BY MARTIN KICH

Part 1

To stave off some of the assumptions and accusations that my previous posts on intercollegiate athletics have provoked, I want to make clear that for five decades, I have been an avid fan of college basketball and, although somewhat less enthused about college football, I have tuned into the games on most Saturdays for as long as I can remember. So this post, like the others, is not an attack on the entertainment value of college sports, but it is a reconsideration of the financial realities of “big-time” college sports.

In an earlier post taken from two posts to the blog on the Ohio Conference’s website, there are graphs that show the most recent deficits generated by each athletics program at an Ohio university and the increasing spending on athletics over the past decade and a half.

I emphasized in that post that we have gotten so used to seeing reports about the extent to which revenue generated by instruction subsidizes athletics that looking at the cumulative subsidies to athletics may stimulate a fresh sense of outrage. For instance, the 2019 subsidies multiplied over the next five years would amount, roughly to the following transfers of revenue generated by instruction:

Akron: $125 million

Bowling Green: $70 million

Cincinnati: $150 million

Cleveland State: $50 million

Kent State: $100 million

Miami: $125 million

Ohio U: $100 million

Toledo: $105 million

Wright State: $50 million

Youngstown: $55 million

(For a full list of spending on athletics, please see the summary article at http://www.ncaa.org/about/resources/research/finances-intercollegiate-athletics and the chart at https://sports.usatoday.com/ncaa/finances/. In case the headings are not entirely clear, the last two columns of the chart indicate the amount by which intercollegiate athletics are institutionally subsidized—largely if not entirely from revenues generated by instruction—and the percentage of the athletics budget that such subsidies represent.)

Those estimates are based on the assumption that the subsidies for intercollegiate athletics will not increase, but we already know that there will be massive increases required in 2020-2021 and very likely beyond this academic year.

Ohio State, which very atypically reported about $10 million in deficit spending in 2019, spends the most on intercollegiate athletics of any university, about $220 million in 2019. Unlike Michigan and Oklahoma, which early in the summer announced anticipated deficits of $25 million for 2020-2021—even while assuming that they would play full conference schedules in football, Ohio State has publicly focused more on plans to fill 20 percent of the seats in the Horseshoe and moving the Michigan game to October.

But imagine if the Ohio State football season is cancelled for 2020-2021. How much of the $220 million spent in 2019 on athletics can be cut without undermining a possible full return to athletics in 2021-2022? How much will be subsidized and where will those subsidies be found within a budget that is already being pared, in some places fairly close to the bone?

The universities in the five major conferences do, however, have some possibility of recouping such losses when college football is no longer sidelined by a pandemic. The same thing cannot be said of most of the universities in the five other conferences in the BCS, the schools with dreams of breaking into the “big time.”

When the Big Ten became another of the five major football conferences to announce the cancellation of out-of-conference games, it was a tipping point for one of the five other conferences at the BCS level. For the revenue generated by the games with teams in those conferences accounts for a very high percentage of the actual, relatively limited revenue generated by the MAC teams. On August 8, the MAC announced that it will be cancelling its fall football season.

The focus at our universities is now largely on retreating from the fantasies of re-opening campuses and offering a high percentage of on-site classes in the fall semester. But very quickly the focus is going to shift to how to sustain athletic programs financially when they are not producing almost any revenue to cover almost any of their costs.

Part 2

My post “Why Big-Time College Football Is Likely on the Verge of Becoming Sears” was picked up by some sports sites and generated a great deal of very skeptical comment from fans who sometimes did not seem to understand the economics of intercollegiate athletics. They cannot be blamed for this misunderstanding.

Several years ago, one of the reports on higher education issues produced by the leadership of the Ohio Conference focused on the deficit spending on athletics, and many of the members of the state legislature were genuinely shocked that athletics programs were not only money losers but that they weren’t actually subsidizing instruction.

Several recent studies have shown that even those athletics programs that have generated net revenue have largely recycled that revenue back into athletics—and to be clear, not just to supporting sports that do not generate much revenue but to expanding the physical footprint and the administrative bureaucracy devoted to athletics. At Wright State, where the annual spending on athletics is $11-$12 million, about a third of the costs are related to student scholarships and academic and medical support, about a third are related to coaches’ salaries and equipment and travel expenses, and about a third are related to administrative overhead. In effect, even at a school with relatively modest athletics programs, the skewed spending model for the institution as a whole has been roughly replicated in athletics.

Even at the 50-60 universities where football and, in some instances, basketball produce revenues of more than $100 million, only 1-1.5% of those revenues are returned to the general funds of the universities. (See this online article, which highlights the key points in and links to a longer article in the Chronicle of Higher Education: https://thecomeback.com/ncaa/less-than-1-in-every-100-of-public-athletic-departments-revenue-goes-to-academics-only-10-schools-gave-on-balance.html.)

Likewise, successful teams do generate a great deal of positive media attention. But, it is, at best an unproven and, at worst, a very contested contention that student enrollment is linked to the success of a university’s athletic programs: that is, the level of success may determine where a talented high school athlete chooses to accept a scholarship, but there is no evidence that it influences where the typical student chooses to enroll. They may even greatly enjoy attending the games on campus, but, at best, they are seldom enrolling in order to attend them.

