PLEASE NOTE: This is a minimally-edited transcript that originates from a program that uses AI.
Unidentified Speaker: really appreciate the kind words and um, in the immortal words of Yogi Berra, the future ain't what it used to be.
Anisa Khalifa: Last December, the athletics director at the University of North Carolina Chapel Hill sat in front of a group of reporters to announce some big news. And it all had to do with the guy sitting right next to him.
Unidentified Speaker: Please welcome the new head football coach at the University of North Carolina, coach Bill Belichick.
Anisa Khalifa: The university made headlines when they hired legendary NFL Coach Bill Belichick to lead the Tar Heels football team. The decision instantly put a massive spotlight on the program, partly because of Belichick's previous success on the field and the hope he could bring some of that to UNC.
But there was also the price tag of it all.
Unidentified Speaker: Okay, so moments ago we got our hands on Coach Belichick's contract. This is what everybody wants to know, $50 million over five years, and money made in the first three years is guaranteed. He's also eligible for up to three
Matt Hartman: UNC in particular has now made a massive bet on one of the most famous people in football.
Anisa Khalifa: It remains to be seen how that big bet is going to play out. The football season just kicked off and the tar heels, they lost their opening game 48 to 14. But putting the scoreboard aside, why is UNC going all in on a celebrity football coach?
Scott Dochterman: You cannot fail at football. Football is the primary driver in athletics, so you have to be successful at football, so you put every available resource into the cash cow.
Anisa Khalifa: I am Anisa Khalifa. This is the broad side where we tell stories from our home at the crossroads of the South this week, how college athletics became a money sucking machine and what it means for the rest of higher education.
So to start out with, can you fill in the blank in the sentence? The business of college sports is blank.
Scott Dochterman: It's more difficult and more important than it ever has been in the history of college athletics.
Anisa Khalifa: Scott Doctorman is the National College Football Reporter for the Athletic. He's been covering college sports for 20 years, and over that time he's noticed some big changes across the playing field.
Scott Dochterman: When you look at the way college athletics has changed in the last quarter century, it's gone from what I would consider kind of a mom and pop operation, where the conferences mostly facilitated scheduling and rules to now generating revenue as their primary function.
Anisa Khalifa: Making money has taken center stage in college sports.
But in the midst of that, Scott noticed something else that didn't quite add up,
Scott Dochterman: which is why do the college athletic departments continuously spend basically every money they get, and why are they always crying poor?
Anisa Khalifa: So he dug into the budgets from 16 different schools, athletic programs. Each of the schools came from what's known as a Power four conference.
Those are the conferences that carry the most clout in college sports. In other words, the ones that have the most money. Scott reviewed how much these schools spent and how much money they brought in over the last 20 years, and what he found is
Scott Dochterman: it's never enough. You always want more, and whether you feel like you're comfortable, then you're uncomfortable because you're comfortable in college athletics.
Anisa Khalifa: Scott says this push to want more and more is driven in large part by a fear of being left behind.
Scott Dochterman: There's an absolute level of paranoia at every institution with their rival, and when their rival is, is winning, they hear it from their donors, their fans, internally as to what do we need to do to be at their level to beat them.
And so they figure they need to, to acquire more talent in the coaching. Profession and spend to make sure that they're on a comparable level, and then they fear that if somebody leaves that they're afraid that their coach is going to go to a different place.
Anisa Khalifa: To that point, there's a quote at the top of your story that I think really embodies this paranoia will a little more than 20 years ago, the University of Iowa became worried that their very successful football coach might leave.
Scott Dochterman: Yes. In the early two thousands. They became part of what the University of Iowa athletic director referred to as getting into the arms race. And he weighed all the options at that point in the 2004, 2005 era. And his quote right from the beginning was, I don't know that a football coach would be making five times what a university president makes, but the only thing worse than being in the arms race is not being in the arms race.
And therefore, Iowa decided to pay. And, and that was the risk that they wanted to take to ensure that they kept a good coach. And that kind of kicked off to me the, the arms race era in college athletics.
Anisa Khalifa: This arms race has ballooned into some big numbers. Nowadays, in most states, the highest paid state employee is a head coach of a football team.
