Members of the Knight Commission on Intercollegiate Athletics called for NCAA presidents and chancellors to take “collective action” to moderate rates in the growth of athletics spending that have outpaced those in higher education overall.

Meeting May 12 in Washington, D.C., commission co-chairs William “Brit” Kirwan, chancellor of the University System of Maryland, and Southern Methodist University President R. Gerald Turner both called on their presidential peers to right the financial ship together.

“This is not a battle that can be won one institution at a time,” Kirwan said, noting that campus constituents may be reluctant to act unilaterally for fear of falling behind competitively. “Unfortunately, local interests will not tolerate the courageous actions that a president might want to take – local pressure will be a significant impediment to meaningful reform and change. What is required if we are going to get this financial house in order is collective action.”

Turner added that the current national economic recession “is accelerating the need to make hard choices about college athletics.” However, Turner said, the fundamental problems will not abate when the economy improves.

“The struggling economy presents a prime climate for all stakeholders in college sports to take action. Through innovative solutions, we can take measures to reign in ever-increasing athletics spending and preserve all that is good about college sports,” Turner said.

Though no immediate “innovative solutions” emerged during the commission’s May 12 meeting, members did hear from University of Illinois tax law professor John Colombo about a possible trade-off between tax exemptions and collective spending restrictions. Colombo said while it would be difficult to remove tax-exempt status from big-time football and basketball programs, Congressional action would be justified in attaching special limitations to athletics programs, such as restricting expenditures or mandating disclosures so that programs could continue to receive tax-favored status.

“In essence, the tax exemption could be used as a lever to mandate some control in expenditures,” Kirwan said. “Congress could impose some restrictions on expenditures in order for programs to be entitled to the tax exemption. While we generally don’t believe that Congressional action is necessary to regulate intercollegiate athletics, we are not ready to dismiss any proposals that could provide effective means to address our challenging financial problems.”

More recommendations about collective action could come from a survey the Knight panel commissioned of presidents at Football Bowl Subdivision institutions to gather opinions on athletics finances at their schools and for the FBS as a whole. Ninety-four of the 119 presidents at FBS schools already have been contacted. Kirwan said a subset of that group will be interviewed a second time.

Survey results should compose much of a report the Knight Commission plans to release in January 2010 that Kirwan said will essentially complete the initial three-prong agenda the panel was charged with implementing 20 years ago when the group was created.

“If you look at what the commission was charged with, it was to establish presidential control of intercollegiate athletics, address the academic performance of student-athletes and shore up fiscal integrity. We can safely say that the commission has played a role in meaningful reform on the first two, but this next report will complete the initial agenda for the commission,” said Kirwan.

The commission plans to release the presidential survey results in early September. The panel will meet again October 26 in Miami.

Other presenters at the commission’s May 12 meeting included Andy Geiger, former athletics director at Ohio State, Stanford and Maryland, who emphasized that 50 percent of athletics spending is for coaches, staff and scholarships. He said significant change is unlikely until administrators have the will to address those expenditures.

Penn State Athletics Director Tim Curley said that supporting broad-based programming is becoming increasingly difficult for Division I programs as competitors put more resources into fewer programs. NCAA data reveal that only six FBS athletics departments had positive net revenues for each of the past five years.

“We heard from quite a few wise people giving us their best thinking on the financial challenges we are facing in intercollegiate athletics,” Kirwan said. “The timing of the commission effort here is good because people are concerned about finances. I believe there is the possibility of real and meaningful reform to bring us back to what is a more sustainable financial model for intercollegiate athletics.”