As the NCAA heads toward its premier money-making event, the Men’s Final Four, key administrators in college sports wonder if the enterprise has reached a financial crossroads.

Critics question the sustainability of the current business model and worry about what additional unappealing financial decisions may lie ahead.

Public institutions are facing reduced allocations from state government. Private institutions, often dependent on interest income from endowments, are not receiving the same return on their investments. Tuition is reaching unsustainable levels, and the recession is forcing families to make tough choices about sending their kids to college.

Notable cost-cutting moves have made included required furloughs for all staff – including athletics administrators and coaches (including Clemson, Arizona State and Maryland), layoffs in athletics (including Florida Atlantic and Stanford), and cutting entire teams. The Association itself has changed championships travel policies.

M. Dianne Murphy, athletics director at Columbia, said the downturn is making her and her peers scrutinize how they manage the enterprise, both day-to-day and long term.

“Maybe there are things we wanted to do in the past that we haven’t had the courage to do because it might upset a key coach or alumni, something we really felt like it was good for us to do, but we just weren’t willing to do it,” she said. “All those things have to be considered.”

The Western Athletic Conference recently changed its championship hosting from a bid process to a rotation, which allowed each of the conference’s institutions to host championships, even the geographically far-flung Hawaii and Louisiana Tech. But when the economy pointed downward, the WAC formed a task force to look at cost savings. One of the first changes the task force will propose will be a move to more centrally located sites for some championships, though Hawaii will still host men’s and women’s tennis and baseball this year.

“When we first established the task force, it just so happened that one of the days we were meeting was the first 700-point drop in the Dow,” said Commissioner Karl Benson. “That kind of established a sense of crisis. We actually entertained at that time whether to cancel some championships. It got us thinking about what we can do in the future to control our championship costs.”

Ivy League Executive Director Jeff Orleans said such fiscal discipline may vary depending on the nature of the schools and the sports.

 “Everything I hear from other commissioners at every level is that, certainly for next year, people are saying ‘nothing’ more and ‘often’ less,” he said. “No increases, they are watching construction projects. Many of us have gotten more careful if not leaner over the years. On the other hand, you’ve got big-time football and basketball, and I don’t have a sense of whether they’re going to tell themselves they have to get off the treadmill.”

What institutions at major conferences do over the next several years could determine whether the divide between the high- and low-resource institutions will continue to grow.

“If the big conferences feel that baseball and soccer and field hockey and swimming are relatively immune, whereas the rest of us are going to tighten our belts, that will make Division I seem more and more like two subdivisions trying to find a common ground,” Orleans said. “If the big conferences say, ‘It’s one thing to do what we do in football and basketball because they bring in revenue, but otherwise we, too, will be constrained,’ that’s another thing. Then it would be easier to find ways to change. If they are never going to actually think about these things, we will be driven further apart.”

However, Clayton Hamilton, associate athletics director for business operations at Colorado and president of the College Athletics Business Management Association, said institutions at all ends of the spectrum will feel additional impact from slow ticket sales and sluggish philanthropic giving to athletics.

“One thing you might see is those at the high end come back to the middle somewhat (because of the economy),” he said.

As income from traditional sources becomes more scarce, commercial pressure may increase. In his 2009 State of the Association speech, NCAA President Myles Brand said finding the balance  between “unrealistic idealism” in which there are no commercial activities and “crass commercialism” in which anything goes is the next great challenge for college sports.

“We understand that some level of commercial activity is necessary, even appropriate,” Brand said. “But we also understand that there must be a balance reached so that such activity does not overwhelm the values of higher education. Almost every university and college must provide financial subsidy to conduct intercollegiate athletics. To help meet these costs, revenues from commercial activity are required.”

With the growing need to take advantage of more commercial opportunities to help balance the budget, some worry that the segregation between high- and low-resource institutions could worsen, with some institutions able to take better advantage of corporate dollars. Institutions and conferences will feel pressure to secure more corporate relationships, and the same opportunities will likely not be available to all.

Tim Pernetti, who will officially take over as athletics director at Rutgers on Wednesday, believes that schools at every level of Division I will be able to take advantage of commercial opportunities.

“I will argue that the guy in Chapel Hill, North Carolina, is as big there as the guy at Butler University is in Indiana,” he said. “It’s always within the local region where they live and breathe, where they are identifiable.

 “To me, every university is going to have opportunities, and obviously some markets are bigger and provide more opportunities for exposure. But if you go back to that conversation about those two different kids, there are opportunities in both markets, but the scale of the opportunities are going to be different.”

As technology advances and the commercialism landscape continues to evolve, the opportunities for institutions seeking to grow revenue through creative means will grow as well. At the 2009 NCAA Convention, Brand appointed a task force to study the delicate balance between growing revenue and protecting student-athletes.

The Task Force on Commercial Activity in Division I Intercollegiate Activity released its report earlier this year, recommending a loosening of regulations governing the use of student-athlete names and likenesses for commercial purposes. The presidents and consultants who put together the report, however, were clear that no student-athletes should be exploited in the quest for new revenue sources.

The recommendations, sent to the governance structure last week by the Division I Leadership Council, will be eagerly awaited by athletics directors across the country who are staring at budgets full of red ink.

Still, some high-profile administrators see hope and opportunity amid all the turmoil.

 “There will be some good things that come out of (the economic downturn),” said Patriot League Executive Director Carolyn Schlie Femovich. “In trying and challenging times, we bring out the best in ourselves in reviewing management strategies. It’s painful, it’s difficult. Any time you talk to people about changing the way you’ve been doing business, it causes some angst and perhaps some readjustment.”

Hamilton at Colorado said he thinks the next two to three years will be a crucial period for Division I.

“I think we see a period of caution and reprioritization of resources,” he said. “Long term, though, it will definitely rebound and continue to grow.”