By 8:30 on the East Coast on Monday night, tens of millions of televisions across the country will be turned to the same channel, as the most-watched program in the history of cable TV — the College Football Playoff national championship game — returns for a second year.
The game, which this year pits undefeated Clemson against one-loss Alabama, is the latest broadcast product created by the conference executives who run major college sports. ESPN is paying $7.3 billion over 12 years to televise the playoff and other bowl games, and most of that money will flow into the five wealthiest conferences. As a result of that massive deal and other recent innovations, there has never been a better time to be one of the men running those leagues.
In a decade, tax records show, average commissioner pay in the so-called “Power Five” — the Atlantic Coast, Big Ten, Big 12, Southeastern and Pacific-12 conferences — has soared from about $541,000 to $2.58 million. As a reward for making an industry fueled by unpaid athletes more lucrative than ever, the men who run these conferences have enjoyed staggering pay hikes doled out by the leaders of many of America’s largest universities.
In 2014, Pac-12 Commissioner Larry Scott made $3.4 million, which is more than six times the $533,000 his predecessor made in 2004. (All 2004 figures in this story have been adjusted for inflation.) Big 12 Commissioner Bob Bowlsby made $2.3 million, more than quadruple the $495,000 the position paid a decade before.
While Scott and Bowlsby are still relatively new, three longtime commissioners saw their pay skyrocket from 2004 to 2014 to do the same job. Big Ten Commissioner Jim Delany’s pay jumped from $549,000 to $3.1 million; ACC Commissioner John Swofford’s went from $571,000 to more than $2 million; and former SEC Commissioner Michael Slive’s increased from $558,000 to $2.05 million. (Slive retired last year; his successor Greg Sankey’s pay has not yet been made public through tax filings.)
Even in the rarified world of American CEOs, these pay hikes stand out, a testament to the recession-proof nature of college sports. Average pay for top CEOs has only recently returned to 2004 levels after falling during the Great Recession; the chief executives of Ford Motor Company and J.P. Morgan Chase, for example, both make less today than their company CEOs did a decade ago, after adjusting for inflation.
From 2004 to 2014, the average CEO of a large American firm got a 15 percent raise, according to data compiled by the Economic Policy Institute. The stingiest raise for a Power Five commissioner during that time: 258 percent, for the ACC’s Swofford.
In interviews over the past few weeks, three commissioners — Bowlsby, Sankey and Swofford — declined to discuss their pay. Delany — who has gotten the equivalent of a 19 percent raise, every year, for 10 consecutive years — declined interview requests altogether, instead offering his chief financial officer. Slive also declined interview requests.
The Pac-12’s Scott was the only commissioner to agree to discuss his pay. He pointed out that the conference has added two schools in the past decade — it used to be the Pac-10 — and launched a television network, giving him more responsibilities and generating more revenue for member schools.
In 2014, the Pac-12 earned $374 million, up from $94 million in 2004. Each full member school in the Pac-12 received at least $21 million from the conference in 2014, up from payouts ranging from $7 million to $12 million in 2004.
“The trajectory and scope of what the conference is doing is now very different,” Scott said. “And, of course, our revenue is different.”
University presidents and chancellors who set commissioner pay also were reluctant to discuss the topic. This week, The Post contacted chief executives at all 53 public universities in the five conferences and requested comment explaining why conference commissioners deserved such large raises. Many said, through spokespeople, that they were unavailable, while 18 executives declined to comment altogether.
Four university executives responded with a defense of rising commissioner pay, including University of Minnesota President Eric Kaler, who spoke on behalf of all Big Ten schools.
“Commissioner Delany has provided invaluable leadership for the Big Ten and its members during a time of great transformation across college athletics,” Kaler wrote. “He has successfully balanced the missions of academic achievement, student-athlete development and athletic success.”
Delany’s pay, Kaler wrote, is “market-competitive and reflects the value and impact of his leadership.”
