News outlets all across the country are reporting the recent findings of the Knight Commission report entitled College Sports 101 released earlier last week with regard to intercollegiate sports program costs. The alarming results have led many to believe that college sports as we know them, namely college football, may be in extremis, and there is no quick solution in sight.
According to the report, labor costs for intercollegiate sports are fixed and work as somewhat of a self-governing entity, reporting to central administrators within the universities. Though median budgets for university sports programs sit at around $40 million, there is an extensive difference between top spending universities ($83 million) and and lowest spending universities ($14 million).
Athletic programs are seeing the highest percentage of spending going towards salaries and benefits, namely coach salaries. The rest of the expenses are broken down fairly evenly between tuition, scholarships, facilities, travel and recruiting, equipment, fundraising, medical and other miscellaneous costs.
The problem that universities are encountering is the fast growing rate of spending.
In 2009, the National Collegiate Athletic Association published a report that found median operating spending for athletics increased 43 percent between 2004 and 2008, but median revenue generated by athletics programs grew only 33 percent over the same time period (Fulks, 2008). In another telltale spending reality a few years earlier, the NCAA reported in 2005 that athletic expenses rose as much as four times faster than overall institutional spending between 2001 and 2003 (Orszag & Orszag, 2005). (Knight Commission, 2009)
The median net revenue for one leagues member athletic departments was negative $7.2 million; for another it was negative $10.4 million. For the former, its red ink had grown by 44 percent since 2005. (Knight Commission, 2009)
Despite these outrageous deficits, top athletic programs are paying salaries in the millions. In fact, some of the most unnecessary spending is seemingly stemming from the whopping salaries some of these big-ten universities are paying out to high profile coaches. I was appalled to read that the University of Kentucky paid a men’s basketball coach from the University of Memphis $2.5 million in addition to several luxury automobiles, a country club membership and $200,000 to break his Memphis contract.
The University of Alabama has also been reported to have paid $6.6 million toward the salaries of the head football coach and his nine assistants. This amount is more than “32 bowl-subdivision programs spend on football as a whole, according to an analysis by the Orlando Sentinel.” (Limon, 2009)._ (Knight Commission, 2009)
If spending and large deficits continue, college presidents are concerned that there will not be enough financial power to keep them sustained. The only minimal solution college presidents are discussing is to cut costs in international team travel, hotel stays and other lower scale expenditures. No other solution is in sight. The future for colleges sports is grim indeed.
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