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NCAA News Archive - 2007
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Division I budget trends get dashboard treatment
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By Gary T. Brown
The NCAA News
The NCAA News
The first signal Division I’s dashboard indicators project has revealed is that the “check engine” light is on. Athletics spending is progressing at a rate three times that of overall university spending — a pace presidents and chancellors know is not sustainable in the long run.
While the blinking beacon may be alarming to some, others are reassured that the NCAA’s collaboration with the National Association of College and University Business Officers to produce a uniform data-reporting system and provide dashboard indicators that allow for peer comparison will serve as a financial GPS for big-time intercollegiate athletics.
The dashboards, which are expected to be finalized in spring 2008, are to fiscal responsibility as the APR is to academic reform. They are benchmarks developed on a by-campus basis that provide presidents, athletics directors and university CFOs the most comprehensive, accurate and comparable data to date that inform decisions about athletics spending.
That means Kent State can compare itself to its Mid-American Conference peers in its reliance upon university-allocated funds as a percentage of the total athletics budget. Texas Tech can see where it ranks among Big 12 schools in football revenues. Duke can run a comparison with other private institutions on athletics giving. Oregon can determine its percentile in revenues via ticket sales. Illinois can stack up against other traditional basketball powers in facility investment. A Football Championship Subdivision institution can see the investment it takes to reclassify to the Football Bowl Subdivision.
In other words, the dashboards can be all things to all schools. Simply put, it is the best customized financial data Division I has ever had, and the system is being applauded by those who will use it.
“We do a lot of benchmarking at the institutional level,” said Michigan State University’s Kathy Lindahl, the school’s vice president for financial administration. “The dashboard project for athletics has tremendous potential in that it gives you instant validation as to whether you are ahead of the curve, behind it or in the ballpark. The data bring athletics to a level of sophistication that universities are accustomed to in other areas of the campus.”
Lindahl is one of several institutional members involved in a pilot distribution this summer of three-year financial data (2003-04, 2004-05 and 2005-06) and preliminary dashboard indicators. The data were collected using uniform reporting definitions the NCAA developed with NACUBO’s help. The point of the pilot was to test the accuracy and usefulness of the data and improve the dashboard presentation based on feedback.
That pilot prompted a revised presentation that will be distributed to the larger Division I membership over the next few months. Feedback from that group will complete the project in the spring. That financial cohort will include 2006-07 data as well.
The deliberate testing approach ensures accuracy and usability, said NCAA Chief Financial Officer Jim Isch.
“We’ve heard from Division I chancellors and presidents that they’d like better financial data upon which to base decisions,” Isch said. “They’ve had to rely on EADA reports and anecdotal data that had been interpreted differently by many schools, which produced uneven and at times unreliable information that made financial comparisons difficult, if not impossible, over the years.”
Who will use these data? Presidents, for one. In fact, they are the target audience. But the dashboards are designed for anyone with a hand in formulating the athletics budget.
“Presidents are deeply engaged in benchmarking in every other aspect of our work — why not in athletics?” University of Cincinnati President Nancy Zimpher said. “We are creating a system for accountability for the value added of a college degree, a system about what students are learning from their general studies program and a system about the degree to which students are satisfied with their college experience. We are using national instrumentation to probe those areas, so the idea of a common data set for gauging the return on our investment in athletics is just as important.”
Iowa State University Athletics Director Jamie Pollard said the dashboard project is long overdue.
“I know what the appetite from the membership — particularly athletics directors — is for data. This will fill that void,” he said. “What was provided before (the biannual revenues and expenses report) was every other year and in aggregate, and we need more specifics than that. The old data don’t tell where I rank in the Big 12 or against the Big Ten. That information to me as an AD is invaluable.”
Influencing decisions
Most people who have seen the pilot data or have had something to do with developing the project agree that the information is the best yet and that it will inform decision-makers in useful ways. When the Presidential Task Force advocated the system, members wanted the new financial data to not only inform but also influence decisions. While the Task Force said Division I intercollegiate athletics is not in financial crisis (athletics spending, while rising, still constitutes only about 4 percent, on average, of overall university budgets), the current spending trend bothers chancellors and presidents who look into the future. A call for moderation was necessary.
