University of Iowa Athletics to reimburse taxpayers for $2M football settlement costs

IOWA CITY — University of Iowa Athletics will pay back the state for $2 million that taxpayers covered of a $4.2 million deal to settle a discrimination lawsuit 12 former football players filed against UI Athletics and its coaches, UI President Barbara Wilson said Thursday morning.

“I appreciate the work and due diligence of the Iowa Attorney General and State Appeal Board,” Wilson said in a statement. “After listening to the concerns of Iowans, and in consultation with Board of Regents leadership, I have determined that the University of Iowa Department of Athletics will reimburse the state general fund for the $2 million due to the recent settlement.”

That decision amounts to an about-face for the campus, according to Iowa State Treasurer Roby Smith, who issued his own statement Thursday afternoon reporting to have met with attorney general staffers Monday.

“During that meeting, I was informed that the University of Iowa and Board of Regents refused to pay the full amount of the settlement, but was told voting ‘no’ on the proposed settlement would force the case to trial and open Iowa taxpayers up to millions more in potential future liabilities,” Smith said.

The State Appeal Board on Monday voted 2-1 to settle the 2020 lawsuit and fund nearly half the payout with taxpayer dollars from the state’s general fund. UI covered the remaining $2.175 million.

State Auditor Rob Sand was the sole vote against the settlement, saying he wouldn’t support using taxpayer dollars so long as UI Athletic Director Gary Barta remained in charge — given UI Athletics has been involved in several other discrimination settlements in recent years.

Both Smith and Department of Management Director Kraig Paulsen voted for the deal, although Smith — like Sand — urged UI to change its athletics leadership and reiterated that call Thursday.

“I applaud President Wilson and the Board of Regents for reversing course and requiring the University of Iowa Athletics Department to cover costs related to the settlement, but I would also renew my call for President Wilson to re-examine the university’s relationship with Mr. Barta,” he said.

Contracts and salaries

UI President Wilson hasn’t answered questions about Barta’s employment and demands from the auditor he be removed. Barta, 59, made $1.2 million in the 2022 budget year and is making an annual base wage of $650,000 through June 2024.

His possible annual bonuses include up to $40,000 if student-athletes achieve academic marks; up to $55,000 if the department achieves operational and financial stewardship goals; and up to $55,000 more for meeting goals established by the UI president.

The deferred compensation package outlined in Barta’s most recent contract extension signed in August 2019 would pay him $1.4 million.

According to his contract, Barta can be terminated for “cause,” including “a serious or prolonged failure to perform the duties”; program violations of NCAA or Big Ten rules; or violation of regent or UI policy “involving dishonesty, moral turpitude or conflict of interest,” among other things.

If terminated for cause, UI would have to give Barta 30 days notice and pay him his base wage through the date of termination. If he’s let go “without cause,” UI would have to pay Barta 24 months of his base wage — or $1.3 million, plus a chunk of his deferred compensation.

UI head football coach Kirk Ferentz made $6.9 million in the 2022 budget year. His son and offensive coordinator Brian Ferentz made $1.1 million that year.

UI Athletics in 2022 generated its most-ever income at $126.8 million — nearly $10 million over budget. It’s expecting even more revenue in the current year: $129 million, including $22.8 million in football income.

Lawmakers respond

Lawmakers on Wednesday introduced House Study Bill 229 mandating Iowa’s public universities reimburse it for costs associated with settlements tied to athletics.

The bill, which lawmakers are continuing to pursue even after Wilson’s statement, would require reimbursement for any award or judgment tied to “conduct or actions of an employee of an athletic department” of a public university. And money used to cover the reimbursement could not come from state appropriations.

After reading Wilson’s statement to lawmakers Thursday in which she committed to reimbursing the state for its portion of the recent $4.2 million settlement, a regents representative noted UI Athletics is self-sustaining and “does not receive any tuition revenue or tax revenue.”

The UI main campus did, however, loan its Athletics Department $50 million in June 2021 to help with COVID-related losses. As of July, 2022, UI Athletics had paid back the campus $3 million.

Rep. Carter Nordman, R-Adel, on Thursday thanked UI President Wilson for committing the reimbursement but indicated taxpayers never should have been billed for any part.

“I’m not sure without the pressure of Iowans and some members in the Legislature if this would have came about,” Nordman said. “I do appreciate the university and their self-evaluation and understanding that taxpayers should not be on the hook for $2 million here.”

Auditor Sand agreed but said Thursday he’s “delighted that president Wilson listened to the concerns that led to my vote against the Barta settlement. I am delighted that she listened to the outcry from taxpayers, who wanted real accountability. And I would like a copy of that check mailed to this room, 111 in the State Capitol Building.”

Ferentz response

Following news of the settlement — which included non-monetary terms like providing tuition support for the 12 players who sued; offering mental health counseling for a year; sending 10 student-athletes ton the annual Black Student Athlete Summit; and hiring a diversity consultant — Kirk Ferentz issued a statement disparaging the deal.

“I am greatly disappointed in how this legal matter was resolved,” Ferentz said in his statement. “The settlement negotiations took place between plaintiff’s counsel and the Iowa Attorney General’s Office, which represents the University of Iowa and the Board of Regents. These discussions took place entirely without the knowledge or consent of the coaches who were named in the lawsuit.

“In fact, the parties originally named disagree with the decision to settle, fully believing that the case would have been dismissed with prejudice before trial.”

Ferentz said his program has been “unfairly and negatively impacted by these allegations” for more than two years.

“Members of the staff had their character and reputation tarnished by former members of our team who said things, then recanted many statements when questioned under oath.”

Vanessa Miller covers higher education for The Gazette.

Comments: (319) 339-3158; vanessa.miller@thegazette.com