To critics of amateurism in college sports, such as economist Andy Schwarz, soaring commissioner pay isn’t surprising. In the era of DVR and Netflix, when television networks pay more than ever to broadcast live sporting events, these conferences are seeing the same income growth as professional sports leagues without one major expense: player salaries.
“It’s going to these guys in part because of cronyism, and in part because where else is it going to go?” said Schwarz, who has consulted for plaintiffs in federal antitrust cases against the NCAA and these conferences.
A decade of surging income and rising legal challenges that threaten to permanently change major college sports in America has shifted power to these five conferences. In 2004, no commissioner made as much as NCAA Executive Director Myles Brand, who earned $821,000. In 2014, every Power Five commissioner made more than NCAA President Mark Emmert’s $1.57 million.
“They now have tremendous power. And with that power goes the right to ask for exorbitant salaries,” said Gerald Gurney, president of the Drake Group, a nonprofit advocating for an overhaul of commercialized college sports. “They are the new czars of college athletics.”
“Twitter’s just around the corner, you know,” Pac-12 vice president of public affairs Erik Hardenbergh said as he led a tour of the conference’s new San Francisco office a few months ago. Hardenbergh, a public relations executive from Washington, D.C., who left for the Pac-12 in 2012, pointed out decorative frills as he walked: red wood decking one wall intended to evoke Stanford’s redwood trees, orange rock trim represented arid, mountainous Arizona and Colorado.
Hardenbergh stopped by a touchscreen wall, a 110-by-110-inch display that allows visitors to take an interactive tour through Pac-12 history.
“This is everyone’s favorite stop. You could spend hours on this,” Hardenbergh said.
Minutes later, another Pac-12 staffer led former basketball coach Steve Lavin to the same screen. Fired months earlier from his $1.9 million job coaching St. John’s, Lavin had just joined the Pac-12 Network as a part-time on-air analyst.
In 2004, the Pac-10 was headquarterered 25 miles away, in a nondescript office building near a mall in suburban Walnut Creek. Today, the Pac-12 is headquartered in SoMa, a resurgent San Francisco neighborhood with trendy night spots, art galleries and 600-square-foot loft apartments with rents that start at $3,000 per month.
“I think it’s a reflection of the evolution of the conference and what we’re focused on,” Scott said of the move. Previous commissioners “preferred a more suburban location . . . better cost of living. Creating our own media company, we felt we needed to be here.”
The Pac-12 is one of three Power Five conferences that launched its own cable network in the past decade. While the SEC and Big Ten partnered with media companies — ESPN and Fox, respectively — the Pac-12, under Scott’s leadership, made history by creating the first television network owned and operated by a college conference.
Because of the educational component of their missions (most conference money flows to member schools), the conferences are all 501(c)3 nonprofits, shielding income from taxes. Since the Pac-12 Network is owned by the conference, most of its revenue also is shielded.
The amazing income growth of college sports can be seen touring the hallways of the Pac-12’s headquarters, also the home of the conference’s network. In the past decade, the conference’s payroll has grown from $2.5 million to $28.4 million, as Scott has hired a staff to run a television network.
These fledgling networks focused on college sports have produced significant new income streams for conferences, and thus for schools. Each full Big Ten member school, for example, got about a $27 million cut of conference revenue in 2014. A decade before, those payouts hovered around $13 million. This is why officials at schools that have gained entry to these conferences in the past decade — such as Rutgers in the Big Ten and Utah in the Pac-12 — have touted the moves as financial salvation.
The College Football Playoff likely will only further contribute to the yawning financial gap between Power Five conferences and all others. Various media reports peg the Power Five’s share of the $7.3 billion contract with ESPN at 70 to 75 percent. The other five major conferences involved split the rest.
That gap is visible in the pay for other conference commissioners. The lowest-paid Power Five commissioner — the ACC’s Swofford — made $2 million in 2014. The next-highest-paid commissioner was the American Athletic Conference’s Michael Aresco, at $1.6 million. No other commissioner in college sports made more than $1 million that year.Emboldened with growing revenue, college presidents can now offer recruiting incentives that would have been unthinkable a decade ago.
