Thursday, June 17, 2010

Higher Ed Priorities: Academics or Sports?

by John Glaser

Ever think about all that collegiate money going towards football stadiums, coaching salaries, and team advertising? College sports are a multi-billion dollar a year industry. What if univerisities paid more financial attention to academic pursuits and understanding our world, rather than games of physical competition? CCAP thinks about these issues, as does the The Knight Commission:
The median budget for athletics programs in the Football Bowl Subdivision is about $40 million, but that number is deceiving. There is a wide gap in spending from the very top programs to the bottom. If we split big-time athletics programs into 10 deciles of 12 institutions based on expenses, the median budget for the lowest decile was $14 million in 2007 and the median budget for the top decile was $83 million. The highest spending categories for the average athletics program includes the following:

Salaries and benefits, especially coaches’ salaries (32 percent of total expenses);

Tuition-driven grants-in-aid—or sports scholarships (16 percent);

Facilities maintenance and rental (14 percent);

Team travel, recruiting and equipment and supplies (12 percent combined);

Fund-raising costs, guaranteed payments to opponents, game-day expenses, medical costs, conducting sports camps and other miscellaneous costs (12 percent).

The greatest challenge facing universities and their athletics departments today is dealing with the rapid rise of expenses. Athletics expenses are growing at an annual rate approaching 7 percent, according to a variety of studies (For more information, see references to Cheslock, Fulks, and Orszag and Israel at the end of this report.)

At the same time, revenues are not keeping up. In 2009, the National Collegiate Athletic Association published a report that found median operating spending for athletics increased 43 percent between 2004 and 2008, but median revenue generated by athletics programs grew only 33 percent over the same time period (Fulks, 2008). In another telltale spending reality a few years earlier, the NCAA reported in 2005 that athletic expenses rose as much as four times faster than overall institutional spending between 2001 and 2003 (Orszag & Orszag, 2005).
And here:
Median athletics spending at public institutions in the Football Bowl Subdivision (FBS) has grown nearly 38 percent from 2005 to 2008, while academic spending grew only 20 percent.

The ten public institutions spending the most on college sports are on pace to spend more than $250 million annually, on average, in 2020.

Median athletics spending per athlete ranges from 4 to nearly 11 times more than the academic spending per student in the FBS conferences.
This is troubling on a number of levels, but, just intuitively, how would non-sports fans feel if they knew their tuition was markedly higher only for the betterment of the vast industry of college sports?

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