Wednesday, December 22, 2010

The Dominance and the Myth of College Football I & II

With Bowls cascading down and coaching blood leeting upon us, it's time to set back and take a look at college football. Interestingly the NCAA has kindly provided an MRI of its present state. The NCAA report on Revenues and Expenses: 2004-2009 for NCAA Division 1 Intercollegiate Athletics feels boring and dry.  But the report reveals the genetic makeup of modern athletic departments with its microscopic examination of NCAA finances. Three conclusions  leap from the report: 1) College Football dominates college athletics in a way nothing else does; 2) Colleges exist in a highly economically segregated world dominated by a very few wealthy programs; 3)  College football does not pay for the other sports, but often may take away from them.

Football remains the most desired,  watched and visible symbol of athletic prowess at the college level and probably in America. Schools that have no business being in the business continue to support money losing programs, and more schools grasp for  the perceived glory and visibility and launch football programs. Schools clamor to enter the Division 1 level much as they clamor to become certified AAU schools in academic circles. Yet the median loss for college sports programs is 12 million dollars and for midsize programs that have no real TV revenues, the subsidy/loss can approach 20 million dollars.

For senior college administrators, the general public and many students, being a recognized a Division 1 football power generates a high level of prestige and recognition. College football forges a brand identity for many schools. These values drive a school's desire to have football programs.  Too many people think a simple cost benefit analysis should explain college sports. It does not.  

Modern American universities inherited the anomaly of the wedding sports and universities, but the Presidents, students, alumni and media have exploited this in a way that being stewards of intercollegiate sports is now an  integral aspect of the culture of college life. It began a hundred years ago with breathless newspaper coverage of college events and the emergence of colors, nicknames, stadiums and rituals surrounding the games.

Many of the original college teams barnstormed as pros during the summer and went to school and played college ball in the autumn/winter.  By the thirties jokes about football and college could become a Marx Brother's staple as well as movies on college sport nobility and corruptions. This wedding grew from a deep Greek ideal  that perfection of  mind and body manifest a deep form of education of the soul.

Given the centrality of sports to university identity and community as well as marketing, the dominance of football is not surprising. For a decade college football has been the most avidly followed sport in America. On an average week 28 games will be televised. This intensity of interest dwarfs other college and professional interest. College football creates a perfect storm of identity for alumni but also geographic inhabitants that unites memory, identity and enjoyment of a truly fascinating and dangerous spectacle.

In Part II, I will discuss the economic implications of this for college programs.

The dominance and size of football matter even more given the overall condition of college sports. First, costs continue to outstrip revenue increases  by a rate of 6% to 14%.  The median "loss" or difference between revenue and giving and expenditures averages over 7  to 12 million dollars depending upon accounting tricks and grows at a rate of 9%.  The real loss/subsidy for mid size programs with no real TV contract and no strong endowments can approach 20 million dollars. Football accounts for the vast majority of the costs and losses. 

The football infrastructure is stunning. It requires a stadium that can only be used 6 times a year and has few other purposes. Although the NCAA publishes immense data proving that no correlation exists between facilities and winning, no one believes it and ten stadia have been built or refurbished in the last 5 years. Athletic administrators and Presidents refer to it correctly as an "arms race" they feel powerless to prevent. Check this map for a google maps overview of D1 stadiums.

Football  requires 80 scholarships which at an average school of cost of attendances of $20.000 is 2.4 million dollars.It must also provide uniforms and support for up to 105 student athletes. The 80 scholarships remains the equivalent of 6 basketball or volleyball teams or 12 mens' soccer teams.  It requires 11 coaches plus graduate assistants plus offensive and defense office coordinators plus video coordinators plus clerical staff plus 5 conditioning staff plus trainers plus half a dozen managers plus medical support, plus weight and conditioning room, plus travel arrangements to move a small army. (Just a minor anomaly, but at the ultra elite  programs the head coach's salary usually exceeds the entire scholarship expenditure by 2 million dollars.)

But the spectacle of football demands more, and most schools add on cheer groups that can amount to 20 people and bands that add another 70-200 people. This does not include the costs of maintaining the stadium and the informal work force needed for game days and managing parking and safety and concessions and broadcasting. Then you must police the tailgating and students, but the sobering reality for many programs remains half filled stands, very small TV contracts and money hemorrhaging programs. If D1 college football programs filled the stadium every game, they would still lose money and most do not come close to filling up their stadium.

