John Stoessel Labels College a Scam
Are Recent Tuition Hikes Justified in California Colleges and Universities?

The Selling of American Universities

Commercialism and Universities

This is the second in a three-part series of blogs on the state of colleges and universities. The first looked at John Stoessel’s criticisms of the value of a university education.  In today’s blog I look at the disturbing trend of the commercialization of universities. This blog I based on a published research paper of mine titled "Commercialism and Universities: An Ethical Analysis" (Journal of Academic Ethics Volume 8, Number 1, pages 1-19.) My third blog will deal with whether college costs have gotten out of control.

As a consequence of the depressed economy, federal deficits, lack of state funding, budget cutbacks for higher education, and inadequate funding for specialized programs at universities, the increasing solicitation of outside sources of funds by universities is an economic reality. These kinds of relationships can create a conflict of interests that impairs objective decision making by promoting a company or product on campus that may not be socially desirable such as the decision to name the athletic lodging facility on the campus of the University of Kentucky the Wildcat Coal Lodge. The reality today is that university administrators, who have significant decision-making powers, proactively seek large corporate sources of funding that may compromise academic values including academic freedom and the ability to make institutional decisions without the influence of commercial interests. I am mostly concerned with the disturbing trend of increased commercial ties between universities and companies that have led to corporate partnerships with companies such as Coca-Cola, Pepsi-Cola, and Nike. These kinds of relationships limit student freedom of choice and they create a conflict of interests and impair objective decision making by promoting a product on campus that may not be a socially desirable choice.

In 1992, Penn State University signed a $14 million, 10-year contract with Pepsi-Cola giving the beverage company exclusive vending and advertising rights on each of 21 campuses collectively totaling 70,000 students. The executive vice president and provost of Penn State justified the deal by pointing out that the state legislature had cut the university’s $250 million budget by 3.5 percent.  Not to be outdone by Pepsi-Cola, in December 1997 Coca-Cola signed a 15-year agreement with the University of Maryland for $8 million up-front and $260,000 per year in potential commissions. The University of Minnesota, with 37,000 students, has the record: a $28 million (non-guaranteed) 10-year contract with Coca-Cola. It has been estimated that more than 100 campuses and state higher education systems in the U.S. had inked deals with one of the two soft drink companies. The granting of exclusive distribution and sales rights to Pepsi-Cola and Coca-Cola limits student choice of more desirable, healthier soft drink.

Nike was founded on January 25, 1964 as Blue Ribbon Sports by Bill Bowerman and Philip Knight, and officially became Nike, Inc. in 1978. Objections to Nike’s influence in sports on college campuses can be traced back to at least the 1997 deal with the University of North Carolina at Chapel Hill, when the company provided UNC with what it valued at $7.1 million in athletic gear and gave $4 million in cash to Carolina’s coaches. Nike paid the university an additional $400,000 to the Chancellor’s Academic Enhancement Fund. In exchange, Nike received the right to outfit the school’s athletes on all 28 varsity teams with uniforms bearing the company’s logo – the Nike swoosh. The deal, a renewal of a 1993 contract, sparked campus controversy in which some students protested alleged mistreatment of workers at Nike-contracted shoe factories in Southeast Asia and others demonstrated in the company’s defense. University Chancellor Michael Hooker criticized the company’s critics as well as news coverage of the issue. The chancellor likened the controversy to a “witch hunt mentality” and described the media focus on Nike as “intellectually dishonest.”

Critics of the Nike deal point to the unwarranted influence of the company on campus. Former UNC President William Friday pointed out that the university does not allow other companies to negotiate such contracts and especially criticized the payments to the coaches. Friday believes Nike’s success at commercializing amateur sports has distracted the university’s attention to what it should be doing because the power of money influences objective decision making.

One problem with the Nike deal is what to do when a faculty member or student objects to wearing the Nike logo. A former assistant coach with the St. John’s University men’s soccer team filed a lawsuit against the university and Nike on November 19, 1999, claiming that he lost his job because he refused to wear shoes and clothing with the Nike swoosh because he believes the company’s labor practices violate the social teachings of the Roman Catholic Church and the mission of St. John’s. The former assistant coach asserted that Nike apparel is produced in deplorable working conditions in Indonesian Nike factories.

Defenders of the Nike deal point out that without it, students and taxpayers would have to come up with the money for uniforms and shoes. However, this argument is shallow as we could extend that reasoning and say Paper Mate should provide all pens and pencils on campus with their name prominently displayed. Texas Instruments should provide all calculators. What about Dell providing all computers? Where does it stop?

The Wildcat Coal Lodge houses the men's basketball team of the University of Kentucky. I have to ask whether a university (no less a public institution) should use “dirty coal money” to finance a building on campus. A conflict of interest issue exists because the agreement required that coal must be in the name of the building rather than continuing to name the facility Joe B. Hall Wildcat Lodge after the beloved coach. Typically, buildings on campus are named after donors who have a direct link to the purpose of the building. For example, the Haas School of Business at the University of California at Berkeley is named after the CEO and founder of Levi Strauss, Walter A. Hass, whose family and business interests go back to the early 1900s in the San Francisco Bay Area. Another consideration is that business schools typically stress to their students the importance of acting in a socially responsible and environmentally-friendly way, and it may be difficult to square that perspective with the use of coal in the name of such an important structure on the University of Kentucky campus.

I am disturbed by the blurring of the distinction between philanthropy and  Buy college advertising. The necessity of corporate funding exists because of cutbacks in public and private funding for universities. University support for certain products such as Coca-Cola, Pepsi-Cola, Nike, and the coal industry raises legitimate concerns of students who object to the institution’s support and promotion for a product they consider unhealthy or made by a company that engages in socially irresponsible behavior. If institutions of higher learning continue down the path of commercialization, there may come a time when even the name of a university goes to the highest bidder, as has college bowl game naming. Just imagine the possibilities such as the Tostitos University of Arizona!

Blog posted by Steven Mintz, aka Ethics Sage, on July 23, 2011

Cartoon reproduced with permission