Are College Sports Programs Unsustainable?

Oct 27, 2009

Earlier this week, the Knight Commission on Intercollegiate Athletics released a study exploring the perceptions and opinions of university presidents regarding their athletic programs. More than 80% of Football Bowl Subdivision (FBS, formerly known as Division 1A) college presidents participated in the survey, which asked them about the 'challenges, benefits and costs of supporting intercollegiate athletic programs.' Although there was little consensus on a solution, one problem emerged loud and clear: Intercollegiate athletics, especially football, cost too much.

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It's finally autumn - time for colorful leaves, hot cocoa and football. The homecoming season is usually a great one for college sports, but the struggling economy has even managed to cast a pall over college football. The Knight Commission's recent survey of FBS university presidents indicates that even the most successful intercollegiate athletics programs are feeling the strain of high costs and dropping revenue.

Athletic Coach Salaries Are Rising

Source: Knight Commission College Sports 101.

Expenses Are Out of Control

Athletic department spending has risen dramatically over the last several years. A study released this year by the National Collegiate Athletic Association (NCAA) found that operations expenses grew 43% between 2004 and 2008, outpacing the 33% growth in revenue. Trying to identify the cause of this rising deficit, many college presidents in the Knight Commission survey point to coach salaries. Eighty-five percent of the presidents surveyed indicated that they felt that compensation is particularly excessive for football and basketball coaches, and that coach salaries are an expense that is very difficult to control.

College Athletics Operating Deficits Are Rising

Source: Knight Commission College Sports 101.

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Operating Deficits Are Rising

The result of costs outpacing revenue is severe operations deficits. Many people believe that the money that universities pour into their intercollegiate athletics programs is paid back by revenue such as alumni donations and ticket sales from the most popular programs. However, as the NCAA study mentioned, intercollegiate programs actually operate at a loss, relying on governmental and institution subsidies to balance their budgets. Even in the most prosperous NCAA conference, member schools received a median subsidy of $3.4 million. As the graph above indicates, the median net operating deficit for FBS schools has risen over 25% in the past four years.

Unfortunately, the Knight Commission survey reports that university presidents share the popular misconception that successful athletic programs bring in more donations. An equally popular - and equally false - notion among university presidents is that successful athletics programs attract higher quality students. These apparent benefits of athletic spending may be contributing to the reluctance of many university presidents to push for real reform.

Beloved Football Traditions

Seeking a Solution

With costs rising and operations deficits growing, the future of intercollegiate athletics is uncertain. Although 2/3 of the respondents feel that their own programs are sustainable, less than 1/4 think that intercollegiate athletics in their current form are sustainable at FBS schools nationwide. And 48% admitted that the current economic outlook may affect the number of varsity sports that their institutions can support in the future.

Some universities are implementing cost cutting measures in the hopes of easing the financial deficit. These reforms include limits on sports staff hiring, eliminating foreign travel for athletics, reducing the number of staff who travel with the team, banning off-campus hotel stays before home games and restricting website growth. But these measures alone won't reverse the trend, and the Commission found that there is little consensus among college presidents about how to bring about effective change. This may be due to the wide disparity between upper-level and lower-level college athletics budgets, which range from a median of $83 million in the top 12 schools to a median of $14 million in the lowest grouping.

The next step is for universities to seek common ground. As the Commission warns, it will be difficult to make any progress unless presidents are able to unite across schools and agree on the details of reform.

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