Scott Dochterman: We know what it was like 20 years ago where I think, uh, you know, there's a coach or two that they got in the arms race at three half million dollars a year, and that seemed astronomical. And now that would be economical in today's period.
Anisa Khalifa: And it's not just coaches' salaries spending is up everywhere from facilities to travel.
On average, the athletic department, Scott, reviewed more than doubled their expenses in the last 20 years, but at the same time, their revenue has actually kept pace with that rate. Or exceeded it.
Scott Dochterman: So it's basically one for one in the amount of money that's, that's generated and spent in college athletics.
And it's open to interpretation whether that's a good thing or a bad thing for, for amateur sports. Uh, but regardless of your opinions, this is what is happening.
Anisa Khalifa: And is this like across all college sports or are there particular sports that are kind of sucking up all the oxygen here?
Scott Dochterman: Football is the primary driver in athletics and, and men's basketball is number two, but specifically to football, it generates.
On most campuses for most athletic departments at, at a minimum, 75% of the revenue, if not close to 90 at some places. Wow. So there is a focus on ensuring you cannot fail at football. I mean, when you have some places a hundred thousand seat stadiums, the media rights revenues are 90%. Football driven, if not more at most universities and most conferences.
So you have to be successful at football, so you put every available resource into the cash cow.
Anisa Khalifa: One of the schools in Scotts breakdown was UNC Chapel Hill. Over the last two decades, their athletic department has seen total expenses jump more than 150%. And coaching salaries, a 350% increase, and that's all before Belichick came into the picture. And just a quick note here, WUNC, which produces a broadside, is an associated entity of UNC Chapel Hill.
We maintain editorial independence in all news coverage.
Scott Dochterman: So the higher Bill Belichick, it serves multiple purposes and I think this could really, I'll be anxious to see what the numbers are like when the next couple of years reports comes out because he builds interest immediately. He has a proven pedigree of success, as if not the greatest pro football coach in NFL history.
He certainly, um, at the very top, he's on the Mount Rushmore.
Anisa Khalifa: Right. Even I've heard of him.
Scott Dochterman: Right. Um, I think it's a move though that if it pays off. It's like buying a lottery ticket, um, for North Carolina athletics and North Carolina football, but I think the odds are not like winning the lottery. Right.
It's like winning a scratch off ticket.
Anisa Khalifa: Right. Well, it's a very expensive lottery ticket.
Scott Dochterman: Yeah.
Anisa Khalifa: But Scott says there's one more major thing influencing the decision making of university athletic programs like UNCA recent bombshell settlement with the NCAA
Unidentified Speaker: and a federal judge approving terms of a huge $2.8 billion antitrust settlement that will change the way college sports have been run for more than a hundred years.
Here's the snapshot,
Scott Dochterman: they can spend up to $20.5 million paying student athletes. Through the university, which of course was a major violation up until July 1st. So that is a major expenditure That's now going into it.
Unidentified Speaker: The 119 year amateurism model in the NCAA is dead. It's over everything. They based everything on the last.
120 years is, is gone. Players will now start being paid based off of the revenue from their schools starting July 1st. Those power conference schools are gonna start sharing that
Anisa Khalifa: revenue. We've talked about all of these different pieces of the business, but what makes the business of college sports unique from other types of businesses?
Scott Dochterman: We're talking about a mix between. Capitalism and socialism, if you will. And, and it is a really fascinating dynamic if you want to get into the politics of this, that these universities receive donations from some of the wealthiest individuals in the country and certainly in their state and community.
However, um, there are constraints. They are not owned by anybody as, again, they are a state agency. They're not at for-profit organizations, so they do spend this money. So to have this one side driving to generate as much revenue as possible, but to not have a board of directors or not have somebody earning shares of revenue are off of what's what's happening really.
It makes it unique, it makes it different in society.
Anisa Khalifa: Right. I mean, do you see any end in sight for this excessive spending, or is there anything that needs to change for the spending to slow down?
Scott Dochterman: Uh, no, there's, it's never gonna change as long as the only way is to put some sort of level of constraints on the entire business.
