Keeping Score

Money for Nothing: Rutgers Scandal Shines Bad Light on College Sports Search Firms

A newspaper uncovered serious allegations against Rutgers' new AD. The school's search firm didn't. Is that money well spent?

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Julie Hermann listens at Rutgers University in Piscataway, N.J., as it is announced that she is to be its new athletic director.
Mel Evans / AP

Julie Hermann listens at Rutgers University in Piscataway, N.J., May 15, 2013, as it is announced that she is to be its new athletic director.

Like many universities these days, Rutgers University — the state university of New Jersey — hired an executive search firm to help the school find a new athletic director. The bill: $70,000.

Think New Jersey taxpayers wish that money went elsewhere?

The result of that Rutgers search, as we all know now, is a mess. Julie Hermann was hired on May 15, but last Saturday evening, the Newark Star Ledger published a report that featured a letter from the 1996 University of Tennessee volleyball team, which alleged that Hermann — then the Lady Vols volleyball coach — was verbally abusive, and called her players “whores, alcoholics and learning disabled.” Hermann has denied using that language, but such allegations are particularly problematic at Rutgers. It was only in April that basketball coach Mike Rice, and the athletic director Hermann was hired to replace, Tim Pernetti, were dismissed after a video of Rice hurling balls at the heads of players, and shouting homophobic slurs at them, went public.

Stung by the PR bruising it had taken as a result of the Rice controversy, Rutgers assembled a 28-person search committee to help the school hire a new athletic director. Within that committee, a six-person executive group was most involved in the process. According to Candace Straight, a member of that executive committee, the search firm Rutgers hired — Parker Executive Search — did not make her, or, to her knowledge, any other executive committee members aware of the allegations against Hermann from the volleyball team. Straight, however, said the committee was aware of two discrimination lawsuits that involved Hermann.

(The two co-chairs of the search committee, Richard Edwards, the executive vice president for academic affairs at Rutgers, and Kate Sweeney, a Morgan Stanley financial advisor and Rutgers alum, did not respond to interview requests. Through a spokesperson, Parker would not comment on the specifics of the Rutgers search, citing confidentiality. Parker, however, continued to highlight the Hermann hiring as one of its “Recent Engagements” on its website ).

So according to Straight, an investment banking consultant, the firm that Rutgers paid $70,000 to vet its next athletic director –Parker–either failed to uncover the allegations about Hermann’s volleyball tenure which the Newark Star Ledger did during its own background reporting, or did not reveal the info to at least one member of the six-person executive committee. Hermann has also said that Parker did not ask her about the 1996 volleyball team charges during the interview process.

(MORE: Lessons From The Latest Rutgers Scandal)

Straight gives Parker a pass, noting the firm can’t be expected to reach everyone a candidate has ever come in contact with. “I do not blame Parker for not calling [the volleyball players],” says Straight. “I don’t think I would have called either.” (Straight also says that she still supports Hermann’s hiring).

But to at least one other administrator, Parker whiffed. Susan Schurman, dean of the school of management and labor relations at Rutgers, and a member of the wider 28-person search group, told the Associated Press she was “mystified” and “dumbfounded.” “I have to say that the reason you hire executive search firms, at least when I was vetted for the job at Rutgers several years ago, they appeared to go back to kindergarten,” Schurman said.

“People are unhappy about it,” Shurman, whose involvement in the search process was limited, told TIME on Wednesday.  “It’s done the University a disservice, it’s done Julie Hermann as disservice … something went wrong in this one. It’s very unfortunate.”

The latest Rutgers scandal has brought attention to a rising cottage industry in college sports, one shrouded, for the most part, in secrecy: the search firms that help fill coaching and administrative positions. (Parker is one of the top firms).  In April, Sports Illustrated ran a feature story on these firms; here’s one key passage from writer George Dohrmann:

Even at a time when budget cuts in higher education are common, more and more athletic department dollars are following the route of private industries and hiring headhunters. Search consultants now operate as the conduits to some of the best coaching and athletic director jobs in the country. Fees generally range from $30,000 to $90,000 for a Division I athletic director, men’s basketball coach or football search, though higher tabs have been reported. Since 2005, Tennessee has paid more than $360,000 to search agencies to fill six positions. North Carolina State has spent $255,000 for approximately 67 days of work over the past three years, including $90,000 for a football search that lasted a week. In late 2011, Colorado State reportedly paid the firm Spencer Stuart $250,000 to find a football coach (former Alabama offensive coordinator Jim McElwain), a transaction that one rival headhunter called “thievery.”

The most important responsibility for a college athletic director is to hire and fire coaches. Yet, some universities are outsourcing some of the heavy lifting on these tasks to outside firms, at a steep cost. Which is kind of odd for big sports like basketball and football: even casual followers of college sports can tell you who the good coaches are. Their job performance is published on websites and newspapers across the country — in the form of standings. And a transactions report can tell you who’s on the move.

Hiring a firm to find an athletic director, like Rutgers did, makes a little more sense: most administrators aren’t public figures, like coaches. Still, it’s not hard to decipher which athletic departments perform. Common sense can tell a university official where to look.

As Sports Illustrated points out, the search industry tends to feed off itself.  An athletic director gets hired with the help of a search firm. So when it comes time for that athletic director to hire a coach, the athletic director feels a natural obligation to hand the search firm some business.

College sports search firms aren’t bankrupting athletic departments, by any means. And when they help a school hire a winning coach, the investment can pay off. But as we’ve documented on multiple occasions, college sports spending has gotten out of control. A January report from the American Institutes for Research found that among those schools with major college football teams, spending per athlete increased 51% between 2005 and 2010. Meanwhile, per student academic spending rose 23%. Athletic subsidies — money from other university resources, student fees, or state appropriations used to support sports — were growing at a much faster rate than overall per capita school spending. For these Football Bowl Subdivision Schools, athletic subsidies per athlete spiked 61% between 2005 and 2010 (compared with the 23% rise for per student academic spending).

So all college sports stakeholders — and that includes students, the athletes themselves, and in the case of many public universities, taxpayers — have good reason to wonder: is the extra expense of a sports search firm really worth it? You can be sure many angry folks in New Jersey think they already have the answer to that.

(MORE: At Final Four, It’s Mike Rice On The Mind)