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NCAA, Schools Need Financial Transparency, House Bill Says

NCAA President Mark Emmert
National Collegiate Athletic Association President Mark Emmert said in his testimony that the differences in reporting obligations between public and private institutions were a principal roadblock to greater transparency. Photographer: Nick Laham/Getty Images

July 15 (Bloomberg) -- Athletic departments, conferences and the governing body of college sports should be more transparent financially, according to a bill co-sponsored by a pair of U.S. congressmen.

The Standardization of Collegiate Oversight of Revenues and Expenditures Act, or SCORE, was introduced yesterday by representatives David Price, a North Carolina Democrat, and Republican Tom Petri of Wisconsin. The bill proposes an overhaul of financial reporting for the National Collegiate Athletic Association and its members in an effort to create more public understanding of the money behind college athletics.

“College sports are one of America’s proudest traditions, but the current system isn’t working equally well for all participants,” Price said in a release on his website. “Constructive, realistic reforms depend on a clear understanding of the financial pressures and benefits of intercollegiate athletics.”

The bipartisan bill comes at a time of unprecedented scrutiny for the NCAA and its member institutions, including a handful of lawsuits and an effort by Northwestern University football players to form the first players’ union in college sports.

In broadcast contracts, the NCAA and the five power conferences are guaranteed more than $31 billion. That doesn’t include sources of revenue such as sponsorship, merchandise sales, ticket sales and booster donations.

Public Accountability

The bill mentions the Indianapolis-based NCAA, its member institutions, conferences and any entity that hosts a postseason tournament, such as the College Football Playoff, which debuts next season.

“At a time when outstanding student loan debt is over $1 trillion, it makes sense for the public to have an idea about how colleges and universities account for and use revenue from ticket sales, advertising and contracts,” Petri, a member of the House Education and the Workforce Committee, said in the release.

The proposal is “fishing expedition” that demands information without indicating what it will be used for, according to Terry Hartle, senior vice president of the American Council on Education, a trade association of college and university presidents. Hartle said the federal government would also face costs to compile, manage, process and publish the data.

“Usually in the public policy process you start with a pretty clear definition of the problem you are trying to solve and then you figure out how to go about dealing with it,” Hartle said today in a telephone interview. “This basically says, ’We know you have lots of data, send it all to us and we’ll figure it out.’”

Senate Hearing

Last week, the U.S. Senate Committee on Commerce, Science and Transportation held a hearing to evaluate the state of college athletics. NCAA President Mark Emmert said in his testimony that the differences in reporting obligations between public and private institutions were a principal roadblock to greater transparency.

“Accordingly, no consensus has been reached to provide financial data other than in aggregated formats,” Emmert said. “It’s difficult to envision an immediate resolution.”

Public Data

All the data requested of individual schools is already collected annually by the NCAA, according to the release. Itemized sport-by-sport reports from public universities are available through Freedom of Information Act requests, as are coaches’ contracts and media deals. Such data from private institutions are not covered by FOIA laws.

The NCAA, a non-profit institution, currently publishes financial information on its website, including annual financial statements and revenue distribution plans.

The U.S. Department of Education each year publishes online a small amount of athletic financial data from both public and private institutions. The disclosures lack the detail desired by Price and Petri.

This is the third time in less than a year that a bill related to college athletics has been introduced in Congress, according to USA Today.

In August, a bipartisan bill proposed increased due process for NCAA programs accused of misconduct and making four-year scholarships mandatory in contact sports, the paper said. A November bill would have required colleges to provide athletes with benefits when a scholarship is lifted for reasons other than misconduct or academic failure.

To contact the reporter on this story: Eben Novy-Williams in New York at enovywilliam@bloomberg.net

To contact the editors responsible for this story: Michael Sillup at msillup@bloomberg.net

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