Um, and that'll never go over. Uh, there are aspects that could enter this discussion and really cloud it up, which is. Each of the four major conferences has explored investments from private equity firms and investment firms. And, and so that's gonna be the next phase that we're looking at when it comes to, uh, athletics and revenue generation is, you know, investments through private equity and how much that they are gonna be beholden to those companies, you know, rather than dispersing it to its membership.
Anisa Khalifa: Outside of the other sports programs at these schools, I mean, these are eye watering amounts of money, right? What is the cost to the rest of the university?
Scott Dochterman: That's a great question because it's kind of a symbiotic relationship in some ways because college athletics is referred to as the front porch of a university.
That's how you get a hundred thousand people on your campus is to go to a football game or 20,000 people to a men's or women's basketball game, and they see the university, they spend money on the university. You see when schools win championships or have postseason success that you see an uptick in in missions to the universities.
So. They are a great benefit to every single school in this way, and I don't think it's negative. I think the only way it has a potential to be negative is if there's too much meddling on both sides of campus. If they can keep themselves separate, uh, then I think it's a really important and mutually beneficial relationship.
Anisa Khalifa: But what happens when athletics and academics don't stay separate? That's coming up after a short break.
Matt Hartman: I am Matt Hartman and I'm a higher ed reporter at Assembly
Anisa Khalifa: when Matt Hartman started reporting on higher education in North Carolina. There was one thing he heard that stuck with him.
Matt Hartman: I met with a, an old UNC guy, and one of the things he told me is that there's ever something dramatic or controversial happening at UNC and you can't explain it.
The answer is football, and that seems to exactly be what's happening.
Anisa Khalifa: Earlier this year, Matt took a closer look at UNCs football program, specifically the big bet they're putting on new coach Bill Belichick.
Matt Hartman: Once Bill Belichick got hired, the first things a lot of people heard were just the salary numbers.
He's getting $10 million a year. They made all sorts of promises about how much he would get for revenue sharing with his players, for assistant coaches for upgrades to the program more broadly.
Anisa Khalifa: So adding the Belichick bump onto a football team that already has a $40 million budget, Matt wanted to figure out
Matt Hartman: where is this coming from?
'cause it wasn't clear that there was an answer.
Anisa Khalifa: So where is this money coming from?
Matt Hartman: One of the things we found when we started looking into this was that UNC has been putting money into sports since before Belichick. One of the big takeaways of our reporting was that last year the university put $21 million, $21.4 million into athletics from other sources and.
University spokespeople were adamant that it wasn't coming from state appropriations or tuition dollars, but basically this is money that could have been spent on something else in the university, and they had to do it to prop up the athletic department.
Anisa Khalifa: Why is it such a big deal that UNC is doing this now?
Matt Hartman: Because they really prided themselves on not doing it for a long time. Some of the figureheads at UNC, the beloved figureheads, including Dean Smith in particular, you know, really made a big point about keeping academics at the forefront. And so to pull money that could go to something else, to a lab, to a scholarship and put it into athletics was a signal of a big change.
Anisa Khalifa: To be clear, UNC is far from the only school putting institutional funds into athletics. Matt pointed out that other quote, public Ivys, similar to UNC have been doing the same thing to varying degrees. But what stands out is how much UNC has put into sports. Recently, Matt says in the 2010s and early 2020s.
The university only put about $2 million into sports.
Matt Hartman: To go from that to giving $20 million, $21.4 million in a year is, is a big change,
Unidentified Speaker: and the future of college athletics is changing and we wanna be in the forefront of that.
Anisa Khalifa: This is UNCs athletic director, Bubba Cunningham at the press conference introducing Belichick with the new coach sitting next to him.
The ad made it clear that UNC was declaring a new era for its athletics
Unidentified Speaker: and we are a marking an entirely new. Football operation and we can't wait to have Coach Belichick leading the charge for us.
Matt Hartman: The revenue you can earn in football dwarfs everything else, bar none, right? Like in college sports at UNC and most other places, there are only two sports that make money and it's men's basketball and football, and the amount of money in football is just incomparable.
So the idea is that if you bet big on Belichick, you can raise the prominence of UNC athletics overall, and everyone will benefit.
Anisa Khalifa: How do folks outside of the athletic programs feel about this investment?
