By Leif Skodnick
Professor Elinor Ostrom cracked a small grin as she strode confidently up five short steps to the stage to deliver the lecture that marked the apogee of a brilliant career teaching economics at Indiana University. Seventy-six years old at the time, Ostrom had taught at Indiana since 1965, when she followed her husband Vincent, a political science professor, to Bloomington.
On that December day in Stockholm in 2009, Ostrom, according to the Nobel video of the event, stood at the lectern to deliver a lecture about her life’s work – the study of the economics of management of common resources – most of which was performed at Indiana University. Two days later, King Carl XVI Gustaf of Sweden would present Ostrom, who died in 2012, with the Nobel Prize in economics. She remains the only female Nobel laureate in economics.
That same evening, Tom Crean coached 16 Indiana University students on the management of a common resource – a basketball – in a game against the University of Pittsburgh at Madison Square Garden. Though the Hoosiers would prevail 74-64 that evening, they would go on to win just six more games that season, finishing with a 10-21 record.
Crean was in the second year of his contract at Indiana. His salary for the 2009-10 season was $2,080,000; Ostrom, in her 35th year teaching at Indiana, made $167,018.
Now in his sixth season, Crean has a 101-98 overall record with the Hoosiers. According to his contract, a copy of which was obtained through an open records request to Indiana University’s Office of General Counsel, Crean makes $600,000 in base salary.
In addition, Crean will make $1.8 million for helping to market and promote the University and its basketball program, including making public speeches, broadcast appearances, and cooperating with sponsorship and endorsement agreements negotiated by the university. Among the fringe benefits of Crean’s contract are a term-life insurance policy with a $15,000 per year premium, the use of two new late-model automobiles, and 68 tickets to all Indiana home games. A bonus structure pays Crean if his team accomplishes any of 13 basketball-related achievements during the course of a season, such as a Big Ten Championship or a Final Four appearance, or three academic criteria, including a team grade-point average above 3.0.
Requests for an interview with Crean and Indiana University Athletic Director Fred Glass were declined through sports information director J.D. Campbell.
“A professor has never sold a ticket,” Campbell said when reached at his campus office. “Nor has a professor ever gotten a $20 million broadcasting contract, have they?”
The only public employee in Indiana who makes more than Tom Crean is Carey Lykins, the CEO of Citizens Energy Group, the public trust that provides gas, water, and sewer service to Indianapolis. Lykins makes $2,908,473.98. Every other public employee in the state, including Indiana University President Michael McRobbie ($974,096.85), head football coach Kevin Wilson ($1,221,646.77), and Governor Mike Pence ($111,687.94) make less than Crean. The highest paid professor at Indiana, Dr. Richard Shiffrin, teaches psychological and brain sciences, and will make $388,443.96, or roughly a sixth of what Crean does, in 2014. The salary data was compiled from a database of Indiana public employee salaries maintained online by The Indianapolis Star.
After previous head coach Kelvin Sampson was fired in 2008 for violating rules governing communications with recruits, Indiana turned to Crean, who had recently led Marquette University to a Final Four.
“When they hired him, it was a good hire,” said Alden Woods, an Indiana University sophomore who covers the team for the school paper, The Indiana Daily Student. Woods and all other sources quoted in this story were interviewed by telephone. “The worry was that when he was hired, no one was going to come to IU.”
Some Indiana professors would point to simple economics to explain the disparity between Crean’s salary and the salaries of professors. “The salaries are largely set by competitive markets, and so, for example, business school professors and law school professors and medical school professors make more than English professors,” said Fred Cate, a professor at Indiana University’s Maurer School of Law. “But it’s not because we think it’s more or less important, it’s because the markets requires us to pay the first group more.”
“It was a mess with Kelvin Sampson,” said Robert Jennings, a finance professor at Indiana’s Kelley School of Business, referring to Crean’s predecessor. “Mr. Crean was likely able to negotiate a deal for more than he would have gotten otherwise. He was not likely to have much success with what he was handed. He was taking a risk. Was it worth $2.5 million? I don’t know. It’s hard for me to second-guess.
