NCAA News Archive - 2006

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Key Division I report calls for local-level financial solutions


Oct 23, 2006 1:01:10 AM

By Gary T. Brown
The NCAA News

A presidential task force charged with setting the future agenda for Division I athletics will release a report later this month that calls for tighter scrutiny of spending trends in college sports and a re-centering of athletics within the educational mission.

NCAA President Myles Brand will formally announce the report of the 50-member Presidential Task Force on the Future of Division I Intercollegiate Athletics in remarks before the National Press Club in Washington, D.C., October 30.

The Task Force report, called "The Second-Century Imperatives — Presidential Leadership and Institutional Accountability," calls for presidents and chancellors to "take reform home" by making leadership decisions that adjust behavior at the campus level rather than operate under a national mandate, as has been the case with previous reforms.

A campus-based template is required, Task Force members say, because of the fiscal nature of the reforms called for in the report. The legislative path presidents took with the recent academic-reform structure in Division I does not translate well to fiscal matters since the NCAA cannot dictate how members should manage their athletics operating budgets.

However, because Task Force members agree that the financial state of intercollegiate athletics is the next reform hurdle to clear, they are strongly recommending that their peers bring their athletics budgets more in line with university spending and that they do so by using sound individual judgment rather than relying on national standards. To assist in that effort, the Task Force also is recommending a uniform reporting of finances that produces clear, consistent and comparable data upon which institutional leaders can make more informed decisions.

The rationale behind the fiscal-responsibility message — indeed, one of the primary reasons the Task Force was formed — is that research shows that spending in big-time college sports has outpaced that of higher education by two or three times in the last several years, a trend that most presidents and chancellors regard as unsustainable.

Moreover, Task Force members caution that those fiscal trends add significant stress to an enterprise already pressured by market forces to stray from the collegiate model.

NCAA President Brand, who appointed the Task Force in January 2005, said those pressures are the result of the values important to higher education being "overwhelmed" by the popularity of intercollegiate athletics to media and marketing. "As pressures to win and to generate revenue increase," he said, "the integration of athletics with the academy, the interference with presidential authority by avid fans or governing board members, and the primacy of education in the student-athlete experience all have been threatened."

Brand called the Task Force report the most concerted reform effort from presidents and chancellors since the Knight Foundation Commission on Intercollegiate Athletics’ groundbreaking 1991 report "Keeping Faith with the Student-Athlete," which called for increased presidential attention to academic and fiscal integrity in athletics. That report also led to the establishment of the athletics certification program in Division I.

The NCAA Task Force report also focuses on financial issues, but it gives presidents and chancellors a clearer decision-making road map by providing more uniform data collection and comparative annual benchmarks (called "dashboard indicators") that allow leaders to exercise good judgment in fiscal matters.

Current research indicates that only a handful of institutions operate their athletics departments in the black — most balance their athletics budgets only through subsidies from unrestricted university funds (which in the report are called "allocated funds"). Many schools are increasing those allocations annually, in some cases to the point of pressuring the academic mission and values of the institution.

Other schools have counted on "just in time" revenue growth to keep pace with spending, but many leaders believe athletics has exhausted its traditional revenue streams and may struggle to find others that offset a "keeping up with the Joneses" mentality. Still another concern is that many institutions hold mortgages on burgeoning facility expansions that represent on average 20 percent of intercollegiate athletics spending, a factor that puts institutions at risk over time if the popularity of college sports wanes.

In many ways, these fiscal trends have been prompted by a Division I philosophy that encourages athletics departments to be self-sustaining. However, Task Force members say that approach has served only to isolate athletics, which has led to the natural tendency for some departments to drift from university values. The Task Force is asking presidents and chancellors to shift from that philosophy and integrate athletics — both culturally and operationally — within university parameters, and to do so through individual presidential leadership at the campus level.

Task Force Chair Peter Likins, who retired as president at the University of Arizona this spring, said most of the changes in direction that presidents and chancellors need to pursue cannot be accomplished by new NCAA regulations. "What is required now is courageous leadership, most importantly from presidents and chancellors, but also from faculty members, governing boards, athletics directors and coaches," Likins said.

Likins, who also chaired the Task Force’s fiscal responsibility subcommittee — one of four subgroups the Task Force charged with focusing on specific areas — said reform will be challenging in light of the fact that intercollegiate athletics is not perceived to be in crisis. On the contrary, he said, many people believe college sports is enjoying unprecedented success and popularity. But the current fiscal trends, he said, simply are unsustainable, and it would be unwise to assume that athletics is foolproof to these financial factors.

Brand agreed, pointing to recent financial studies in athletics that raised concern. In 2003, an Association-commissioned study from three Brookings Institute-affiliated economists examined the effects of spending in athletics among Division I institutions, looking specifically at operating budgets. That first report was updated 18 months later, and a companion study also was released that reported on the effects of capital expenditures in Division I.

"Those reports disputed conventional wisdom with empirical data in a number of instances," Brand said. "Despite their irrefutable evidence contradicting the argument that athletics must spend to win and win to increase revenues, the reports were virtually ignored by the intercollegiate athletics community."

That prompted Brand to assemble the Task Force, which included 50 presidents and chancellors.

Likins said the Task Force worked diligently over 18 months to produce a meaningful report that includes more than two dozen recommendations for significant change. However, he said, the report in and of itself will not be what in the end influences change.

"The publication of the report is no more than a means to greater ends that must be achieved if we are to sustain the extraordinary benefits of intercollegiate athletics without being seriously damaged by its potential for harm," Likins said. "While athletics is not in an immediate crisis financially, financial issues are the most likely symptoms of future trouble. The resulting — and perhaps deeper — problem is the danger of cultural isolation of student-athletes from the intellectual purposes and academic values of colleges and universities if budgetary matters are not addressed.

"Unless we find ways to strengthen the integration of athletics within our universities," Likins said, "we can foresee not only failure to meet our responsibilities to our student-athletes, but more pervasively a distortion of the fundamental character of our academic institutions."

The Task Force report will available online at www.ncaa.org October 30.


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