College football frenzy is peaking, soon to give way to a crescendo of basketball mania culminating in March Madness. For about 108 of the 128 Football Bowl Subdivision schools, this is a distinctly mixed blessing, as intercollegiate athletics pose a drain on school finances – one that is growing steadily over time.
Schools are in an athletic arms race, feeling the necessity to spend ever more funds on high coaches’ salaries and fancy facilities lest they suffer athletic humiliation and the wrath of irate alumni and fans. According to USA Today data, more than 100 schools currently subsidize intercollegiate athletics by more than $10 million a year. The fact that the University of Florida is spending some $7 million to lure a football coach away from Colorado State shows the financial dimensions of this are huge. It is no wonder that at the recent White House college summit, Vice President Biden blasted schools for elaborate spending on stadium sky boxes.
But as President Ray Watts at the University of Alabama at Birmingham recently showed, it does not have to be that way. He is eliminating the school’s football program.
UAB has been a football power wannabe, playing in the shadows of its superpower state rivals, the University of Alabama at Tuscaloosa and Auburn University, which have won a majority of national championships in the past five years.
Its stadium, Legion Field, which seats almost 72,000 people, has limped along with an average attendance recently of under 15,000 fans per game. UAB takes in about $9 million in revenues from its athletics programs but spends $27 million. That $18 million loss amounts to nearly $1,000 annually for each of UAB’s 19,000 students – the equivalent of about 13 percent of the school’s in-state tuition price. Getting rid of football will eliminate some of that loss, though the school will maintain several other sports. More importantly, perhaps, the school will not have to spend tens of millions on new facilities viewed critical to remaining competitive.
Contrast the UAB experience to Ohio University, where we have some experience. Like UAB, it has a so-so football team (6-6 record) and considers a game with 15,000 attending to be pretty typical, despite its stadium capacity of 24,000. Like UAB, it plays in the shadow of a football powerhouse that regularly draws over 100,000 to its games, currently fourth-ranked Ohio State, playing UAB’s sister school Alabama in the Sugar Bowl.
Like UAB, OU is forced to subsidize intercollegiate sports to the tune of about $18 million a year – again, nearly $1,000 for each of its roughly 20,000 students on the Athens campus (partially disguised as part of a “student activity fee”). Both universities have medical schools. The institutional similarities are striking.
While UAB President Watts is saying “enough is enough,” Ohio President Roderick McDavis is following a more conventional path: let’s spend more to try to break into the ranks of the athletically anointed. Facing similar facility problems as UAB, OU has built a $12.5 million indoor practice facility, primarily for the football team.
It has also announced plans for an “academic center” costing more than $5 million, which will serve as a gated community of sorts where athletes but not ordinary students can study. Ostensibly, an existing study facility and the university’s library are insufficient for the athletes. Similarly, a decade ago the basketball coach made much less than McDavis, but now the coach is paid significantly more than he is.
When former Vanderbilt University President Gordon Gee made the athletic department a unit within the normal university bureaucracy, subject to all of its rules regarding budgeting and staffing, he said that if he tried to do that at Ohio State (where he also was president), he would quickly be pumping gas for a living. University presidents who try to unilaterally disarm athletics face fierce threats to job security that prevent any constructive reform to rein in college costs.
Instead, resources are misappropriated toward sports. Presidents like McDavis spend hours trying to cajole rich donors to help fund new athletic facilities when that money could finance the construction of, say, a much-needed performing arts center or more scholarships for excellent students. The crowding out of academic needs to support sports has come at a high reputational cost – OU has fallen 13 spots in the U.S. News national university listing over the past five years.
Boise State has emerged in recent years as a football power, but compares poorly with the less football-oriented University of Idaho. Despite spending more than twice as much as Idaho on athletics ($43 million versus $19 million), it loses more, and in both the Forbes and U.S. News rankings of colleges, Idaho clearly surpasses Boise. Many university presidents fail to recognize the Iron Law of Sports: when someone wins a game, someone else loses. It is impossible for a large portion of schools to achieve primacy in any given sport.
Economic pressures, however, suggest that other presidents may start biting the bullet and take the UAB route. Total college enrollments are lower today than three years ago, and high costs paired with widespread underemployment of recent college graduates are making students more price-sensitive than in the past. Passing on athletic subsidies to students in the form of higher fees is increasingly unrealistic.
The top 60 or so schools that are genuine athletic powers, about half losing $5 million or less annually on sports, are gaining control of the lucrative commercial aspects of sports through the NCAA athletic cartel. So while Watts might be catching some backlash for his decision to shut down the football program, do not be surprised if this turns out to be a recurring strategy for presidents to control costs in the future.
Additionally, the continued tales of corruption and abuse in sports that stain the reputation of higher education, such as phantom courses at the University of North Carolina, sex abuse at Penn State, and widespread cheating at other schools, should make presidents and trustees more willing to fight to withdraw from the arms race.
There is another model, where sports can be part of college life on an amateur basis without expensive coaches, ESPN television contracts, or athletic scholarships. In fact, this has been a glorious season for a New England town, Cambridge, Massachusetts, where Harvard College had an undefeated football team, and M.I.T. went 10-1, losing only in a national playoff game -- despite spending relatively modest amounts on sports. While neither school makes any list of the top 100 football powers, they are at or near the top of nearly every academic ranking.
Richard Vedder directs the Center for College Affordability and Productivity, and teaches economics at Ohio University, where Joseph Hartge is an undergraduate studying economics in the Honors Tutorial College.
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