Why doesn’t the University help?

Issues between universities and their athletic departments is nothing new, but since the COVID-19 pandemic hit earlier this year, those issues have intensified and become even more complex.

The pandemic has had a major impact (financial and otherwise) on college sports, and caused schools to undertake some drastic cost-cutting measures. According to NBC News, 26 Division I schools have cut more than 90 sports programs this calendar year alone. These cuts have affected more than 1,500 student-athletes.

These cuts have clearly made an impact, but are the effects of the pandemic and subsequent sports program cuts considered significant to all involved?

The relative importance of sports in the world of higher education has long been debated, and that debate has never been more of a hot-button topic than it is now.

While difficult to quantify, college athletics are the “front porch” of many schools — they affect the perception of the school and the student experience, thereby attracting students to enroll and remain at the school in many instances.

If college sports programs contribute to the school as a whole, why are schools cutting budgets and programs, rather than assisting athletic departments in their time of need?

One issue is that athletic departments are a separate entity from their universities in terms of budgets and finances, so normally, schools don’t like to cross the line between the two. However, the pandemic and its consequences are far from a normal situation, and schools have the ability to use a portion of their funds to assist their athletic departments if they choose to do so.

It is a well-known fact that a vast majority of colleges and universities have large endowment funds at their disposal, which would appear to be a potential key component to solving the problem of sports funding at higher learning institutions.

Harvard has the largest endowment fund in the nation at about $41 billion, while the average among 354 schools studied was $1.4 billion (per US News and World Report). That is a great deal of money, but how easy is it for schools to use their endowment funds for a purpose such as assisting their athletic departments? The answer is not a simple one.

According to a study done by the Association of American Universities, approximately 22 percent of endowment assets at public universities can be utilized without restriction; the remaining 78 percent are earmarked for specific uses according to parameters required by the donors.

Furthermore, schools invest funds from these sizable endowments to generate interest, and that interest income is used to fund projects that the original investors were interested in contributing to, and others as well.

Schools are hesitant to touch the endowment principle, as this would negatively impact future investment earnings (multiple sources report this common use of endowment funds including the Fort Worth Star-Telegram and ESPN).

Opponents of costly sports programs might argue that the schools are already giving their athletic departments a great deal of assistance in the form of scholarships, but a closer look reveals that the impact of this is much less than it first appears.

Banner Society reports that scholarships are estimated to cost $50,000 per athlete (median total per school set at around $6 million, per the NCAA), but that’s not the actual cost. Economist Andy Schwarz says the true cost of athletic scholarships is “pennies (or at least dimes) on the dollar of the listed cost” because student-athletes are almost never filling a spot that a regular student could take if the athlete wasn’t there.

We’ve discussed some of the reasons that it is not a straight-forward process for schools to provide subsidies to their athletic departments, but that does not in any way imply that they can’t choose to do this — it’s typically a matter of priorities.

The Ivy League, an athletic conference composed of a group of elite academic institutions, has always been very transparent about their priorities when it comes to sports.

The Ivy League made the decision to cancel all fall and winter sports in the wake of the pandemic, and they made that decision very early in the process. These actions are very consistent with their general philosophy that sports programs are elective and not a high priority in the overall scheme of things.

Most other conferences and schools, however, consider their sports programs important from a marketing standpoint and even set specific in-house goals of winning conference titles and national championships.

Many of the sports programs that are being eliminated also happen to be Olympic sports. Universities have long been a key part of the feeder system that produces Olympic athletes, so a continuing trend of cutting Olympic sports programs will have a huge negative impact on the number and quality of athletes we have available to our Olympic teams.

Success in the Olympic Games is not only a source of national pride, but very much a source of pride for the schools that produce athletes who compete and perform well in the Olympics.

Let’s take a look at an example of a school that could have made the decision to assist their athletic department, but chose instead to cut a significant number of sports programs.

Stanford has cut 11 sports programs this year, by far the most in the nation. The school’s endowment fund is listed as the third-largest in the country, worth an estimated $27.7 billion.

According to Stanford athletic director Bernard Muir, the athletic department stands to lose about $25 million during the 2021 fiscal year, about half of which is a direct result of the pandemic (per The Mercury News).

Using percentages from the endowment study referenced above, Stanford has an estimated $6.1 billion in unrestricted endowment assets at their disposal. Put another way, that’s $6,100 million, against a projected athletic department shortfall of $25 million, which is 0.4% of the unrestricted endowment fund.

The question of whether or not Stanford could have chosen to provide assistance to their athletic department seems to have an obvious answer; they simply decided to eliminate 11 sports programs instead.

The school tied for the next-most sports programs cut (seven) is George Washington University. This school has a more modest endowment ($1.8 billion) compared to that of Stanford, but it is still sizable and above average for public universities in the United States.

When the school announced their decision to eliminate seven sports programs, they emphasized that the institution as a whole is projected to have a $200 million shortfall during the upcoming fiscal year, but no data was offered as to how much of that was due to the athletic department.

Extensive research did not turn up any information on the projected athletic department losses at George Washington. It is likely that such projections were made internally, but were not made public since the numbers would have been very small compared to the projected overall shortfall.

Releasing the projected losses for the athletic department alone would have greatly weakened the school’s public justification as to why they felt the need to cut seven sports programs, so in essence, this was a public relations “spin” by the school.

What this all comes down to is this: why is there such conflict between university administrations and their athletic departments? After all, shouldn’t they be cooperating with each other to ensure that their relationship is mutually beneficial?

In his book College Sports, Inc.: The Athletic Department vs. the University (published in 1990), author Murray Sperber discusses the problems involved in college athletics with a slant toward school administrations. Sperber criticizes intercollegiate athletics as commercial entertainment and not a part of the mission of higher education.

He goes on to conclude that antagonism, mistrust, ethical concerns, commercialism, and a perceived lack of control are the primary factors as to why there is so little cooperation between university administrations and their athletic departments.

Another entity that takes a similar stance and has a stated mission of athletic program reform is the Knight Commission on Intercollegiate Athletics. This commission is made up of academic and sports leaders who aim to keep college athletic departments operating in a manner that is consistent with the academic missions of the schools.

In fact, the Knight Commission just released a year-long study where they concluded that FBS college football should be removed from the governance of the NCAA. The commission proposes that top-level college football should have its own governing body, completely separate from the NCAA.

In our opinion, lack of singular leadership is the crux of the problem. The schools’ administrators tend to be protective of their interests that are separate from the athletic departments, and as a result, leadership within the athletic departments have to follow suit.

This “us versus them” mentality causes schools and their athletic departments to be at odds, rather than working together toward a common goal. Until this is addressed, universities and their athletic departments will continue to have a contentious relationship that hurts everyone involved.