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Schools question athletic fees

The N.C. athletic association is boosting its endowment fund while giving relatively little money back to schools.

By Pat Stith
(Raleigh) News & Observer

As travel costs increase, some high schools across North Carolina are considering changing their game schedules. Nearly all schools depend on booster clubs to raise money for uniforms and equipment.

But the association the high schools belong to is rich – and getting richer.

The N.C. High School Athletic Association, which administers the state's athletic program for public schools and some private schools, collects dues from the high schools and takes a big slice of the championship playoff ticket sales. It makes money on catastrophic insurance that schools are required to buy for their athletes. It has also tapped into corporate money, endorsing products for contributions.

The association is worth at least $18 million, thanks to an average growth of almost 20 percent a year since the late 1980s. The $18 million includes an endowment fund established to benefit the high schools, but the association has given relatively little of its endowment revenue back to its members.

Charlie Adams, the association's executive director, says that for several years, the board of directors has talked about returning more to the schools.

“And each time we do, I guess we always (said), ‘Well let's get just a little bit more,'” he said.

The endowment now has $11.5 million, and Adams said he hopes it will continue to grow. In addition, the association has enough reserves on hand to pay for almost two full years of normal operating expenses, nearly $4 million a year.

Association board minutes from the late 1980s, when the endowment was being considered, show the original intent was to use the profit from the investments to eliminate membership dues and to pay for the catastrophic insurance.

That hasn't happened.

During the seven years ending last June 30, the association's accountant says it sent less than $600,000 in endowment revenue back to the schools. During that same period, the endowment earned almost $1.8 million.

Most athletic directors say that the association does a good job, and they're glad it's piling up money. But some say it should start giving back to the schools.

Bobby Guthrie, Wake County athletic director, is a member of the association's board. He says some of his schools' athletic directors have asked: How much is enough?

“At a certain point, shouldn't the board be looking for a way to return more of the growth to the members?” Guthrie said.

Myers Park athletics director Greg Clewis said the $68 travel reimbursement the association gives him for a playoff game in Greensboro, for example, hasn't kept pace with the cost of the trip. He spends $750 to charter a bus. Meanwhile, a dollar from every playoff ticket sale goes to the association.

“It's time to say, ‘Let's back up on the percentage we're spending and get some of the money back in the hands of the membership,'” Clewis said. “Let's do away with the $1 playoff ticket surcharge.”

The association, however, is neck-and-neck with Iowa as the wealthiest high school athletic association in the country.

When Adams, 71, took over in 1984, the association had less than $600,000 in the bank, enough money to cover less than a year of operation.

“It scared me to death,” he said. Adams is still concerned about money, and whether bad times might be just around the corner.

Adams' annual salary, $190,164, makes him the highest-paid high school athletic association executive director in the country.

Compared with the heads of big state agencies, such as Transportation and Health and Human Services, who supervise thousands of employees and billion-dollar budgets, Adams is handsomely paid. The secretaries of those agencies make $117,142 a year.

Adams said he is not overpaid. He said his salary should be compared with the salaries of executive directors of other state high school athletic associations. His salary compares very well, although 11 other executive directors make more than $150,000.

Robert Kanaby, executive director of the National Federation of State High School Associations, calls Adams, a past president of the federation, “one of the most innovative, thoughtful and passionate leaders for high school athletics in the country.” Adams raises money from a variety of sources.

To fund the endowment, the association allows teams to play one extra game, and it takes 25 percent of the game's gross revenue. Every playoff ticket has a $1 surcharge and, for the last several years, penalties for rules violations also go to the endowment.

The association's general fund gets dues of 75 cents per student from schools. It also takes between 15 and 25 percent of gross proceeds in most rounds of the playoffs and 60 percent of the net from the finals. And the association makes money on the sale of catastrophic insurance and merchandise.

Part of the association's financial success is due to its cultivation of several dozen corporate sponsors, which years ago included The (Raleigh) News & Observer. Cash and in-kind payments from corporate sponsors and cities that hosted championship events totaled just over $1 million this fiscal year, about 20 percent of the association's total revenue.

Wachovia, the oldest and biggest corporate sponsor, is the “exclusive sponsor” of the association's awards program and contributed $130,000.

Vann Pennell, the principal at South Brunswick High in Southport and former president of the high school association, said its main focus is not money. He said he's never seen a group as committed to serving students.

“It is not a greedy organization,” Pennell said.

News & Observer researcher Brooke Cain and Charlotte Observer staff writers Langston Wertz Jr. and Julia Oliver contributed.

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