Knowing they could not legislate cost containment, however, Task Force members figured their best shot was presenting clear, concise and comparable financial data to their peers. That way, schools considering an investment to reach a new level of competitiveness could see what it takes, and outliers could see themselves in a percentile light and judge whether they are comfortable in that environment.
Task Force members preached a sermon based on local decision-making — the war on fiscal responsibility could not be waged at a national level. The best way to influence local decisions is with local data, they said.
That’s a blessing and a curse, according to some.
“The kind of change we’re talking about will be more incremental than revolutionary,” said University of North Carolina, Chapel Hill, Chancellor James Moeser, who as a Task Force member helped draft the white paper on the dashboard project. “But we are giving leaders the tools to make more informed decisions. It’s up to every president and chancellor to use them in their own situations.”
Moeser knows how he will use the dashboards. He said they’ll prompt him to view the athletics department much more like the college of arts and sciences and the medical school in the context of budget building. In other words, athletics — as it should be — is just another integrated component of the university’s budget review and not a silo operation. “There will be a lot more conversation between the athletics department and our vice chancellor for financial administration than there has been in the past, for example,” Moeser said. “And there will be more regular presentations by athletics to the budget committee.”
Morgan Olsen, Purdue University’s executive vice president and treasurer, said while the dashboard project may not in and of itself modify spending behavior, it will provide a measuring stick that will allow people to compare and contrast practices and outcomes. The more talk that occurs, the better the chance for change.
“It ought to be part of a full discussion of issues, policies and alternatives that allow people to arrive at well-thought-out decisions,” he said. “We all have multiple responsibilities to put student-athletes in a position to be successful, and of course we know that on the field or court it is a competitive arena, but at the same time we also are concerned about costs. Everyone is afraid of unilateral disarmament, but at some point, the playing field can’t always be level, and this will help develop a discussion that could result in a greater conservatism or cost effectiveness.”
Deterrent or accelerant?
Task Force members acknowledge the possibility that the additional data may in fact fuel the perceived arms race in athletics rather than douse the flame, but most of them downplay the concern, saying that more accurate data beats little or unreliable information.
Moeser called the concern a red herring in fact, saying the dashboards save presidents and chancellors from relying on anecdotal financial data in athletics.
Zimpher also said the dashboards will be a useful tool. “It remains to be seen whether this will be a vehicle for controlling our investment in athletics, or, as the Task Force charge says, ‘recentering’ athletics within the educational mission, but I am optimistic these data will give people the information they need to make critical decisions. We use this kind of lens in every other aspect of our academic work — we’re using it extensively with the APR — so why not with financial-investment reporting?” she said.
Others, though, think the dashboards will prompt institutions in the upper echelon to hit cruise control and some in the lower half to step on the gas.
“Large governing bodies are guilty of that kind of behavior, and you can’t help it,” said Katie Hill, a senior associate athletics director at Clemson University. “You presume that everyone’s decision-making is based on the global good. It’s not. Does our government scale back spending because the national budget is out of hand? No. Does our national debt keep us from borrowing from China? No. We’ve heard the expression that all politics are local — well, all athletics decisions are local, too. It’s about what our universities, our athletics departments, and our fans and supporters expect from us.”
Iowa State’s Pollard said some people actually fear the dashboards for the truth they might expose. But he said those are the same people who might criticize something like the NACDA Directors’ Cup, which compares athletics programs based on sport-by-sport results.
“It’s another opportunity to rank us,” he said. “Well, the last time I checked, that was part of our industry — it’s competition. We rank ourselves every day. But the benefit of the dashboard project is that the outliers will be revealed to themselves. People are afraid of being exposed to the world, but that’s not the intent. The intent is to put you in a position to know where you stand so you can make good decisions.”
Ultimately, the dashboards meet a critical need, Moeser said.
“We’ve had access to EADA data in the past but they have not been put into a very useful format,” he said. “Data without reference points are not terribly useful. This creates the reference points that help contextualize the information and thus make it useful. We do that routinely in looking at academic programs, and we should being doing that in athletics as well.”
Pilot test of dashboard indicators tool by 15 Division I member institutions.
September 2007
Financial Reporting Advisory Committee reviewed pilot feedback on definitions, indicators and presentation.
October-November 2007
2004-05-06 data sent to Division I members for review (corrections to be returned to NCAA).
October 2007-March 2008
Evaluate enhanced dashboard presentation options. Revise dashboard presentation per committee recommendations.
