Following is the text of NCAA President Cedric W. Dempsey's State of the Association address delivered during the January 7 opening business session at the 2001 NCAA Convention.

Charles Dickens began his novel "A Tale of Two Cities" with these now-famous words:

"It was the best of times, it was the worst of times -- it was the age of wisdom, it was the age of foolishness..."

As we begin the first century of the new millennium, there are some who would argue that those words fairly describe the state of this Association in January 2001.

A little more than a year ago, we signed a minimum $6 billion television and marketing contract that will assure continued championships, student-athlete support programs and other services well into the next decade.

Right now, we're offering more championship opportunities than ever before, and when this academic year is over, more than 42,000 student-athletes will have competed for the title of national collegiate champion. That figure has nearly doubled in the last decade. In fact, we're very close to providing an equal number of opportunities for both men and women.

Across all three divisions, we're graduating student-athletes at a higher rate than the rest of the student body.

We've recognized that one style of governance does not fit all and have federated in a way that allows each division to address its issues in a distinctly unique way. At the same time we retain an umbrella structure that approaches Association-wide issues with a united front.

Indeed, intercollegiate athletics programs have helped campuses attract new students, new revenue sources, new facilities -- and some would even say a new status as an institution of higher education.

Surely then, this must be the best of times in an age of wisdom. In fact, I would venture to guess that some college presidents and athletics directors would say they never had it so good.

And yet, as a collective enterprise, critics and even our enlightened supporters would suggest that the times are fraught with issues, problems, contradictions and complexities that threaten to undermine college sports. There are those who would argue that the entire endeavor may soon simply implode -- and cave in on itself.

Clearly, the rising revenues on most campuses have been overwhelmed by even higher costs. At the more than 970 NCAA member schools, we are bringing in just over $3 billion a year, but we are spending $4.1 billion in that same period.

Pressure to keep up with the Joneses and truly be competitive has pushed many athletics programs -- and their institutions -- into great debt.

While graduation rates for student-athletes as a whole are at an all-time high, football and men's basketball participants are not keeping pace.

We have made real progress at providing equitable opportunities for women to participate. Sometimes that progress has been at the expense of male student-athletes who want to compete, but who have had their programs pulled out from under them.

We have regulated ourselves into paralysis. We no longer seem able to stop ourselves from abusing the spirit of sport and instead rely on legislation to keep us in check.

While salaries for coaches in Division I football and men's basketball have reached levels difficult to defend, many of our other programs have been relegated to the leadership of part-time or volunteer coaches.

We recruit student-athletes, hire coaches and make decisions for the short term without much analysis of how those behaviors might shape the future.

Indeed, there's plenty of evidence for critics of college sports to argue that these are the worst of times in an age of foolishness.

So then, who's right? As we sit here today, what is the state of college athletics?

Well, we're truly blessed with great good fortune. But there are plenty of real issues to which we must attend. I'm going to touch on four issues this afternoon that will occupy my personal attention over the next couple of years.

First, football and basketball issues, which I will treat as one objective.

Second, amateurism deregulation.

Third, the financial health of our programs.

And fourth, the education of our prime stakeholders.

First, let me give you an update on plans for a comprehensive football issues study in Division I. At its November meeting, the Board of Directors approved this study. It also appointed a small group to set the protocol for the study and determine who would be on the committee making the study.

As all of you know, I've pushed for this study and there has been considerable disagreement over whether it should be done at all. To help settle some fears, let me tell you what won't be included in the review. It will not explore a postseason championship in Division I-A, and it will not examine how current postseason bowl revenues in I-A are distributed.

At no time during the discussion of this study have I suggested it should include consideration of a I-A playoff. Frankly, I've spoken on that topic in the past, but the Board has been clear that it doesn't want to discuss a playoff and I don't intend to bring it up again.

However, I do believe football deserves the same comprehensive review that basketball has undertaken. We need to examine the basis upon which membership criteria are established among the subdivisions. Not only is this important with regard to how programs are structured, it is equally important with regard to how Division I governance is structured.

We need to look at declining graduation rates in football with the same educational scrutiny that we've given to basketball. The graduation rates in Division I-A fell three percentage points in the last year and fell eight percentage points in the last five years. What incentives can we bring to bear to improve those rates?

We need to review and examine the costs associated with football. The latest revenues and expenses research tells us that football, more than any other sport, may be the major factor that widens the gap between the "haves" and the "have-nots."

As you know, football is the sport responsible for creation of the NCAA and, to a great extent, it's the sport that shaped the perception of the college campus. As one of the two sports that help finance all other Division I athletics programs, this Association must pay attention to it.

Basketball -- the other half of this first initiative -- underwent a similar study two years ago. From that study has come legislation to address specific concerns about graduation rates, sports wagering and recruiting.

