Making Dollars and “Sense” at Duke

By Avram Wolfman-Arent

Coach K has had a lot of practice cutting down the nets. (Photo: Google Images)

Coach K has had a lot of practice cutting down the nets. (Photo: Google Images)

In the fall of 1968, Duke’s Academic Council—the university’s equivalent of a faculty senate—convened an ad hoc committee to explore the financial and moral well-being of the school’s athletic program. The inquiry arose from concerns over the athletic department’s $500,000 annual deficit, but its goals were loftier.

“We hoped we could reconstitute athletics to be what it could be, [so it] would not dominate the scene like it does today,” says retired Duke Sociology professor Jack Preiss, who was among the committee’s five members and spoke, as all interviewed for this story did, by phone.

Professor Jack Preiss had his questions about athletics over the years. (Photo: Duke University)

Professor Jack Preiss had his questions about athletics over the years. (Photo: Duke University)

By modern standards, the committee’s recommendations, issued one year later, seem equal parts quaint and radical. One proposal sought to ban red-shirting—the practice of holding a player out for a year—while another said varsity coaches should refrain from meddling in their players’ off-field lives. The committee’s boldest recommendation, however, was its first:

“Duke University, as soon as contractual and other arrangements permit, should leave the Atlantic Coast Conference and seek competition with educational institutions whose standards, programs, and interests are compatible with our own.”

The report went on to advocate the formation of an alternative athletic conference modeled after the Ivy League that would include other academically prestigious, private universities. This, the committee admitted, amounted to a “kind of de-emphasis” of major collegiate athletics.

Perhaps more surprising, the committee’s proposal was at least reasonably representative of prevailing attitudes on campus. A survey administered by the committee found that just 53 percent of students, 50 percent of alumni and 20 percent of the faculty wanted the school to remain in the ACC. At the dawn of the 1970s, the Duke community appeared willing to withdraw from top-flight college athletics.

Duke’s administration, however, was not. In August of 1970, Duke president Terry Sanford, who had assumed the office just three months earlier, roundly rejected the committee’s suggestion to leave the ACC. “Duke University has a fine tradition of athletics at the intercollegiate level,” Sanford wrote in his formal reply. “We expect to continue it. It is an inherent part of this university and should remain so.”

Sanford’s commitment to athletics echoed a deeply embedded institutional ambition that dates to Duke’s earliest days. According to a popular campus legend, tobacco magnate James B. Duke had originally intended to buy Princeton before settling on the purchase of Trinity College, as Duke was known before 1924. So prevalent was the story that former university archivist William King took pains to officially debunk it in a 1997 article. The tall tale’s very existence, though, speaks to the institution’s fierce, foundational desire to be considered among the nation’s academic elite. “This is a very ambitious university, always has been,” says William Cohan, a Duke alumnus and author of “The Price of Silence,” a recent book about the Duke lacrosse scandal. “It’s accomplished more in 75 years as a university than any other university in the country, and part of that is because of the success of athletics.”

Early Duke leadership saw college sports as an opportunity to publicize the school’s brand beyond the Carolina pines. “The first structure that opened on West Campus was the football stadium—before the library, before the chapel,” says Chris Kennedy, Duke’s Senior Deputy Director of Athletics. “They were very conscious about what they were doing and they were very cognizant about the role of athletics in that, particularly football.” In 1931, the university hired famed Alabama coach Wallace Wade to lead its football team. Between 1936 and 1945 Duke would finish the season ranked in the AP poll nine out of ten seasons.

By the 1970’s Duke’s football fortunes had faded, but its institutional drive remained robust. Fueled by what Sanford would later term “outrageous ambitions,” Duke was aching to ascend, its aspirations so transparent they had entered the realm of caricature. In 1975, the student newspaper ran the headline “J.B.’s dream fulfilled: Ivies accept Duke” in its April Fool’s Day edition. Keith Brodie, Sanford’s eventual successor as president, arrived at the university a year earlier, keenly aware that the school was searching for a catalyst that would speed its metamorphosis from regional college to research university. “For Duke to produce on the national stage we have to produce something that’s world class,” Brodie remembers thinking.

Coach K earns his big bucks every March. (Photo: Google Images)

Coach K earns his big bucks every March. (Photo: Google Images)

That something walked onto campus in 1980 in the form of former West Point coach Mike Krzyzewski. A protégé of Indiana head coach Bobby Knight, Krzyzewski inherited a program that had made the national championship game in 1978 but had been ranked only sporadically since a stellar run under former coach Vic Bubas in the early-to-mid 1960’s. After enduring early struggles under Krzyzewski, Duke qualified for the 1986 Final Four. Five years later the program won its first national championship—followed by a second the next season. By 2011, Krzyzewski had four national titles to his name.

