The recently concluded Final Four culminated in what was again a hugely profitable March Madness for the NCAA and its member institutions. Based on this success, it would be difficult to imagine how any of the association’s 1,100-plus institutions would need to cut whole sports programs for financial reasons.
And yet, that is exactly what is occurring at schools around the country. In just the past month, sports have been cut at the University of Buffalo; Missouri State; South Carolina State; University of North Dakota; and even at Clemson. Almost all of the programs dropped were “non-revenue,” and were on both the men’s and women’s sides.
Other wholesale cuts have occurred at Temple, Richmond, Northeastern, James Madison, Robert Morris, Maryland, Rutgers and California in recent years. Overall, there has been a net loss of 338 men’s programs in Division I since 1988.
This net reduction in opportunities in Division I men’s intercollegiate athletics has come during an era of spectacular growth of sport revenues at NCAA institutions. The NCAA’s current contract with CBS and Turner for March Madness is for an average of $771 million per year, with an increase when an eight-year, $8.8 billion extension begins in 2024 — with nearly 96 percent of the annual March Madness payout redistributed to the NCAA member schools.
In addition to the lucrative extension for March Madness, ESPN will pay out $475 million per season through 2025 for the College Football Playoff (most of which goes to the Power 5 schools). Last summer, the Big Ten conference inked a six-year, $2.64 billion agreement with Fox Sports for its media rights. Bolstered by the SEC Network, the Southeastern Conference’s 2015 revenuesexceeded $500 million, $457.8 million of which was distributed to its 14 member schools. One of those members — football powerhouse Alabama — generates more money ($150.6 million in 2015) than every NHL team.
All of which prompts this seminal question: Why, in an era of such feverish revenue growth, are institutions electing to drop entire sport programs? How can it be that with all U.S. College Athletic Departments generating a combined $155 billion since 2003 that schools see no other choice but to cut sports?
This is a complex question with no easy answers, but the explanation is grounded in this principle: Institutional priorities constrained by an ever-widening revenue gap between many of the top schools and all others.
At the root of the issue is the increasingly lucrative nature of college football and basketball programs, which, for schools in the aforementioned Power 5 conferences, generate tens of millions per year (in 2016, Alabama’s football team posted $103.9 million in revenues). Because of the revenue generation and institutional promotion opportunities provided by successful football and basketball teams, schools have every incentive to invest heavily in those two programs.
Unlike NCAA basketball tournament money, however, the payouts from the new College Football Playoff system accrue almost exclusively to those 128 schools in the NCAA’s Football Bowl Subdivision (FBS). This, coupled with the explosion in the value of conference and institution media-rights deals, has opened a wide revenue gap between the Power 5 and all others (in 2015, Power 5 schools earned $4 billion more than all other NCAA institutions combined).
With these additional revenues, Power 5 schools can and do pour the money back into their football and basketball programs, investing in everything from facilities to support, strength and conditioning, and coaching staffs. Again, this is in their best financial interests, as the revenue-generating opportunities in football and basketball are significantly higher than those presented by other sports.
The result: Non-Power 5 schools (and even some in the Power 5) face the difficult dilemma of responding to the spending pressures exerted by those at the top, or continuing to maintain a broad-based athletic program. Coupled with decreased funding for state governments and the need to maintain compliance with Title IX, many institutions make the admittedly painful decision to eliminate sports programs.
Eventually, though, the revenue gap that divides the top-tier revenue generators from the rest of Division I may become so wide that no amount of sport cutting can bridge it. As a result, the non-Power 5’s ability to compete in sports like basketball could be eroded to an even greater extent than it already is. Mid-major stalwarts Gonzaga, Wichita State, Butler and Xavier could very well be imperiled if the revenue disparities continue to grow, harming the competitiveness that makes March Madness so commercially appealing.
Potential solutions to this problem face an uphill battle in the NCAA’s current regulatory system, which still holds a significant degree of respect for institutional autonomy. These challenges notwithstanding, only a collective decision by the NCAA and its member institutions — perhaps facilitated by an empowered commissioner or encouraged by Congress — can provide stronger incentives to retain teams and promote broad-based athletic programs. Just as Bud Selig did during his long tenure as MLB Commissioner, collegiate athletic leaders must come together and act in the best interests of college sports as a whole by safeguarding the participation opportunities enjoyed by millions of former, current and future athletes.
As a former Division III basketball player and athletic administrator, it pains me every time I see a sport cut, because I know how much my career as a student-athlete meant to me — not only in college, but also in the decades following. Unfortunately, more cuts appear inevitable, as lower-level Division I schools continue to bend under the pressures exerted by those schools at the top.
Ultimately, priorities, values and interests will guide each institution’s decisions on sport sponsorship. In many cases, this will lead to tough choices between competitive football and basketball teams, or broad-based athletic programs, and my only hope is that the interests of all student-athletes are put first.
Glenn Wong is the executive director of the Sports Law & Business Program and a Distinguished Professor of Practice (Sports Law) at Arizona State University’s Sandra Day O’Connor College of Law.
Credit: USA Today, Glenn Wong
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