“There’s a premium for success that has to be paid,” Jennings said. “At least in theory, I’ve seen a correlation between applications and the success of the basketball program. Making Final Fours matters in the bigger picture.”
“It’s certainly true, and this is especially true at the state funded schools, not just that athletics helps attract students, it helps attract state funding,” said Cate, who teaches classes in communications law. “We do better in the state legislature if we’re perceived as contributing in a broader way to the reputation of the state and the cultural life of the state, and athletics is part of that.”
Woods, the student reporter, doesn’t really think Indiana fans care how much money the coach is making, as long as the team is successful on the court.
“The student body, Indianapolis, and across the state, there’s a passion for IU basketball,” Woods said. “They want titles, they want recognition. They don’t care about the money the coach makes. Ninety percent of the people in Indiana are Notre Dame football fans and IU basketball fans, and most of the IU fans didn’t go to IU.”
Some, however, do see Crean’s astronomical salary and question what it means – both at Indiana University, and elsewhere.
“It’s a sad state of affairs. He makes more than the President of the university,” said Michael Lynch, a professor of Biology at Indiana. “But it’s not a situation that’s unique to IU. He must be one of the more highly paid basketball coaches. And it’s not just basketball, it’s football, and even assistant coaches make more than the top professors.”
Lynch said he remembers when huge coaching salaries hadn’t yet permeated college basketball. He was an undergraduate at St. Bonaventure University in Olean, N.Y., in 1977, when the Bonnies won the National Invitational Tournament.
“It was free to go to the games, and that wasn’t that long ago,” Lynch said. “The kind of money being thrown around is extremely different. It’s been a major transition in 30 or 40 years.”
As the child of two educators, Steve Green got the most out of the education he received while playing basketball at Indiana University. After a brief professional career that spanned 52 games in the ABA with Utah and St. Louis and 153 NBA games with the Indiana Pacers, Green returned to Indiana University in 1980, where he earned a doctor of dental surgery degree. Green was Bob Knight’s first recruit at Indiana, and was a two-time Academic All-American.
“My father was a high school basketball coach here in Indiana,” Green said. “I remember making a decision early on after my collegiate career and playing professionally, I don’t know what for sure I was going to do, but I knew one thing, I didn’t want to go into coaching because there was no money in it. But now, I think, ‘Geez!’
“People in academia can’t feel comfortable when it is, as the NCAA states, that this is all about the 99.9 percent of athletes that do not turn pro, it’s about getting an education and then you’re looking at the highest paid public employees in many states [who] are basketball and football coaches at the major universities. So there’s apparently a disconnect now.”
“Crean is a program builder,” said Woods. “He built Marquette’s program up with Dwyane Wade. Ever since, he’s been trying to find another guy like that.”
It appears that next season, Crean will be rebuilding again following a 17-15 campaign in 2013-14. Five players have opted to transfer from Indiana or not play basketball next year, and freshman Noah Vonleh has entered the NBA Draft. A search of twitter returns five accounts with some combination of the words “fire Tom Crean.”
There were calls for Crean, who has led Indiana to two appearances in the Round of 16 in the NCAA Tournament, to be fired at the end of the 2013-14 season. That would cost the university plenty, in the form of a $14 million buyout. That sum was negotiated into Crean’s 2012 contract extension.
While market forces dictate coaching salaries, Ostrom, the late Nobel-winning economist, would likely see them as excessive. In a 2010 interview with The Escotet Foundation, an organization that promotes social innovation, Ostrom reflected on the materialistic nature of modern society.
“We need to get people away from the notion that you have to have a fancy car and a huge house,” Ostrom said in the interview, available online on The Escotet Foundation’s website. “I was born poor and didn’t know you bought clothes at anything but the Goodwill until college. Some of our mentality about what it means to have a good life is, I think, not going to help us in the next 50 years.”