How Do You Solve a Problem Like College Athletics?

The writer is a current president.

Even before the House settlement and direct payment of athletics began, expenses were rising much more quickly than inflation and faster than the increases in revenue being generated.

At Division I schools outside the Power 4 conferences, the more revenue generated by an athletic department, the larger the net loss. In other words, the more you make, the more you lose. And these losses are large. In fiscal year 2024, the typical losses (athletics-generated revenue minus athletics costs) were typically about $15 million to $30 million across Division I college athletics.

I am often asked why university leaders do not simply stop spending so much, which always leads to a long discussion on the challenges of unilateral disarmament in an environment with few rewards (only one university can win the conference championship, and all desperately want to) and expectations from many supporters that universities should spend as much as necessary to get that reward.

I also note we have been waiting for over 100 years across thousands of university leaders for this to occur, and given it has not happened yet, it is not likely to happen in the future. We clearly need a system solution, not an individual university solution.

The problem facing universities is this is coming at a time when they are also facing increasing fiscal challenges beyond athletics. Due to the combination of decreasing state funding, declining enrollment, and reduced revenue per student because of greater tuition discounting, most institutions are not in the strong budget position they were when I started working in higher education.

Moreover, several new challenges have emerged in the last year that will only add to these fiscal concerns. It is not surprising there are frequent reports of institutions having to make significant budget reductions or that many have faced challenges so large that they had to close.

Given all this, it is clear most institutions do not have the same ability to cover athletics losses the way they did decades ago, when institutions were in a much better fiscal position and athletics losses were smaller.

After the House settlement, I have seen several opinion pieces on possible ways to change college athletics. I have also been monitoring proposed federal legislation. However, as someone who studies this area, I do not see any of these solving the larger problem: We have a system that is no longer financially sustainable for most institutions.

The solutions being suggested focus on taking the traditional system, holding on to as much of that as possible while making the legally required changes, and then either placing some limit on how much the expenses will grow or adding some additional revenue. While many of these solutions are well-intentioned, I believe they are all likely to fail.

What would happen if we gathered people who had experience and were asked to design a sustainable college athletics model? They would be encouraged to think boldly and creatively and to avoid the trap of “that is how we have always done it.” They could develop a sustainable model that would work for the universities of the 21st century. I believe anything less than that will simply result in tinkering with the current system in a way that just kicks the can down the road—a road that is getting shorter each year.