At a time when student debt is at an all-time high, the skyrocketing costs of Division I sports play a significant role in threatening the ability of state colleges and universities to provide students with an affordable education.
Dozens Public Division I institutions lose between $20 million and $40 million per year on sports. Public university athletic departments losing about $40 million a year or more include the Universities of Connecticut, Houston and Massachusetts as well as James Madison University. And those numbers are based on college-provided National Collegiate Athletic Association statistics that top economists say can dramatically improve the situation. underestimate the real deficits.
Of course, little pressure has been placed on university administrations to seriously address unnecessary waste in sports. For what? Well, it seems clear that the general American public, including college students, believes that Division I sports make a lot of money.
Most of the blame for this astonishing misconception lies with college administrators who fail to produce comprehensible financial reports from athletic departments and who indeed often seem to imply in their public statements that sports are profitable.
In April 2021, Nicholas Zeppos, chancellor emeritus and professor emeritus of law and political science at Vanderbilt University, wrote a remarkable article: opinion column which appeared here in Inside higher education. He predicted in his article that various pressures would force, for the first time, universities to “open their books and report truthfully on their sports finances.” A statement that asks the question… what have administrations been doing up until now?
Zeppos goes on to describe “questionable” accounting practices that some universities use in relation to their athletic departments. But the truth is that even accounting for accounting shenanigans, fewer than 10 percent of Division I athletic programs at public universities break even, according to numbers the universities themselves provide to the NCAA.
What is needed to close the deficit? Students and their families often face an annual cost per student that can be shocking.
Recently, in two opinion articles For The Richmond Times-DispatchI detailed the histories of two small state universities in Virginia. The University of Mary Washington and Longwood University are virtually identical in size. Mary Washington chooses to play in Division III and charges its undergraduates $936 in mandatory fees for intercollegiate athletics for the current academic year, according to a report of the Virginia State Council of Higher Education. Meanwhile, Longwood, playing in Division I despite its small size, collected a mandatory fee of $2,834, just for intercollegiate athletics. James Madison University, a larger public university in Virginia that competes in Division I, charges $2,950 per year per student.
How is this possible?
Searching for news clips, speeches, and/or television appearances, one will find college presidents and athletic directors, when asked about athletic spending, consistently avoiding revelations about program deficits by conjuring up a marvelous hodgepodge of “revenue,” “porches,” and “mind.”
The leader of a large state university system, in typical fashion, was recently asked by a television interviewer on the high and very specific salaries of coaches. He chose not to answer the question, but quickly commented on the importance of “revenue” generated by the sport. He failed to note that the system’s flagship sports program regularly loses about $40 million a year.
As a reminder, Bed Bath & Beyond made substantial revenues, but the expenses incurred forced the company to close all of its stores and go out of business. This isn’t a problem for college sports: you can lose as much as you want without telling the people who pay the bills what’s going on.
So what is the solution?
The first step, of course, is true transparency. College administrations should tell the truth at a time when student debt is at an all-time high and higher education faces an unprecedented financial challenge.
It’s the right thing to do.
Give everyone in the university community the real numbers. The athletic department’s finances can be summarized and clearly explained in just a few pages. Every student and every family should have such a report. In addition to financial results, it would be helpful for the university community to understand things like, for example, how much each team costs.
Next, there must be thoughtful strategies for stakeholder input.
Produce an easy-to-understand financial report; allow time for analysis, for example by a faculty committee; and perhaps encourage some outside experts to comment. Then organize meaningful meetings and discussions involving high-level administrators, faculty representatives, students, parents and of course all important elements of the university community. Elected officials, business and opinion leaders, and the general public should also play some role.
Of course, with easy-to-understand financial information about the athletic budget and a thoughtful exchange of views, it may be that students and their families, and others, conclude that losing $20 to $40 million or more per year on athletics is just fine. Go ahead and pile it on the student loan bill!
Alternatively, it is also possible that with transparency, the academic community wants to bring some common sense to the process. And if the decision is made to reduce waste, well, then waste will have to be addressed, perhaps with a heavy dose of right-sizing.
With transparency, everyone will understand that the most outrageous overspending we see in football and men’s basketball really matters. And beyond football and basketball, most of the thousands of other Division I teams draw small crowds, something I’ve seen while attending dozens of minor Division I sports competitions since 2019 in many states.
For tennis, I have watched quite a few matches at various colleges over the last few years and have yet to see more than 15 students show up. (The minimum was two students, at a state university with more than 25,000 undergraduates.) Yet the Division I men’s and women’s tennis teams each cost students hundreds of thousands of dollars a year.
Many minor sports teams play most of their competition in Division I tournaments just a plane ride from their home campus, and some, due to the nature of the sport (e.g. golf or cross country), rarely host a home competition. So there are often no students participating, despite the fact that the student body funds these events and, for Division I, they are quite expensive.
Why should an essentially non-participation sport be played at what is currently defined as the Division I level, with its high costs, when it makes far more sense to hold competitions at the Division III level? This would save a fortune.
So there is a path forward to significantly reduce costs, but two points should be kept in mind.
First, of course, young women should have equal opportunities to participate in college sports. Colleges that play football must balance scholarships for women by offering a corresponding number of scholarships to Division I women’s teams. Likewise, however, some women’s teams could play at the Division III level, just as can and should be done to rightsize some men’s teams.
The second point is that, unsurprisingly, there is an outdated NCAA rule that largely prevents the movement of teams into Division III (although it should be noted that even today, waivers are possible). It is the 14 team rule (or 16 teams, if a university plays at the highest level of college football). The rule states that to compete in Division I and offer these marquee programs in football or basketball, a college must field 14 (or 16 for Football Bowl Subdivision universities) teams at the Division I level. Even if no students compete in a particular sport, the maximum amount must be spent, say representatives of the colleges that make up the NCAA.
This ridiculous rule should be removed, and with daylight (transparency) it probably will be. And while we’re at it, especially now that we’re in the transfer portal At the time, reducing the ridiculous number of scholarships awarded by the NCAA for football — from 63 to 85, depending on the subdivision — would make it easier for universities to balance scholarship opportunities for women without having to field so many expensive Division I teams.
It can be done. The steps are simple. The benefits will be enormous. To borrow a phrase, do it.
