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Iowa president fails economics 101 in proposal to have athletics save academics

Late in this past week, University of Iowa president Bruce Harreld made some noise by calling for the Hawkeyes sports programs to start contributing to the academic budget of the university.

It was a call that was a complete reversal from where the Iowa athletic department was just over a decade ago — receiving funding support from the university itself. Since then, Iowa has become a self-sustaining entity within the university system.

Apparently that isn’t good enough for Harreld, who is facing his own budgetary issues and sees the millions of dollars earned as a member of the Big Ten conference as a way to eat in to said budgetary issues.

Harreld made these comments to the Iowa Daily Herald late last week:

“Several years ago, maybe a decade ago, this institution said we’re not going to move money from academics into athletics. Athletics is going to have to sit on its own bottom, so to speak. That’s the phrase I heard. Somebody made that statement, and that’s where we are.

The next step might be that we have a more formal passing of athletics now. For good or for bad, the sports-world revenue in terms of TV, radio, website, fans, the stadiums is a machine. SEC, Big Ten, Pac 12, right? As those revenues have gone up, I think it’s high time that we ask another question — could they actually help deal with those fiscal issues that we’ve got?”

There’s just one problem — Harreld apparently has no clue about Economics 101.

If you have more expenditures than revenues taken in, what is that called? A deficit.

One look at the 2015-16 Iowa Hawkeyes athletic budget and you realize that its success on the football field also came with plenty of added expenses off the field. All of it leading to a budget deficit that must be made up with reserve cash that the Hawkeyes athletic program has on hand.

“Not until June will we know exactly where this year’s budget ends up,” Barta said during an April 7 meeting of the UI Presidential Committee on Athletes. “We know there will be a deficit, and that’s really a combination of season ticket sales and football ticket sales coming into the year, and then this odd dynamic of having this wonderfully successful season and just paying for all the things that go with having a great season.”

That’s the reality of the program today, as we sit here together. Yet, Harreld believes he should be getting a chunk of the pie that the university a decade ago wished to not support anymore.

In calling for AD Greg Barta to start paying in to the academic side of life at the university, Harreld shows his complete lack of understanding of the reality of the program that puts his university on the national map.

He also doesn’t understand the reality for the vast majority of division 1 programs across the country. Most are at the break-even point or loosing money on an annual basis, and Iowa has very much been in that category for most of the last decade.

If you are running at no profit or even having to dip in to the reserves to make things happen, how exactly can you push more money in to a new project? After all, it isn’t like a booster can just come in and make that annual contribution.

What Harreld is calling for is about as hypocritical as possible.

Essentially, the academic side said they were sick of propping up the athletic department when it was falling behind on the budget and now that there are asking for the same support to get rid of its own budget issues.

Perhaps if this were Ohio State or Texas or the few other schools that generate a profit on an annual basis this wouldn’t be an issue. Perhaps if it were Wisconsin, where they usually end the year in the black and give back to the academic side in multiple ways throughout the year it would be okay.

But, to just blatantly go for the money grab in such a self-serving and economically stupid way shows just how little Harreld gets what is going on in the world of academia and athletics today.

Where exactly does Harreld believe that the $30 million annual payment from the Big Ten goes to? It is money allocated in every budget that Barta and Co. put out there, and taking any portion of it away would only ensure that Iowa be more hamstrung in its budget.

At the end of the day, there is only so much athletic department money to go around and assuming that paying for tutors and other academic support for the student athletes isn’t contributing to the academic life of the university is also far-fetched.

If the Hawkeyes aren’t financially stable and able to turn significant profits annually, asking them to contribute to the academic side of things is a recipe for disaster on all fronts.

Just ask Wisconsin, Maryland and countless other programs how brutal  it is to have had major budget issues. It’s what made both programs make severe cuts to athletic programming and for the Terps to make sense out of the jump to the Big Ten.

Herrald’s idea is a great one, having a symbiotic and mutually beneficial relationship would be great. However, we all need to live in reality and today’s reality is that there is no way in heck Iowa athletics could make a significant enough of a contribution to the academic side of life to matter much.

Symbolic isn’t symbiotic and one would think a man with a PhD would at least understand Econ 101.

Andy Coppens is the Founder and Publisher of Talking10. He's a member of the Football Writers Association of America (FWAA) and has been covering college sports in some capacity since 2008. You can follow him on Twitter @AndyOnFootball

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