That year, according to U.S. tax records, Krzyzewski made $9,682,032 as Duke’s basketball coach: $1,978,401 in base compensation, $5,642,574 in bonus and incentive compensation, $1,982,097 in deferred compensation, $19,344 in nontaxable benefits and $59,616 that was filed under a category titled “other compensation.” That total makes him the highest-paid coach in college sports according to a salary database maintained by USA Today. A university spokesman said Duke, which is a private university, does not comment on employee salaries and was not able to provide any further breakdown of Kryzyzewski’s salary, which was more than eight times higher than Duke president Richard Brodhead’s $1,180,027 compensation. The spokesman did, however, confirm that all of Kryzyzewski’s compensation came out of university funds.

Krzyzewski’s salary reflects both his individual success, the broader rise of coaching salaries across college sports, and, at Duke specifically, a case of good timing. “The basketball team starts to emerge right as Duke starts to emerge as a major university,” says Paul Haagen, a Duke law professor since 1985 and a co-director of the school’s Center for Sports Law and Policy. Krzyzewski has become the public face of that emergence, Haagen says, placing Duke on a sort of athletic “path dependence” that requires it keep pace with college sport’s biggest spenders.  “We’re going to ride this horse until it implodes,” Haagen says.

Though it’s difficult to isolate basketball’s contribution, Duke has enjoyed tremendous institutional growth during Krzyzewski’s tenure. Since 1990—the year before Krzyzyewski’s first national championship—the school’s graduate population has doubled and its endowment has increased from about half a billion dollars to six billion dollars. In the most recent edition of U.S. News and World Report’s college rankings, Duke ranked seventh among national universities. U.S. News and World Report wrote of the school, “Located in Durham, N.C., Duke University is a private institution that has liberal arts and engineering programs for undergraduates. The Duke Blue Devils sports teams have a fierce rivalry with the University of North Carolina-Chapel Hill Tar Heels and are best known for their outstanding men’s basketball program.”

That two-sentence description conveys how integral sports have become to the Duke brand. Supporters say Duke’s athletic reputation helps distinguish it from its peers. “You have to differentiate yourself from other places and the question is how do you do it,” asks Charles Becker, an economics professor who serves on the executive committee of the school’s Arts and Sciences Council. “When we’re trying to attract top students we have to take what’s given to us.”

Maintaining that advantage, however, comes at a rapidly escalating price. In the last decade, Duke’s athletic budget has ballooned from about $31 million to just over $76 million according to figures the university reported to the U.S. Department of Education. The university also subsidizes the athletic program about $14 million per year, roughly double what it offered ten years ago. Chief administrative and financial officer Tallman Trask III says that subsidy tests the bounds of what he would consider reasonable for an athletic department. “We’re pushing up against what we’re willing to spend institutionally,” says Trask.

West Point gave Coach K the foundation he needed. (Photo: Yahoo)

West Point gave Coach K the foundation he needed. (Photo: Yahoo)

The current subsidy was established in 2008 as part of an athletic department strategic plan titled “Unrivaled Ambition.” The plan emerged from a realization that the department’s fiscal health rested rather precariously on the shoulders of Krzyzewski and his men’s basketball program. “It’s a pyramid standing on its point,” Kennedy says of Duke athletics. “And the point is basketball.” For Duke to ensure long-term sporting relevance—and revenue—the department felt it needed to revive its moribund football program, acccording to Kennedy. That would take cash, and the strategic plan was poised to deliver.

By the time the athletic department’s plan reached the Academic Council, the faculty faction that opposed or questioned Duke’s involvement in big-time college sports had narrowed to a band of noisy outliers. In April of 2008, anthropology professor Orin Starn, one of the chief dissenters, rose at an Academic Council meeting to voice his displeasure with the strategic plan. “I really feel like we’re missing a major opportunity here,” Starn said according to official minutes kept at the meeting. “I think we have an opportunity in thinking about athletics and the future at Duke to set an example for other Division I schools and to scale back athletics.”

Starn’s vision was almost identical to the one expressed exactly 40 years earlier by Jack Preiss and the ad hoc committee on athletics. This time, though, there was no chorus of approval. Instead, Chris Kennedy rose to answer. “We’ve never met face to face,” Kennedy said.  “But my guess is that you are Orin Starn.”  The record notes that Kennedy’s comment was followed by laughter.

Jack Preiss still lives in Durham. His house on McDowell Road is a five minute drive from the Michael W. Krzyzewski Center, a $15.2 million practice facility that is adjacent to Cameron Indoor Stadium. Preiss knows whatever brief opportunity existed in the late 1960’s to reorient Duke athletics has passed. His dismay, however, has not. He prefers women’s college sports to men’s, citing the relative lack of commercialism. Mostly, though, he just shakes his head, incredulous that the business of college competition has grown so large so quickly, incredulous that the education of young people seems so incidental to the entire operation.

“The thing you call college sports now is just a euphemism,” Preiss says. “It doesn’t make any sense.”

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