While millions of fans lament the impending disappearance of college sports this fall, the coronavirus pandemic also exposes financial turmoil and a broken governance model that could provide the opportunity to irrevocably transform college sports programs for big dollars.
COVID-19 has shed the spotlight on some painful truths, particularly those of high-income college football – specifically that the billions generated through lucrative media contracts and in-conference networks have skewed the mission and incentives in this nonprofit education model, resulting in years of overspending Coach salaries and gold-plated sports facilities.
The lack of substantial reserve funds to cover these costs due to the “spend what we earn” mentality is reflected in the careful and fragmented decision-making process about whether to play football and let the TV money flow in the fall.
These high-income programs are part of the NCAA's Division I Football Bowl Subdivision (FBS) – a total of 130 football teams whose budget for the Athletics Department ranged from $ 16 million to $ 207 million in 2018. That 10-conference division includes the only college football teams that could still play this fall – a number that is dwindling day by day, with Tuesday's news that the Big Ten and Pac-12 conferences are the fall season have canceled.
Disjointed decision-making in an emergency
Meetings of the Board of Conference Presidents of each conference, may
Leave the viability of fall football hanging for days or weeks. The mess stands
as opposed to the Division I Football Championship Subdivision and all
Department II and III, which over 600 colleges and universities already have
canceled their fall championships, including soccer.
The Big Ten and Pac-12, along with the ACC, Big
12 and SEC are members of the TV revenue
Rich “Power 5” conferences that ultimately control the decisions for FBS College
The Power 5 would collectively lose more than $ 4 billion in football revenue to a mass cancellation, with each of its 65 programs losing an average of $ 62 million.
Power that contributes to the turbulence
5 soccer players are divided because they play this fall. Hundreds of players from the
Pac-12 and Big 10 are demanding that their conferences meet
their safety and other concerns while others have launched their own campaign
to support this fall.
Black athletes make up more than half of the soccer players at Power 5 conferences, and hospitalization rates for COVID-19 are about five times higher among black Americans than white Americans. Given the varied impact of the pandemic and the emerging questions about the potential long-term health complications of COVID-19, athletes are raising critical questions about the priority of racial justice, health and safety.
The lack of union
The college emphasizes leadership in decisions about a fall season
the broken and fragmented governance system of football. In contrast to March of the NCAA
Madness basketball tournament, the 10 conferences of the FBS manage their lucrative postseason championship – the
College Football Playoffs – regardless of the NCAA.
The NCAA canceled last spring
March Madness in a board meeting. In contrast, the presidents have and
The commissioners of each of the Power 5 conferences will be calling in the fall
Football on your own.
Outside of Power 5
Conferences, the vast majority of 1,200 nonprofit educational institutions in
The three divisions of the NCAA do not consider track and field programs to be money makers. Colleges
and universities fund athletics as an improvement in student life, much like providing it
Opportunities for students to participate in dance, theater, debates, or other events
Development and civic engagement. At the more than 400 schools in
Division III, one
Out of six students take part in university sports.
During the absence of the fall
Exercising at most NCAA institutions will not generate significant revenue
Deficits in ticket sales or media contracts can see the effects
in reduced tuition fees for many small colleges that depend on athletics
an enrollment tool for student recruitment.
At the other end of the
Spectrum, the Power 5 soccer programs created a financial structure that is “too big to fail”. The pandemic
should drive a radically reorganized way of doing business.
Incentives in FBS football
A rough feeling for that
Financial apocalypse that could result from the cancellation of football for all power
5 conferences (as opposed to postponing football to spring) can be held
from institutionally reported data collected for the knight
Commission for Intercollegiate Athletics, an independent group that we serve
has the legacy to influence the change in NCAA guidelines.
Patrick Rishe, director of
Washington University's St. Louis sports business program took advantage of ours
Database and other sources project that the Power 5 would lose more overall
than $ 4 billion in football revenue from a mass cancellation with each of its
65 programs lose an average of $ 62 million.
Our database shows the fixed costs
of the public Power 5 institutions (data for private institutions are not available) hold USD 7.4
Billions of athletics debt for which they collectively pay $ 578 million
annual debt service.
The same institutions also have contracts with highly paid
Trainers, for whom in many cases no force majeure clauses apply
Reductions during a crisis such as a pandemic. In 2018 this same 54
Institutions spent more
than $ 2.4 billion in coaching, administration, and human resources salaries.
The other half of the FBS conferences outside of Power 5 feature programs with varying financial realities. Two sources of funding that were heavily burdened during the pandemic – tuition fees and institutional support – account for 56% of these programs' budgets.
The cancellation of non-conference street games against Power 5 soccer teams in the preseason adds to their financial problems. Over the past few seasons, these games have delivered millions of dollars in guaranteed payouts that often represent 10% of budgeted revenue for the entire athletics division of these lower-resource programs.
At important meetings it is not yet clear whether FBS soccer games will take place
to be played this fall or spring, but what is clear is a new model for college
Sport should arise.
Too long, Division I and his FBS football
The model was shaped by skewed non-educational incentives to simply win
Games and increase the market share of television. At this moment of crisis, Department I.
College presidents have the opportunity to demonstrate courageous leadership. A
Post-pandemic model for college sports should be excessive spending and
Promotion of fiscal reason while at the same time creating incentives and new governance structures
This does more to help prioritize the education, health, safety, and safety of college athletes
Nancy Zimpher is retired Chancellor Emeritus of the State University of New York and Jonathan Mariner is a former executive vice president and CFO of Major League Baseball. Both are board members of the Knight Commission on Intercollegiate Athletics.