When the Pac-12 hired Scott away from the Women’s Tennis Association in 2009, the conference gave him an interest-free, $1.86 million loan he used to buy his $1.85 million home in nearby Danville. The four-bedroom, four-bathroom, 4,600-square-foot hillside home features hardwood floors, a gourmet kitchen and wine bar, and “amazing” views of nearby Mt. Diablo, according to online listings.
Scott has yet to repay a dollar of the loan, tax documents show, but in an October interview, he said he plans to pay it off by 2019.
Some of Scott’s peers also have upgraded their living arrangements in the past decade, property records show. In 2008, Delany bought a $2 million home in the Chicago suburb of Hinsdale. In 2011, the ACC’s Swofford spent $250,000 on a waterfront lot on Ocean Isle Beach, N.C., where he built a new four-bedroom, four-bath home with a dock, pool and an elevator. Swofford’s beach home was last valued at about $1 million, records show.
While he declined to discuss his pay, Swofford did talk about how his job has changed.
“The number of people you’re dealing with, the number of programs you’re scheduling, the expanded number of relationships that are necessary to build,” Swofford said. “I don’t know if it’s fundamentally changed that much, because it’s always been about consensus-building.”
While the ACC does not yet have its own network, Swofford said it is considering creating one.
“I’m fairly bullish about the future of sports television for our league,” Swofford said. “There will be continued potential revenue opportunities.”
The biggest threat facing college sports today, commissioners agree, is litigation. Along with the NCAA, the Power Five conferences are defending several cases filed by former college athletes vying for an expanded cut of the billions generated by football and men’s basketball.
“That’s what’s going to determine the future of college athletics,” Swofford said. “Is it going to be the institutions setting the agenda, the NCAA, or the courts?”
In response to lawsuits, the Power Five commissioners have broken away from the rest of NCAA conferences and enacted some of the most sweeping changes in college sports history over the past few years. Among them: Power Five schools now give athletes “cost-of-attendance” stipends of a few thousand dollars along with unlimited meals and snacks, and have promised not to cancel scholarships based on poor athletic performance or injury.
“I look at what today’s student-athletes receive, and it’s pretty impressive,” said Brad Traviolia, Big Ten chief financial officer, whose salary increased from $150,000 in 2004 to $305,000 in 2014. “Is there a lot of money generated by what they do on TV? Absolutely. But the benefits for the students are higher than ever as well.”
The man who helped create “big-time” college sports in America predicted legal trouble.
Walter Byers, the NCAA’s first executive director, saw the promise of television. He negotiated the first TV deals for college football in the 1950s, and for the March basketball tournament that now generates more than $700 million each year for the NCAA. Byers died last year at 93.
Once a fierce proponent of amateurism, Byers ended his career an outcast. He had grown disillusioned and argued for a free market in which colleges could pay players if they wanted to, or at least for the NCAA to permit players to endorse products and put earnings into trust funds they could cash in upon leaving school.
Both of these suggestions outraged college presidents, Byers wrote in his 1997 book, “Unsportsmanlike Conduct: Exploiting College Athletes.”
Written more than a decade before O’Bannon v. NCAA and Jenkins v. NCAA — antitrust lawsuits that seek endorsement trust funds and a free market allowing colleges to pay players, respectively — passages of the book seem prescient.
“Athletics programs are increasingly vulnerable to challenges under antitrust and tax laws,” Byers wrote. “Maximizing of commercial opportunities by the colleges for themselves and their executives are destined to trigger even more serious challenges.”
In the book, Byers noted how quickly some college sports executives’ pay was rising. As an example, he cited Delany, a former NCAA employee who took over as Big Ten commissioner in 1989.
In his first six years on the job, Byers wrote, Delany’s salary nearly doubled.
Jim Tankersley and Magda Jean-Louis contributed to this report.
Over the past decade, the salaries for the commissioners of the Power Five conferences have soared. (The 2004 figures are adjusted for inflation.)
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Source: Conference 990 tax filings, Post analysis
THE WASHINGTON POST