During our last lengthy contract impasse, our chapter disseminated a graph that shows the results of an extensive survey of college students on what influences their enrollment decisions. Athletics programs are simply not a factor for most students, except for student-athletes.

The desperation to justify athletics spending on the basis of its broader impact on enrollment has become something of a ludicrous enterprise but nonetheless a substantial and profitable industry.

About every ten years, the basketball team at Wright State secures a spot in the NCAA Men’s Basketball Tournament. The team’s run is then very abbreviated because it is always a 16th or, at best, a 15th seed and doomed to be blown out in its first game by one of the top seeds. Still, I am sure that it is an experience that our athletes will remember for the rest of their lives—and, given the size and history of our basketball program, it is an accomplishment worth celebrating.

But, in the most recent instance, the university administration was very quick to announce that the team’s most recent tournament appearance had generated $25 million in free advertising. Someone apparently provides institutions with a count of the column inches of press coverage of the tournament field and of the game in which the team participated. (I am not sure if they also include each subsequent article that includes the score of that game or some other passing mention of it.)

The efficacy of such calculation is, however, all too easy to undercut. For our enrollment has been gradually declining, and the next year after that NCAA Tournament appearance, it continued to decline at roughly the rate that it had been previously declining.

The lack of substantive impact extends to our alumni.

When our chapter recently investigated alumni giving, we discovered that giving related to each of the individual colleges exceeded—and in a number of instances, very considerably exceeded—giving related to athletics.

Perhaps that is not the case at Ohio State and universities with comparable athletic programs. But I am also guessing that the numbers are not as lopsided in the other direction as one might guess.

Part 3

An article by Rich Exner for Cleveland.com includes the following chart, which has been widely shared and much discussed:

Degree-completion rates are calculated at six years after initial enrollment, but let’s say that the average student were to complete a degree in four years. The total subsidy per student at each institution would be as follows;

Wright State: $2,868

Ohio U: $2,876

Kent State: $3,076

Cleveland State: $3,380

Bowling Green: $3,488

Cincinnati: $3,776

Youngstown State: $4,112

Toledo: $4,540

Miami: $5,308

Akron: $5,436

Measured against the annual tuition charged by institution, these subsidies amount to the following percentages of those tuition costs:

Akron: 12%

Toledo: 11%

Youngstown: 11%

Cincinnati: 9%

Miami: 9%

Bowling Green: 8%

Cleveland State: 8%

Wright State: 8%

Kent State: 7%

Ohio U: 6%

[These percentages are taken from a slide in the Powerpoint by narrated Noeleen McIlvenna and compiled from data gathered by a committee of our chapter members. It was previously posted on this blog and is available at https://academeblog.org/2020/05/25/addressing-the-arguments-for-spending-on-athletics/.]

All of this data should be cause for concern—especially since 80%-85% of the cost of an education at these universities is now being borne by students. To be very conservative, let’s say that only 50% of the cost is being financed by student loans. That means that 12%-24% of the average student debt has gone essentially to institutional subsidies of intercollegiate athletics.

But of course, that debt is not simple a straightforward annual amount that can be multiplied by the number of years that it takes to complete a degree.

Again, to be very conservative, let’s say that the average student pays off his or her loans over 15 years, with a 7% annually compounded interest rate. (In 2017, the Department of Education reported that the average debt per student at public universities was $26,900 and that the average time taken to pay off that debt was 21.1 years. The 7% interest is a rough average of the variable and fixed rates now available through Sallie Mae.)

The totals per student at each institution are then as follows:

Wright State: $4,640

Ohio U: $4,653

Kent State: $4,976

Cleveland State: $5,468

Bowling Green: $5,643

Cincinnati: $6,109

Youngstown State: $6,652

Toledo: $7,345

Miami: $8,587

Akron: $8,794

The point of these calculations and tables is not to rank or to stigmatize these particular institutions, but, instead, to illustrate through this narrow sample that many of those who complain about the ROI for certain degrees–in the humanities and social sciences, in particular–are also among the most determined defenders of the deficit spending on intercollegiate athletics and the most likely apologists for a whole range of other things besides instruction to which sizable percentages of tuition revenue—and, ultimately, student debt–are being directed.

In my recent post on the crisis at Akron, I focused on the ways in which the phrasing “running the university as a business” has been used to justify and then to deflect attention from very poor business practices.

To close this post, I would like to suggest that just as it is maddening that one actually has to argue that a pandemic is a national crisis and a grossly mishandled pandemic is a compounded crisis, it is maddening that one has to argue that if instruction is the most central element of a university’s mission, then allocating revenue to things other than instruction and at the expense of instruction is simply not justifiable—that it is not any more rational than asserting that something as simple as having to wear a mask in the midst of a pandemic is an egregious infringement on one’s fundamental personal liberties.

At some point, more rational perspectives do need to prevail.