This is a very complex issue, and it's one that isn't likely to respond only to regulatory efforts. In the long run, education may be the real key to success.

We have to make sure that every time prospects come together at a summer camp or tournament, there is powerful and engaging communication about making good choices, about how young people can be exploited, about the value of a college degree, and about what a day in the life of a student-athlete is going to be like.

We need a strong mentoring program that identifies future prospects at an early age, puts them in touch and keeps them in touch with people who will guide them without an interest in where they go to college and what their future salaries might be.

We need to get NCAA coaches involved at an earlier point in the lives of these prospects -- not just to assess the potential for successfully recruiting them, but to be a source of information and guidance. We need every coach to be a mentor, teacher, counselor and confidant.

Right now, these efforts are handicapped with obstacles and concerns about recruiting advantages and distrust among coaches. That is our real nemesis. One of our biggest tests will be whether we can set aside our distrust and suspicions and act only in the best interests of prospective student-athletes.

"Acting in the best interests" of these young people is also central to the second initiative I want to touch on today -- amateurism deregulation.

For the last three years, committees within the governance structure in both Divisions I and II have been working on deregulation of the Association's amateurism rules. Division II will vote on Proposal No. 12 during tomorrow's business session. The Division I Management Council has sent a similar legislative package to its membership for comment, and that division will have a chance to discuss the package during tomorrow's forum. Division III is beginning to make the same examination for its member schools.

Before I go further, allow me to publicly thank the chairs of the two committees that have worked so hard on this particular deregulation effort. Carol Dunn in Division II, Christine Grant in Division I -- and their colleagues -- have been real pioneers in plowing ground that largely has been untouched for more than a century. Please join me in acknowledging their work.

The prognosis for passage in Division II is favorable -- the outcome is not so clear in Division I. And this won't be the first time Division II has led the way with deregulation. In fact, that division has made greater strides over the last few years in trimming the vines from our bureaucratic tangle. Division II should be applauded for those efforts.

To be fair, not all circumstances are the same among the three divisions. That, of course, is the reason we've federated our governance structure. Members of each division must give open, purposeful and specific consideration of proposals as they arise.

But let me say this: This particular deregulation effort has come about because you have identified what you consider to be injustices in the current legislation. You've asked for special treatment for individuals who by rule are no longer amateurs, but who by intent clearly abide by the spirit of amateurism. And many of those requests have been granted.

You've suggested that intercollegiate athletics should be less concerned about what student-athletes do before they enroll than after matriculation. You've even agreed that becoming a professional in one sport doesn't professionalize an individual in all sports. In short, you have said that our amateurism rules are imperfect.

Well, it isn't likely we are going to get them perfect. It isn't likely that any deregulation package is going to be the perfect solution, but this package includes a number of accommodations for specific sports that have been brought to the attention of the subcommittee.

We can all agree, however, that the current system needs to be fixed, and I believe that the proposed deregulation package in Divisions I and II is the best solution I have seen so far.

And I will tell you that we shouldn't forgo making progress because of a distrusting unwillingness to accept less than the perfect solution. We should approve the pre-enrollment proposals in Division II tomorrow, and I see no reason why Division I shouldn't do the same later this year.

I understand that the answer for Division I may be to let Division II lead the way. Or, the answer for Division I may be to incrementally make deregulation progress with our amateurism rules.

And, perhaps, Division I will make no changes at all.

If that is the case, I suggest we should reconsider the inconsistent eligibility reinstatement standards we have today. We get conflicting messages from our members who want us to bend the rules on one hand, while maintaining a rigid -- and perhaps archaic -- definition of "cradle-to-grave amateurism" on the other. More to the point, why should we continue to reinstate student-athletes for exactly the same set of circumstances that we are unwilling to correct through deregulation?

I'm not suggesting that we abandon principles -- but I do suggest that we either live by them all the time or adjust them for the times.

The third initiative I want to address is our obligation as fiscal stewards. If there is one single place where Dickens' words ring true for college sports, it's here. According to the latest research on revenues and expenses in Divisions I and II, these are the best of times and the worst of times.

The number of programs in Division I-A, for example, where revenues exceed expenses without institutional support grew from 43 schools to 48 schools from 1997 to 1999. But the relative success of those few is enormously greater. Profits for those institutions more than doubled, increasing by 124 percent from $1.7 million to $3.8 million on average, but deficits for the remaining schools also increased by nearly 18 percent. And in the rest of Division I and all of Division II, expenses continued to outpace revenues.

And as I mentioned at the beginning, if you look at all three divisions, the difference between expenses and revenues is a little more than $1 billion. That's right, $1 billion.

