NCAA President Myles Brand called for institutional accountability in athletics budgets and more attention to integrating intercollegiate athletics within the campus environment during a speech to the National Press Club October 30 in Washington, D.C.

Brand’s remarks christened the new report from the Presidential Task Force on the Future of Division I Intercollegiate Athletics, a 50-member panel Brand appointed 18 months ago to address fiscal trends that, if left unchecked, could "islandize" athletics from the campus-based educational mission.

"There is no fiscal crisis currently in intercollegiate athletics, and there may never be one. But there is clearly stress in the system, and the stress is almost certain to increase without corrective action," Brand said. "The pressure on universities for new expectations, rising costs of instruction and program growth, and meeting the access needs of low-income students will mean fewer and fewer dollars to help close gaps between athletics budget growth and outside resources."

Brand cited both fiscal pressures on higher education in general and budget growth in Division I that has significantly outpaced education spending over the last several years, largely because of a decade-long bull market in media contracts, marketing efforts, corporate sponsorships and ticket sales. With the popularity of college sports at an all-time high, many universities have embarked aggressively on facility expansions to accommodate the demand. Nearly 20 percent of current spending in athletics in fact is tied to facility expansion and the debt that results.

But Brand said as outside revenue growth for athletics begins to moderate at most institutions, the rate of budget growth has not always followed. In many instances, he said, the result has been a need for increased support of athletics through institutional funds. In other words, Brand said, athletics budgets have been growing at a rate that makes it difficult for universities to fill the gap.

Brand said the first order of business is to give chancellors and presidents better data that more accurately paint intercollegiate athletics’ fiscal landscape and inform decisions. Financial reporting in the past — primarily through the Equity in Athletics Disclosure Act — has been uneven at best, but Brand pointed to a new partnership with the National Association of College and University Business Officers that will lead to more accurate data in the financial arena.

"We have developed a set of management tools for presidents to use," Brand announced. "We will now be able to provide dashboard indicators that compare how institutions are doing financially with peer groups and alerting them to areas that could be under strain.

"The goal is to moderate the growth of athletics budgets so that institutional funds do not increasingly have to cover revenue shortfalls. We are not trying to reduce spending or even to cap it. Growth will, and should, continue in athletics departments. For the vast majority of institutions, we simply must moderate the rate of growth so that participation opportunities are maximized without creating financial problems for campus resources. Budgetary growth in athletics budgets, generally speaking, should resemble growth for the campus as a whole."

The partnership with NACUBO, Brand said, brings clarity to the ways in which financial data are reported and compared. Data will be submitted under a common set of definitions, and the reports will undergo third-party review and require presidential sign-off. "Transparency in the aggregate will be required," he said.

The provision of clear, concise and comparable data, Brand said, will enable chancellors and presidents to continue their leadership efforts in guiding college sports into a second century — only this time through local decision-making rather than through a national template as was the case with academic reform.

Brand said he is confident presidents will answer the leadership call as they have done with previous reform initiatives. "Without their direction and their determination, we would not have the structure in place that we now have for academic reform," he said. "It is because of dedicated presidents and chancellors that we are beginning to harvest the efforts of their persistence and collaboration through national policy to make academics first.

"This is exactly the leadership that should apply to fiscal reform and the other issues identified in the Task Force report. But we must do so from a focused campus perspective. There will always be occurrences that lead us astray. We must persist, campus by campus, to stay the course described in this report."

To assist in the leadership effort — and to ensure athletics remains integrated as a component of the university — Brand appealed to conference commissioners, athletics directors and faculty leaders for guidance.

"Presidents cannot do the job alone," he said. "Key to their success will be the conjoint leadership of athletics directors — who are the operational managers of intercollegiate athletics. Indeed, the role of the athletics director has become more important, and more difficult, as we move toward greater fiscal accountability."

Brand also said presidents and chancellors must challenge their faculty to first become knowledgeable about the facts surrounding athletics on campus and then become engaged in supporting the proper role of athletics. Faculty athletics representatives will be called upon, even more so than in the past, to bridge administration and the general faculty, he said.

Brand also celebrated a second partnership, this one with the Association of Governing Boards, as another piece to the collaborative leadership puzzle. The NCAA and the AGB will develop educational programming to inform new governing board members around the country on the proper relationship between boards that set policy in athletics and presidents who put those policies into action and oversee the campus athletics administration.

"It takes the entire campus to run intercollegiate athletics properly," Brand said. "We must inform and engage the faculty, enable operational leadership by the athletics director, and develop clear lines of authority to the president from the board that support the principled integration of athletics into the purposes of higher education."

NCAA President Myles Brand’s October 30 speech to the National Press Club focused primarily on the Presidential Task Force report and its emphasis on campus-based fiscal responsibility, but it also addressed a Congressional letter that challenges college sports tax-exempt status.

California representative Bill Thomas, chair of the U.S. House Ways and Means Committee, sent Brand more than 25 questions last month that ask the NCAA and its members to defend the educational purpose of intercollegiate athletics that earns the enterprise a tax exemption from the IRS. The letter questions in particular the revenue generated by football and basketball programs, and the NCAA’s 11-year rights-agreement with CBS Sports to televise the Division I Men’s Basketball Championship.

At the Press Club, Brand said the issue is not the about the revenue. "We should do everything we can within the values and mission of higher education to maximize revenues to support these programs. That is what the rest of the campus is doing, and athletics must do the same."

But Brand said the Ways and Means inquiry has more to do with scale than with compliance.

"(To them), somehow generating revenue to support a tax-exempt purpose calls into question the value of the purpose itself," Brand said. "Intercollegiate athletics is as valuable to the educational experience of student-athletes as participating in an orchestra is to student-musicians or being part of theatrical productions is to student-thespians or writing for the student newspapers is to student-journalists. It is part of the college or university’s purpose of providing a comprehensive educational experience for its students. If it were not so, the first dollar spent on these enterprises would violate the purpose, not just the millionth."

Brand said nonprofit status is not about how much revenue is generated in athletics or elsewhere in higher education, but about how the revenue is used to meet the tax-exempt purpose of educating young men and women.

"Here are a couple of data points that helps support the role that intercollegiate athletics meets that purpose," he said. "In 2005, Division I institutions alone — through revenue from ticket sales, television and all other forms of income — provided $1.2 billion in scholarships to student-athletes. Many students would not be able to attend college without that scholarship support. It is among the largest single source of financial support for students, including low-income students, to get an education outside the federal government. And it is estimated that those same Division I institutions spend in excess of $150 million annually on direct academic support, so that students participating in athletics can maximize the educational value of their education. Don’t tell me intercollegiate athletics isn’t supporting the purpose of higher education."

Brand said any lingering doubts about the educational, not-for-profit status of intercollegiate athletics will be dispelled by the increased level of accountability and transparency of athletics budgets recommended in the Task Force report.

"No one should be able to legitimately claim that expenditures in athletics are being used for anything but the purposes of higher education," he said. "The approach recommended by the report makes it obvious and reinforces the not-for-profit tax status of college sports."