Bad incentives in Rob Mullens contract

9/30/2010: I’ve posted a copy of the freshly signed contract for UO Athletic Director Rob Mullens here. I asked for it because I was curious about the talk I’d been hearing about the “Director’s Cup”. This is an NCAA competition between athletic directors for the most successful overall athletic program.

I can see why Mr. Mullens would care about this – great for his career – but it’s irrelevant to UO and to most of the boosters, who care about football, basketball and of course track. What UO wants – or should want – is an athletic program that does not require annual $1.1 million state lottery fund subsidies, $1.8 million UO general fund subsidies for athletic tutoring and the jock box, and $600K subsidies from UO staff, faculty, and students for the $40,000 per slot arena parking garage.

So, does Mullens’s contract give him incentives for reducing these subsidies? No. Instead it rewards him for the very thing that he already cares about, and that we don’t:

Last year UO was 14th in this competition. So UO can drop from 14th to 19th place, and Mullens will still get $20,000 “in consideration of the extraordinary work he will have performed”. Talk about softball.

Even worse, because performance in this Director’s Cup depends in part on the number of NCAA teams UO has, this clause gives Mullens a perverse incentive *not* to take the tough steps that will be needed to simultaneously keep Chip Kelly happy and wean the athletic department from the subsidies they are now receiving – drop a few money losing sports. UC-Berkeley just did this and saved $5 million for the academic side. Their AD went berserk. Tough shit.

But wait, that’s not all. At Kentucky, the athletic department’s annual report notes this:

As part of its ongoing commitment to help support the University’s goal of becoming a top-20 research institution, UK Athletics will donate $1.7 million in 2010-11 toward the university’s general fund and in support of UK’s Singletary Scholars program. During the past eight years, the department has given more than $13 million in over- all scholarship support of the University’s academic mission.

Maybe Kentucky fudges the numbers too, but at first glance, at Mullens’s last job the athletic department actually helped the academic side. At UO they just take. And UO’s contract with Mullens does nothing to address that problem.

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