the proposed plan, athletics would become a university-wide institution and not an Arts and Sciences/Engineering activity with costs shared by the University as a whole." (p. 3)
"In order to increase the chances of winning championships we should invest first in those sports that can be moved to a championship level with relatively small increases in funding. In sports of this category that already have the maximum number of scholarships, we should seek to provide essential staff, improve basic facilities, and provide better pay for assistant coaches. As revenues increase from football and increased giving, we will consider improvements in sports that do not now have their full complement of scholarships. Our goal should be to maximize the return on investment while recognizing that the means of doing so may vary from sport to sport." (p. 14)
"Clearly, university support of the Department of Athletics has not taken into account the cost of the changing landscape of intercollegiate athletics. To continue to sponsor the broad-based, highly successful program that we currently enjoy, we need to provide an annual institutional subvention of approximately $X per year, or double the current number." (p. 16)
"Providing $X of central funding permanently is highly undesirable. The preferred solution is to fund all scholarships by endowment. At Duke, that would require an endowment of at least $X million. Such an endowment can only be raised if athletics is a major focus of the next capital campaign, and if the institution provides significant matching funds to motivate donors." (p. 17)
The facilities message is simple: more or less continuous improvement is central to the ability to attract the best coaches and athletes and thus to win. (p. 11)
The athletics bubble could burst In recent years, Congress (both Democratic and Republican controlled) have held hearings on the escalating size of college athletic programs and their lack of connection to colleges' primary educational mission. They have discussed taxing athletics programs and the NCAA, closing tax loopholes (such as those for season tickets and boxes), and taxing TV revenues. (NY Times editorial, George Will column, Chronicle of Higher Education: March, 2006, September, 2006, October, 2006, April, 2007, October, 2007)
The high time demands (practice and travel) on student-athletes affect their choices of courses and majors. (For example, it is very difficult to major in lab science and be a student-athlete.) The time demands also isolate student-athletes from many aspects of campus life.