Photo credit: https://www.flickr.com/photos/leeadlaf/

Photo credit: https://www.flickr.com/photos/leeadlaf/

by Vince Nicastro*

Changes in the Intercollegiate Athletics Landscape

The college athletics landscape continues to be tumultuous.  As intense pressure from various legal challenges mounts, the Division I membership has attempted to fire some preemptive strikes toward making changes that might otherwise be forced upon them through the litigation.  Ultimately, there could be a fundamental change in structure coming, with the bedrock principle of amateurism being redefined or entirely removed from the equation.

The recent rule changes relating to unlimited meals, extending the scholarship to include full cost of attendance, and some other more flexible policies geared toward providing more resources to student-athletes has stretched the budgets of even the most well-heeled athletics departments.  And more are on the way.

The possibility of moving toward a free market system where college athletes are compensated at their market value is more tangible than ever before.  Couple that with related consequences of an employer/employee relationship and a possible unionized environment, and the potential for fundamental structural changes to the intercollegiate financial model is a real possibility.

Cost Pressures Across Higher Education

Along with the changes that allow more resources to be directed toward student-athletes, is an increasingly ultracompetitive environment, particularly in the elite levels of college football and basketball.  The stakes are higher than ever for schools in this arena.  High risk, high reward.

Salaries in major college football and basketball generally make up a substantial portion of an athletic department budget and have been increasing at a rate well above the norm.  Coaches are just one part of the growing arms race – investments in facilities, support staff, operations, etc. have also been ramped up in attempts to gain an edge, or simply to keep up with the Joneses (or the Sabans).

This increasing investment trend in athletics (driven by football and basketball programs) is now intersecting with mounting financial pressures across higher education.  Colleges and universities all over the country are faced with intense scrutiny regarding their traditional business model.  The cost of an education is a primary focus for prospective students and their families, as well as legislators and politicians.  State schools are continuing to experience substantial reductions in taxpayer funding, while tuition dependent private schools are struggling to meet admission and revenue targets.   These fundamental changes are prompting schools across the country to comprehensively review their operations and programming, and make difficult choices, to alleviate the cost pressures.

A Tipping Point

Eventually, something will have to give.  More discussions than ever regarding the role of Olympic or non-revenue sports are occurring at many schools around the country.  You can be certain that even schools amongst the Power 5 conferences are conducting assessments of their portfolio of sports and weighing potential changes – particularly if seismic shifts in the industry materialize as a result of the lawsuits or self-governance.

Where do football and basketball fit into this discussion?   File them under “too big to fail.”  Despite obviously being the largest investments in an athletic program (some would argue ostentatious) these sports are generally deemed too important to eliminate or otherwise scale back.  The argument suggests that these revenue generators provide not only critical financial resources and national exposure, but offer emotional connection points to students, alumni, and fans.

One recent example of this – the difficult choices that Temple University recently made to eliminate several non-revenue sports, while effectively “doubling down” in football.  As Temple is in the midst of a historic year in football, the short-term results are looking quite positive for them.  Time will tell if their long term objective is achievable and sustainable.

Late last year, the University of Alabama-Birmingham (UAB) leadership faced a similar situation regarding their financial investment in athletics.  After a formal evaluation, they decided to drop their football program, along with a couple of non-revenue sports.  Remarkably, UAB President Ray Watts actually received a vote of “no confidence” from the school’s faculty after making the decision, providing strong evidence as to how culturally important the sport of football is in certain parts of the country.  Ultimately, UAB reversed course and announced the reinstatement of the football program a few months later (along with the two non-revenue programs).

Consequences and Impact

The impact of the elimination of non-revenue programs can sometimes be difficult to assess.  In many cases, the financial savings are relatively insignificant.  However, the qualitative (read emotional) effect it may have on things like the student experience, educational access and opportunities, and long term psychological attachment to schools is difficult to measure – but maybe no less important than the budgetary impact.  And, there are many examples of presidents and athletic directors having their leadership (and sometimes their careers) distracted or derailed as a result.

Oh, and let us not forget the original intended purpose of intercollegiate sports – the educational and developmental value to students who are engaged in competitive athletics.  It seems that these values aren’t always factored into the equation as much as you might suspect.  Where does that leave students who wish to learn critical skills – leadership development, the value of hard work, goal setting, overcoming adversity, sportsmanship, teamwork – through sport?

Extending the consequences even further down the line, it isn’t out of the realm of possibility that a rash of Olympic sport reductions on college campuses could have an impact on future U.S. Olympic/international competition.  Colleges serve as important training grounds in many sports – with terrific coaches, excellent facilities, and high level competition.  Per a recent USA Today article, 62% of the 533 athletes who competed for the United States in the 2012 summer games participated in NCAA sports.  With those opportunities reduced, it would be interesting to see how that void would be filled and how it may impact the US Olympic and international training programs and their governing bodies moving forward.

More than ever, the drumbeat of eliminating programs is being heard throughout Division I.  Higher education and college athletics appear to be coming to a critical juncture, where fundamental structural changes are potentially taking place for both.  University leaders are faced with extremely tough decisions, as it is often difficult to measure the qualitative and emotional impact they have on their institutions – and possibly on the United States’ international and Olympic programs.


* Vince Nicastro is the former Athletic Director for Villanova University, and currently serves as Associate Director for the Jeffrey S. Moorad Center for the Study of Sports Law.

 

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