Jan 15, 2010 7:07:20 AM

ATLANTA – The sustainability of athletics programs is "very much an institutional issue" and schools must use their best judgment to "find the appropriate value level of supporting athletics on campus," NCAA Interim President Jim Isch said in his State of the Association address Thursday.

Isch, who served as the Association's chief financial officer before being appointed interim president in September, focused much of his speech on how the slumping national economy has affected NCAA athletics programs.

Isch also used his remarks to urge the Association to press forward with academic reform, and he recognized the man who championed it – the late NCAA President Myles Brand – moments after Brand was given the Gerald R. Ford Award, an honor Brand created early in his tenure.

"If Myles came into the NCAA presidency with a mandate," Isch said, "it was to confront concerns with the academic success of student-athletes."

But Isch left his lasting impression with remarks on how the economy has increased the pressure on athletics programs that rely on institutional subsidy to survive.

Citing budgets in Division I that range from $2.7 million to $123 million, Isch spoke of "a growing lack of financial homogeny among a group of institutions all attempting to fly the same banner."

The gap between those relatively few programs that can afford – even in a down economy – a lifestyle "born in financial prosperity" is widening, Isch said, and the effort for many institutions to sustain those behaviors to remain competitive in Division I "will likely become too exhaustive to maintain."

While Isch doubted that the "institutional discipline" necessary to rein in spending could be accomplished through national means, he did say he would work with governance bodies over the next few months to develop "a normative approach that establishes some parameters."

His immediate advice, though, was for individual institutions "to determine the value of athletics to a campus that comports with the values of the institution itself," and to promise "to ensure that entertainment is not the guiding principle for how athletics budgets are developed."

To a degree, the NCAA's most recent fiscal data suggest that institutions have already determined the value of athletics. Isch cited figures from the latest revenue and expenses report in Division I indicating that the median level of institutional subsidization for athletics – regardless of subdivision – is about $8 million.

That represents roughly 1 percent of total institutional budgets at the Football Bowl Subdivision level and about 4 to 4.5 percent for the Football Championship Subdivision and institutions without football, Isch said.

Isch's suggestion that institutions use individual good judgment comes on the heels of a Knight Commission survey of Football Bowl Subdivision presidents who called for a more collective approach.

Isch acknowledged that survey, saying the results to him indicated a sense among presidents that "intercollegiate athletics is spending more than it should, generating more revenue than is good for it, and that the values of higher education are being damaged."

Isch noted the following from the survey results:

• Two-thirds of FBS presidents expressed confidence that, considering current trends in athletics revenues and expenses, athletics operations are sustainable in their current form on their campuses. But less than half believe athletics programs on other institutions in their conferences are sustainable.
• An overwhelming majority (85 percent) indicated they felt compensation was excessive in the context of higher education for football and basketball coaches. But they are pessimistic about their ability to control these costs.
• Presidents see the "arms race" as divisive – steadily widening the gulf between the haves and have-nots.
• Presidents would like serious change, but the report noted that they do not see themselves as the force for the needed change.

But he countered those findings with NCAA data indicating the following:

• Over the last five years, generated revenues – those revenues generated by the athletics department – grew by a little more than 33 percent. Total expenses grew by just under 43 percent. Expenses outpaced generated revenue by nine percentage points.
• However, over the past two years, generated revenues grew by 15 percent and total expenses by 16 percent, indicating a lessening in the growth gap between revenues and expenses.
• Five years ago, athletics expenses were growing at rates that were up to 5 percent faster than institutional expenses. In the most recent year of data, however, that gap has closed to almost zero. It will be interesting to follow this trend, and especially so from the perspective of a down economy.

Isch said taken together, what presidents are saying through the Knight Commission survey and what the data themselves reveal "can be confusing and make conclusions illusive."

But he also added: "At a time when institutions and their faculty are fighting to save positions, 3 to 5 percent of an institutional budget could make the difference between keeping a program alive or seeing it perish."

In the end, though, Isch said all of the findings reiterate that the sustainability of athletics programs may be an issue for institutions to decide on their own.

Isch reminded Convention attendees that this same message came through loud and clear in Myles Brand's Presidential Task Force Report three years ago that said, "The reality for effective reform of spending and revenue generating behaviors for intercollegiate athletics is this: Each college and university must hold itself accountable for exercising its independent will as an institution of higher education. And it will do that best through well-informed, value driven and courageous presidential leadership."