January 2008
Institutions submit fiscal-year 2007 financial data.
Spring 2008
Send dashboards (including fiscal-year 2007 data).
While the blinking beacon may be alarming to some, others are reassured that the NCAA’s collaboration with the National Association of College and University Business Officers to produce a uniform data-reporting system and provide dashboard indicators that allow for peer comparison will serve as a financial GPS for big-time intercollegiate athletics.
The dashboards, which are expected to be finalized in spring 2008, are to fiscal responsibility as the APR is to academic reform. They are benchmarks developed on a by-campus basis that provide presidents, athletics directors and university CFOs the most comprehensive, accurate and comparable data to date that inform decisions about athletics spending.
That means Kent State can compare itself to its Mid-American Conference peers in its reliance upon university-allocated funds as a percentage of the total athletics budget. Texas Tech can see where it ranks among Big 12 schools in football revenues. Duke can run a comparison with other private institutions on athletics giving. Oregon can determine its percentile in revenues via ticket sales. Illinois can stack up against other traditional basketball powers in facility investment. A Football Championship Subdivision institution can see the investment it takes to reclassify to the Football Bowl Subdivision.
In other words, the dashboards can be all things to all schools. Simply put, it is the best customized financial data Division I has ever had, and the system is being applauded by those who will use it.
“We do a lot of benchmarking at the institutional level,” said Michigan State University’s Kathy Lindahl, the school’s vice president for financial administration. “The dashboard project for athletics has tremendous potential in that it gives you instant validation as to whether you are ahead of the curve, behind it or in the ballpark. The data bring athletics to a level of sophistication that universities are accustomed to in other areas of the campus.”
Lindahl is one of several institutional members involved in a pilot distribution this summer of three-year financial data (2003-04, 2004-05 and 2005-06) and preliminary dashboard indicators. The data were collected using uniform reporting definitions the NCAA developed with NACUBO’s help. The point of the pilot was to test the accuracy and usefulness of the data and improve the dashboard presentation based on feedback.
That pilot prompted a revised presentation that will be distributed to the larger Division I membership over the next few months. Feedback from that group will complete the project in the spring. That financial cohort will include 2006-07 data as well.
The deliberate testing approach ensures accuracy and usability, said NCAA Chief Financial Officer Jim Isch.
“We’ve heard from Division I chancellors and presidents that they’d like better financial data upon which to base decisions,” Isch said. “They’ve had to rely on EADA reports and anecdotal data that had been interpreted differently by many schools, which produced uneven and at times unreliable information that made financial comparisons difficult, if not impossible, over the years.”
Who will use these data? Presidents, for one. In fact, they are the target audience. But the dashboards are designed for anyone with a hand in formulating the athletics budget.
“Presidents are deeply engaged in benchmarking in every other aspect of our work — why not in athletics?” University of Cincinnati President Nancy Zimpher said. “We are creating a system for accountability for the value added of a college degree, a system about what students are learning from their general studies program and a system about the degree to which students are satisfied with their college experience. We are using national instrumentation to probe those areas, so the idea of a common data set for gauging the return on our investment in athletics is just as important.”Iowa State University Athletics Director Jamie Pollard said the dashboard project is long overdue.“I know what the appetite from the membership — particularly athletics directors — is for data. This will fill that void,” he said. “What was provided before (the biannual revenues and expenses report) was every other year and in aggregate, and we need more specifics than that. The old data don’t tell where I rank in the Big 12 or against the Big Ten. That information to me as an AD is invaluable.”
Influencing decisions
Most people who have seen the pilot data or have had something to do with developing the project agree that the information is the best yet and that it will inform decision-makers in useful ways. When the Presidential Task Force advocated the system, members wanted the new financial data to not only inform but also influence decisions. While the Task Force said Division I intercollegiate athletics is not in financial crisis (athletics spending, while rising, still constitutes only about 4 percent, on average, of overall university budgets), the current spending trend bothers chancellors and presidents who look into the future. A call for moderation was necessary.
Knowing they could not legislate cost containment, however, Task Force members figured their best shot was presenting clear, concise and comparable financial data to their peers. That way, schools considering an investment to reach a new level of competitiveness could see what it takes, and outliers could see themselves in a percentile light and judge whether they are comfortable in that environment.
