The Epicenter of the Athletics Scandal: The Mid-American Conference

By Richard Vedder

The Grapevine at Illinois State University reports that state appropriations for universities were down this year for the second consecutive year. After allowing for inflation and enrollment increases, the declines average something on the order of 10 percent per student over two years, with little prospect that this will reverse soon, particularly since federal stimulus money will not be provided in the future. Yet amidst all of this, university subsidies for ball throwing and related athletic activities are soaring, and new data gathered by USA TODAY and reported today in INSIDE HIGHER ED is mind-blowing.

It is true that most big nationally contending sports powers get by on very modest subsidies --the Ohio States, LSUs, Oklahomas, even Cal Berkeley and Illinois (whose major sport athletic success in recent years is relatively mediocre). But many of the schools aspiring to athletic greatness are getting clobbered financially, and the epicenter of that phenomenon is the Mid-American Conference, a group of 13 schools with so-so athletic prowess but alumni and bubbas who have huge aspirations.

The survey provided, by my calculations, data on 10 of the Mid-American Conference Schools: Ball State, Bowling Green State U., Central Michigan, Eastern Michigan, Kent State, Miami (Ohio), Northern Illinois, Ohio University, and the universities of Akron and Toledo. Collectively, these schools had $140.7 million in subsidies in 2008, well over two-thirds total sports revenues of $209.6 million. The typical school in this group probably has 20,000 students, and a budget excluding auxiliary enterprises of perhaps $400 million. That typical school is now devoting $35 of every $1000 raised to athletic subsidies, which typically now exceed $700 per student --typically well over 10 percent of net tuition fees collected by the schools.

The best example is Eastern Michigan University, nestled in the suburbs of the nation's most dysfunctional economic basket case, Detroit. A good runner could run the 5.7 miles from Eastern Michigan's Rynearson Stadium to the University of Michigan in Ann Arbor's Big House in well under an hour. My friend at Michigan, ex-prez Jim Duderstadt, tells me state appropriations there now are (or soon will be) less than in 1990. Yet next door to this athletic powerhouse, Eastern Michigan University, amidst declining incomes and massive unemployment, used $21.4 million to subsidize sports --and the program appears to have run a budget deficit, so the true subsidy may have been greater. My guess is the subsidy is equal to at least 20 percent of EMU state appropriations. In a state desperate to finance the most basic of services, why is it allowing this school to drain perhaps one-fifth of state funds received away from core missions in order to make alums and bubbas happy and engage in unaffordable hubris?

My school, Ohio U., is slightly worse than average for the bunch. Aside from drawing nearly $15 million in subsidies, the program routinely exceeds its budget (absolutely forbidden of nearly all other units of the university), and recently added scores of thousands of dollars to the deficit so it could play a losing game in a fourth rate bowl (called the Little Ceasars Pizza Bowl--best known for their $5 Hot-n-Ready pies), in a fifth-rate city (Detroit) to a sixth-rate sized audience --the stated attendance, 30,000, according to friends I know who were there, was in fact a gross exaggeration. It was on ESPN. Big deal. Losing one of the lesser bowl games on national television to a smallish audience ---how does that further the academic mission?

Why is this being allowed? Why don't states apply a tax on appropriations? For every dollar of athletic subsidies equal one percent of core (non-auxiliary enterprise) revenues or expenses, there will be a reduction of state appropriations by two dollars. At Ohio U., I think this would be an appropriations reduction approaching $20 million a year --enough to make the Bubbas and their puppets (university trustees and the president) realize that we must down-size sports just as we downsize the English Department and get rid of some of the excessive bureaucracy.