Matt Hartman: They are big mad, not all of them, of course, some of them are football fans, but there are a lot of faculty who are. Really up in arms about this. I think the best example to to show that is as Bill Belichick was being announced, I think right after there was a meeting among the faculty and a geography professor pointed out that grad students are still getting paid just over $20,000 a year, and now they're throwing all this money at a football coach, and it just doesn't sit right for a lot of people.
The answer from Lee Roberts, who's the chancellor. Was, if you go and see someone wearing a UNC shirt across the world, it's not because of our political science department, it's because of our sports program.
Broadly, there are lots of people that are gonna complain about universities being run like businesses now, but they are being run like businesses. And the value of athletics to someone like Lee Roberts is in the branding and in sort of building attention and visibility. That's why they think this is worth it.
And for academics who, you know, want to focus on the academics, it seems like a distraction.
Anisa Khalifa: What about in terms of, you know, concrete consequences for things like other programs or resources that might be put at risk at the university,
Matt Hartman: at UNC football and men's basketball turn a profit no other sport does when things are working well, UNC uses the revenue from football and basketball to pay for everything else.
USC has 28 varsity teams, so 26 of them don't turn to profit. So my best guess is if things start going south, the first thing UNC would do is start cutting sports. Bubba Cunningham, the current athletic director, has been adamant that that's not gonna happen, that he's fully committed to maintaining all these teams.
Bubba Cunningham is also not gonna be athletic director for much longer. They've already lined up a replacement for him. Some of the trustees and other people at the university who are big into this Bill Belichick deal have been pretty clear that they don't think it makes financial sense to maintain that number of sports.
So I think that's one of the things that I'm watching, is who is in charge of UNC athletics and how committed they are to maintaining some of those other programs
Anisa Khalifa: in the midst of this changing athletics and academics landscape. How is UNC. A case study or a litmus test for other universities.
Matt Hartman: UNC is in a better position than most schools.
It already has a successful athletic program. It has a huge brand. It has this sort of attention. If other schools try to follow in their footsteps and bet big on football without the resources that UNC has, is even riskier for them. And I think as. Baddest things could be at UNC if this bet goes wrong. I think the bigger risks are for schools like ECU or App State or UNC Charlotte, who are trying to build a football program in UNC Charlotte's case, like basically from scratch right now.
That's an even riskier bet.
Anisa Khalifa: The college football season is just getting started and only time will tell if UNCs BET pays off. The team played their first game earlier this week and uh, it didn't go so great and the heels. Are getting the boot put right to their backside.
Unidentified Speaker: All the Bill Belichick hype and promise. That's all up in the cloud now.
It's all up in smoke after last night's debacle in Chapel Hill. I really don't know how else to describe it, Joe. It was a disaster. Last night was a disaster. Sure. It was the worst case scenario for For North Carolina? Mm-hmm. Okay. Like full stop.
Anisa Khalifa: But no matter their record, the Tar Heels will likely remain in the spotlight.
Thanks in part to an upcoming Hulu docuseries on the team. Are you gonna watch the Hulu series on the team? Yeah, I
Matt Hartman: probably will.
Anisa Khalifa: You sound so unenthused.
Matt Hartman: You know, I, um,
Anisa Khalifa: I mean, do you think that this reality TV series is a bid to increase the revenue in a way that like drive to survive has made the F1 fandom so huge?
Matt Hartman: For sure. This deal will crash. Or thrive based solely on media attention. And so if they can maximize that media attention and turn it into dollars. UNC is getting what they want out of it. It seems like that would require on the field success, but
Anisa Khalifa: you would think,
Matt Hartman: yeah, maybe the reality show of a a bet going wrong will turn into a, a smash it in a different kind of way.
Anisa Khalifa: If you'd like to check out more reporting for Matt Hartman and Scott Doctorman. We've dropped some links in the show notes. This episode was produced by Charlie Shelton Ormond and edited by Jared Walker. Our executive producer is Wilson Ser. The Broadside is a production of WUNC North Carolina Public Radio and is part of the NPR network.
If you have feedback or a story idea, you can email us at broadside@wunc.org. If you enjoyed the show, leave us a rating. A review or share it with a friend. I'm Anisa Khalifa. Thanks for listening, y'all. We'll be back next week.