The lopsided structure of football grows from two dimensions:

  • First the sheer size of the enterprise builds in its own momentum and creates its own stature and fixed costs. This is allied to tradition and age. Most athletic programs began with football and its visibility and importance was well established by 1920, so much so that it took Presidential intervention by President Theodore Roosevelt to clean up the sports corruption but also the killing fields that football had evolved into. He demanded reform, and the NCAA emerged from this. Today new universities claw for recognition and take the example of South Florida as a harbinger of success. Regional universities trying to gain prestige and compete with state flagships rush to seek football success as a way to imprint their identity.
  • Second the confluence of booster interest, student interest, money generation and above all potential TV exposure drives football. Basketball obviously offers much of the same at lower cost, but it cannot offer the sheer visibility spectacular dimensions and pride of place that football offers. For most athletic departments, dropping football  would be tantamount to an admission of failure and withdrawal from serious consideration as a sports school. More than a few struggle to add it on despite the data suggesting what a terrible bargain it is.

The football data highlights the nasty secret of football and college sport: the world segregates by the vast majority of haves-sort; some sort of haves; and a super elite of absurd abundance, rather like the modern U.S. wealth distribution system. A staggering 94 percent of college football programs lose money; their revenue streams do not cover the costs of the program. This refutes the often cited claim that football pays for the rest of the athletic program. In a very very very few programs, maybe 10, football may generate enough surplus to help support other college  sports, but in the vast majority of programs football programs vacuum up 85 percent of the expenditures and do not cover their costs.  

The ultra elite schools that generate profits live in a different fiscal and sport universe. At the University of Texas where they keep the number of sports low, the expenditure  per student for athletics is over 300,000. The average expenditure per student for Division 1 schools comes to 78.000 but that is median and ignores the distributional pull of the Texas, Georgie and Alabama schools who generate real surplus from football.  While all  the publicity focuses upon these schools, the drudging reality of the other 300 plus schools in Division 1 is that they lose money and football sucks up most of expenses and costs. 

It is a myth that football pays for the rest of the programs.  I cannot emphasize this enough. Football does not pay for the rest of the programs. In most of the mid level Division 1 programs, if anything, it puts a cap on the number of "olympic" sport because the football program takes up so much funding and fund raising. Under economic distress the need to keep football plus the escalating coaching salaries means that football costs push other sports to the periphery. Keeping football in most schools marginalizes other sports even more.   

The sheer scale of football and scholarships guarantees this reality. Given the economic climate today with huge cutbacks across the public universities, tuition raises of 9-14 % a year assures football will gobble up more and more of the funds. The "market" in football coaches guarantees that at the ultra-elite salaries for heads but also assistants will escalate even though the percentage devoted to salaries remains relatively stable. In some ways this hides the fact that often salaries may be off line in terms of TV shows, extra compensation for events and gifts that pad the salary but keep it off the university books. 

This tuition increase and salary escalation will continue. Interestingly the salary escalation has migrated to many Olympic sports. Bear in mind the Olympic sports never make money, will never make money, have no real professional rainbow at the end of the competitive rainbow for the student athletes, but  the raw nature of competitive athletes takes son its own dynamic.

With the emergence of national awards given to overall athletic excellence, athletic departments who are ferociously competitive, now invest heavily in emerging superstar coaches in sports like Lacrosse, Soccer, rowing etc. In its own way this is good to see the "minor" sports and men and women who dedicate their lives to student athletes get real compensation increases, but it also helps ensure that cost containment strategies will fail.

TV exposure, regional and institutional pride will continue the momentum of college sport and football. I believe college sports are a defensible moral and educational endeavor, but the economics of football make the entire world surreal and unsustainable for most schools. I don't see a solution, but we need to face the reality.


  1. As a former marching band member, I'm a little surprised to see the band lumped in as a mere football expense. My school would've had a band, anyway -- it was nice to have an actual crowd to see us perform.

    Ultimately, all of these things add to campus life, just like the campus art museum or the student union building. What to fund, as you say, is a tough decision.