The tough question, of course, is how much longer institutional funds can support increasing deficits. How many new revenue streams can we develop to cover the difference, and what will be the cost of these new funds to our institutional integrity? The level of cynicism over the commercialization of our most visible athletics programs has reached epidemic proportions -- especially among those constituents we value most, our student-athletes.

Our efforts at controlling costs have consistently been overwhelmed before we even get started. And legal challenges that rightly protect individual freedom have relegated organization-wide efforts to the insignificant.

What is the solution?

We need to engage all of higher education to design a new model for financial management. I'm going to call on the Knight Commission and other higher education organizations to help us study our practices and help find new approaches.

A modest start for Division I may be a change in the philosophy that since 1978 has expected athletics programs to be self-sustaining. Not only has the philosophy been less than effective, it's had the psychological effect of pushing accountability for the athletics programs away from campus scrutiny -- exactly the opposite of what we hoped to accomplish.

The result is that too many athletics administrators are walking a financial high-wire with no net as they try to balance the books. We may very well be setting ourselves up for a huge financial fall unless we find a way to control our costs.

The final initiative I want to discuss is one I believe is essential if we are going to live up to our mission. We must engage in an unprecedented educational effort that protects the mission of higher education and the welfare of student-athletes as our top priorities.

You know in August, at the conclusion of the first day of testimony before the reconvened Knight Commission, one of its members noted that we probably have gone about as far as we can reforming college sports through legislation. "Now," he said, "we have to address the culture."

I believe he's right, and I believe the answer is a strong educational program for our primary stakeholders.

The framework is in place for university CEOs and governing boards to set an agenda for intercollegiate athletics that puts education first, not winning first -- one that puts managing costs on par with generating revenue, that sets recruiting standards to achieve academic success, not just athletics success, and that understands the value of a diverse staff more than a color and gender scheme that perpetuates the status quo.

The regulatory framework is in place. So what's missing?

Today, I'm not sure we know what our mission is in intercollegiate athletics. If I asked you to recite the mission or the 16 principles of the Association, I doubt you could do it, and I'm not sure I could, either.

Gen. Palmer A. Pierce, superintendent of the U.S. Military Academy and the first and longtime president of the NCAA, used to open this Convention each and every year by reciting those principles and purposes to the delegates. Every year, he would read the 16 principles.

I think he was on to something. I think he understood, that left to our own devices, we tend to redefine principles according to what works best for individual programs on individual campuses. Perhaps he understood that we need to re-educate ourselves annually to those things we must hold common among us if we are to preserve a culture that ties this enterprise to the classroom and the student.

In the next few months, I will set forth a plan to educate institutional chief executive officers, members of governing boards, faculty, directors of athletics, senior woman administrators, conference commissioners, coaches and student-athletes. The curriculum will focus on ethics, academic integrity and the philosophy of intercollegiate sport.

Success will be a change in culture that reassesses the goals and priorities of athletics personnel, that realigns them with a standard set of principles, and then -- and this is the most important element -- bases performance evaluations on these new goals.

I'm committed to this effort. Again, I'm going to call on higher education organizations, the Knight Commission, the governance bodies in all three divisions and each of you personally to assist in this initiative.

This may be the most important thing we do in intercollegiate athletics as we approach the centennial of this Association in 2006 and prepare for our second century. If we asked the general public -- those who support higher education and college sports -- about those 16 principles, they couldn't recite them, either. But they intuitively know that in too many instances we're missing the mark.

In 1930, Yale University President James R. Angell presented to the NCAA Convention what he called his "Creed on Athletics Issues."

In his closing comments, he told the delegates this:

"I do not believe that collegiate relationships are, or can be, bettered by intercollegiate athletics unless these are conducted with complete mutual respect and confidence on the part of participating institutions."

He said, "The distrust that now too often (occurs) is altogether poisonous and intolerable, and, if generally justified, would be a fatal indictment of such athletics as now conducted."

That was in 1930. Seventy-one years later, Angell's words still apply.

We must trust one another, but first we must be trustworthy. That's our challenge. We must prove ourselves trustworthy to the public, the media, our institutions and, most important, to our student-athletes.

Success in intercollegiate athletics is up to us. Will this be the age of wisdom or the age of foolishness? Will we take full advantage of the best of times to assure that we are never faced with only the worst of times?

The task before us, then, is to examine our culture, our principles, our values, our processes -- to align them with what we and our public know to be our mission -- and then find the discipline and the strong heart to achieve success based on the only thing that matters -- the total development of student-athletes.

In closing, let me say this: I have spoken with you today with great candor, and I know I raised issues not comfortably discussed, but I do so with great trust and great confidence, that together with our collective wisdom, we truly can make these times the best of times.