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At a time of record student loan debt, the skyrocketing costs of Division I sports play a significant role in threatening the ability of state colleges and universities to offer students an affordable education.
Dozens of Division I public institutions lose between $20 and $40 million annually on sports. Public university athletic departments that lose roughly $40 million per year or more include the Universities of Connecticut, Houston and Massachusetts and James Madison University. And these numbers are based on National Collegiate Athletic Association statistics, provided by the universities, that top economists say can significantly understate the true deficits.
Of course, there has been little pressure on college administrations to seriously combat unnecessary waste in sports. Why? Well, it seems clear that the American public generally, including students, believes that Division I sports make a lot of money.
The bulk of the blame for this astonishing misconception goes to college administrators who fail to produce understandable athletic department financial reports 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 opinion column that appeared here in Inside Higher Ed. He predicted in the piece that various pressures would, for the first time, force universities to “open up their books and give a truthful accounting of their athletics financials.” A statement that does ask the question … what were administrations doing up to this point?
Zeppos goes on to describe “questionable” accounting practices that some universities use in relation to their athletics departments. But the truth is that even taking into account 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 does it take to make up the deficit? The students and their families are often saddled with a per-student annual cost that can be shocking.
Recently, in two op-eds for The Richmond Times-Dispatch, I detailed the stories of two smaller 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 undergraduate students $936 in mandatory fees for intercollegiate athletics for the current academic year, according to a report from the State Council of Higher Education for Virginia. Meanwhile, Longwood, playing Division I despite its small size, collected a mandatory fee of $2,834, just for intercollegiate athletics. James Madison University, a larger Virginia public university that competes in Division I, charges $2,950 annually per student.
How is this possible?
Searching news clips, speeches and/or television appearances, one will find college presidents and athletic directors, when asked about sports expenses, constantly dodging revelations about program deficits by conjuring up a wonderful mishmash of “revenues” and “front porches” and “spirit.”
The leader of a large state university system, in typical fashion, recently was asked by a television interviewer about very specific high coaching salaries. He chose not to answer the question but instead quickly pivoted to comment on the importance of the “revenues” that sports brought in. He failed to note that the system’s flagship athletic program regularly loses about $40 million a year.
For context, Bed Bath & Beyond had substantial revenues, but the darn expenses incurred forced the company to close all its stores and go out of business. No such problem for college sports—you can lose as much as you want and not tell the people paying the bills what is going on.
So, what is the solution?
The first step, of course, is real transparency. College administrations should tell the truth at a time of record student loan debt and unprecedented financial challenge for higher education.
It is the right thing to do.
Give everyone in the university community the real numbers. Athletic department financials can be summarized and clearly explained in just a few pages. Every student and family should have such a report. In addition to the bottom line, it would be helpful to the university community to understand things like, for example, how much each individual team costs.
Next, there must be thoughtful strategies for stakeholder input.
Produce an easy-to-understand financial report; allow some time for analysis by, say, a faculty committee; and perhaps encourage some outside experts to comment. Then hold serious meetings and discussions attended by high-level administrators, faculty representatives, students, parents and indeed all significant elements of the university community. There should also be some role for elected officials, business and opinion leaders, and for the general public.
Of course, with easy-to-understand financial information on the sports budget and a thoughtful exchange of views, it could be the case that students and their families, and others, will conclude that losing $20 to $40 million or more a 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 university community might want to bring some sanity into the process. And should the decision be made to cut waste, well, then waste does need to be attacked, perhaps with a heavy dose of rightsizing.
With transparency, all will understand that the most outrageous overspending we see for football and men’s basketball really matters. And beyond football and basketball, most of the thousands of other Division I teams attract tiny crowds, something I’ve seen firsthand while attending dozens of minor-sport Division I contests since 2019 across many states.
For tennis, I’ve watched quite a few matches at various colleges in recent years and have yet to see more than 15 student attendees show up. (The low was two students, at a state university with more than 25,000 undergraduates.) Yet Division I men’s and women’s tennis teams each cost students hundreds of thousands of dollars annually.
Many minor sports teams play most of their contests at Division I tournaments a plane ride away from their home campus, and some, due to the nature of the sport—for example, golf or cross-country—rarely have a home competition. So there are often zero student attendees, despite the fact that the student body is funding these events and, for Division I, they are quite expensive.
Why should any essentially no-attendee sport be played at what is currently defined as Division I level, with its heavy costs, when it makes so much more sense to hold the competitions at the Division III level? It would save a fortune.
So, there is a path forward to sensibly slashing costs, but it is worth keeping two points in mind.
First, of course young women should have an equal opportunity to participate in college sports. Colleges that play football must balance scholarship slots for women by offering a corresponding number of scholarships for Division I women’s teams. By the same token, however, some women’s teams could play at the Division III level, just as this can and should be done to rightsize some men’s squads.
The second point is that, not surprisingly, there is an outdated NCAA rule that largely prevents movement of teams to Division III (though it’s worth noting that even today waivers are possible). This is the 14-team rule (or 16-team, if a university plays at the highest level of college football). The rule states that in order to participate in Division I—and offer those marquee programs in football or basketball—a college must field 14 (or 16 for universities in the Football Bowl Subdivision) teams at the Division I level. Even if no students attend contests for a particular sport, the maximum amount of money must be spent, say the college representatives that make up the NCAA.
This ridiculous rule should be eliminated, and with the light of day (transparency) it no doubt will be. And, while we're at it, especially now that we are in the transfer portal era, reducing the ridiculous number of scholarships the NCAA allows for football—63 to 85, depending on the subdivision—would make it easier for colleges to balance scholarship opportunities for women without having to field so many expensive Division I teams.
This can be done. The steps are simple. The benefits will be enormous. To borrow a phrase, just do it.