Task Force members preached a sermon based on local decision-making — the war on fiscal responsibility could not be waged at a national level. The best way to influence local decisions is with local data, they said.
That’s a blessing and a curse, according to some.
“The kind of change we’re talking about will be more incremental than revolutionary,” said University of North Carolina, Chapel Hill, Chancellor James Moeser, who as a Task Force member helped draft the white paper on the dashboard project. “But we are giving leaders the tools to make more informed decisions. It’s up to every president and chancellor to use them in their own situations.”Moeser knows how he will use the dashboards. He said they’ll prompt him to view the athletics department much more like the college of arts and sciences and the medical school in the context of budget building. In other words, athletics — as it should be — is just another integrated component of the university’s budget review and not a silo operation. “There will be a lot more conversation between the athletics department and our vice chancellor for financial administration than there has been in the past, for example,” Moeser said. “And there will be more regular presentations by athletics to the budget committee.”
Morgan Olsen, Purdue University’s executive vice president and treasurer, said while the dashboard project may not in and of itself modify spending behavior, it will provide a measuring stick that will allow people to compare and contrast practices and outcomes. The more talk that occurs, the better the chance for change.
“It ought to be part of a full discussion of issues, policies and alternatives that allow people to arrive at well-thought-out decisions,” he said. “We all have multiple responsibilities to put student-athletes in a position to be successful, and of course we know that on the field or court it is a competitive arena, but at the same time we also are concerned about costs. Everyone is afraid of unilateral disarmament, but at some point, the playing field can’t always be level, and this will help develop a discussion that could result in a greater conservatism or cost effectiveness.”
Deterrent or accelerant?
Task Force members acknowledge the possibility that the additional data may in fact fuel the perceived arms race in athletics rather than douse the flame, but most of them downplay the concern, saying that more accurate data beats little or unreliable information.
Moeser called the concern a red herring in fact, saying the dashboards save presidents and chancellors from relying on anecdotal financial data in athletics.
Zimpher also said the dashboards will be a useful tool. “It remains to be seen whether this will be a vehicle for controlling our investment in athletics, or, as the Task Force charge says, ‘recentering’ athletics within the educational mission, but I am optimistic these data will give people the information they need to make critical decisions. We use this kind of lens in every other aspect of our academic work — we’re using it extensively with the APR — so why not with financial-investment reporting?” she said.
Others, though, think the dashboards will prompt institutions in the upper echelon to hit cruise control and some in the lower half to step on the gas.
“Large governing bodies are guilty of that kind of behavior, and you can’t help it,” said Katie Hill, a senior associate athletics director at Clemson University. “You presume that everyone’s decision-making is based on the global good. It’s not. Does our government scale back spending because the national budget is out of hand? No. Does our national debt keep us from borrowing from China? No. We’ve heard the expression that all politics are local — well, all athletics decisions are local, too. It’s about what our universities, our athletics departments, and our fans and supporters expect from us.”
Iowa State’s Pollard said some people actually fear the dashboards for the truth they might expose. But he said those are the same people who might criticize something like the NACDA Directors’ Cup, which compares athletics programs based on sport-by-sport results.
“It’s another opportunity to rank us,” he said. “Well, the last time I checked, that was part of our industry — it’s competition. We rank ourselves every day. But the benefit of the dashboard project is that the outliers will be revealed to themselves. People are afraid of being exposed to the world, but that’s not the intent. The intent is to put you in a position to know where you stand so you can make good decisions.”
Ultimately, the dashboards meet a critical need, Moeser said.
“We’ve had access to EADA data in the past but they have not been put into a very useful format,” he said. “Data without reference points are not terribly useful. This creates the reference points that help contextualize the information and thus make it useful. We do that routinely in looking at academic programs, and we should being doing that in athletics as well.”
Dashboard timeline
July/August 2007Pilot test of dashboard indicators tool by 15 Division I member institutions.
September 2007
Financial Reporting Advisory Committee reviewed pilot feedback on definitions, indicators and presentation.
October-November 2007
2004-05-06 data sent to Division I members for review (corrections to be returned to NCAA).
October 2007-March 2008
Evaluate enhanced dashboard presentation options. Revise dashboard presentation per committee recommendations.
January 2008
Institutions submit fiscal-year 2007 financial data.
Spring 2008
Send dashboards (including fiscal-year 2007 data).
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