left arrow road sign Bear Left!

Sis! Boom! Bah!
Tim Francis-Wright

Among the sundry pleasures of November are the reminders of my halcyon college days. The storied college rivalries are everywhere on television. The fresh-faced undergraduates are on the phones calling alumni for contributions to the alumni fund.

I am glad that Yale, my alma mater, has a sizeable endowment. Income from the endowment allows Yale to offer scholarships to a large percentage of each freshman class. The endowment provides income for it to hire the best and brightest researchers. The endowment helps keep its facilities in top shape. But endowments also means that rich universities like Yale can spend money on more frivolous things, like multi-million dollar boathouses for the crew team; and for necessary facilities like a third building for the chemistry department.

Most private American colleges and universities are exempt from taxation on virtually all of their activities. The Internal Revenue Code specifically exempts educational institutions from requirements that force most foundations to spend substantial amounts of their endowments. Colleges and universities enjoy more freedom to allow their investments to grow because Congress wanted educational institutions to have long lifetimes and recognized that substantial endowments were vital to those lifetimes. The net worth of the richest American universities is now so huge that their leaders are in danger of running their schools for the benefit of their endowments instead of using their endowments to benefit the schools.

The endowment at Harvard University fell from $19.2 billion to a paltry $18.3 billion in the year ending 30 June 2001. Poor sister Yale University saw its endowment rise in that period from $10.0 billion to $10.7 billion. This listing of the top 50 endowments as of 30 June 2000 shows that six colleges and universities had endowments of over $5 billion and fully 47 had endowments of over $1 billion.

A truer sense of the net worth of an educational institution is its endowment per student. According to a Cornell University study, at Princeton, Harvard, and Yale, the endowment per student at the end of the 1999-2000 academic year was over $900,000. There certainly is nothing wrong with using a large endowment to subsidize the high cost of a truly great education. For example, at Cooper Union in New York, budding artists, engineers, and architects pay no tuition (but do pay room and board) because of the endowment set up by Peter Cooper in the 1850s.

At Harvard, Yale and Princeton, however, annual giving is so large each year that the institutions literally do not have anything to spend it on. According to the Cornell study, 48.9% of the donations from the annual funds at these institutions do not go to current needs, but go into the endowments instead. So, I found that I had to demur when the traditional call came from New Haven this year asking or a donation. I could not suppress the thought that somewhere there was a charity without an 11-figure endowment that would put my paltry $100 or so to better use.

November also brings the end of the football season for most teams, usually capped by a game with a storied history behind it. On 17 November, for example, Harvard will play at Yale. Alabama will play at Auburn. And Syracuse will travel to Florida to play Miami in a game fraught with tradition born out of a television contract. Television has taken such a stranglehold of the revenue sports, football and men's basketball, that the colleges and universities may never get them back.

On most weeks this season, in addition to the traditional games on Saturday afternoons, college football fans could enjoy football games on Tuesday nights, Thursday nights, Friday nights, and Saturday nights. The NCAA, in allowing these sorts of games, borrowed successful plays from its sponsorship of college basketball. Men's basketball games during basketball season are usually not only on Saturday and Sunday, but often on Monday, or Tuesday, or Wednesday, or Thursday. ESPN cable contracts mandate that many Western conferences must start basketball games at 9:00 Pacific time or 10:00 Mountain time, so that games could be shown live on the east coast at midnight.

This sort of scheduling mocks the presumption that the participants are scholars of any sort. It is reprehensible enough that college Presidents allow the 15 members of a basketball team to waste much of the basketball season en route to games hundreds and thousands of miles away from campus. What is the reason for scheduling the football team, with its complement of 95 to 160 players, in games in the middle of a week of classes? There is no answer that is compatible with the goals of a legitimate educational institution. The visiting team will spend most of the day traveling to and preparing for the game. A night game means that the visiting team will be lucky not to miss classes the next morning.

To make matters worse, many college football programs qualify for bowl games. CNNSI reports that Division 1A football will have no less than 25 bowl games in December and January. Most will have a sponsor that pays hundreds of thousands to millions of dollars for its corporate name in the name of the bowl game, and its logos on the field and the uniforms of the players. Teams do not have to be particularly good to go to these events: 50 out of the 117 Division 1-A football programs will play in a bowl game this season.

Basketball is the other cash cow for Division I schools. CBS will pay the NCAA $360 million to broadcast the 2003 Division 1 tournament, and will pay increasing amounts in succeeding years, to $764 million in 2013. By contrast, ESPN committed to a $200 million contract for eight years of broadcasts of not only the Division 1 women's basketball championships but also 20 other events.

What the NCAA seems powerless to admit is that the sports that provide the majority of its revenues, football and men's basketball, are essentially minor leagues for the NFL and the NBA. The age of the players and the quality of play make them analogous to the top tier of baseball's minor leagues. What sets these games apart is gambling. There is no market for gambling on the professional minor leagues. The fan base for those teams consists of the devoted fans in the cities in which they play. Minor league teams do not get national television or radio coverage.

However, almost every sports page in the country lists the point spreads for "major college" football and basketball games, not as aids to neophyte fans, but as aids to the gamblers among their readership. Without gambling, the basketball championships are interesting March diversions, not a "March Madness" worthy of a multibillion dollar television contract. The NCAA must know that acting to discourage gambling on its revenue sports would eliminate much of the revenue.

To be fair, the NCAA has rid college sports of some of its worst aspects. No longer can colleges operate athletic dorms, where athletes might never have to mingle with anyone not on the football or basketball teams. Athletes can only take one meal per day separate from the other students. And athletes must meet certain academic standards to be eligible to play.

But sports remain a big money business for Americans colleges and universities. The 970 member schools of the NCAA, according to CNNSI, take in $3 billion annually from sports, but spend $4.1 billion on sports. It is hard to decide which schools are more exploitative. Are they the 48 Division 1-A schools that made average profits of $3.8 million on the backs of their athletes? Or the 66 Division 1- A schools that lost money on their athletic programs and relied on the rest of the student body to subsidize them?

Bear Left!: links library | archives | privacy statement | about us
mailing list | home (with this week's columns and links)

© 2001 Bear Left!