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May 12, 2009 - Knight Commission Urges College Leaders to Consider Bold, Innovative Solutions to Address Fiscal Health of College Sports

WASHINGTON, D.C. - The financial crisis in college sports isn't attributable only to the ongoing recession, but also to declining athletics revenues unable to keep up with a runaway train of spending. That's what members of the Knight Commission on Intercollegiate Athletics heard today from scholars and experts on higher education and intercollegiate sports.

 

"The recession is accelerating the need to make hard choices about college athletics, but the fundamental problems will not abate when the economy improves," said R. Gerald Turner, co-chairman of the Knight Commission and president of Southern Methodist University. "The struggling economy presents a prime climate for all stakeholders in college sports to take action. Through innovative solutions, we can take measures to reign in ever-increasing athletics spending and preserve all that is good about college sports."

 

The Commission's meeting in Washington, D.C. was its second public discussion in a year-long examination of the economics of big-time college sports. The Commission's goals include investigating the trend of increased spending on athletics as university budgets shrink, as well as proposing solutions to what seems like an unsustainable economic model.

 

As part of its efforts, the Commission is conducting a survey of presidents at Football Bowl Subdivision (FBS) institutions, once known as Division I-A football programs. The survey is gathering the presidents' opinions on athletics finances at their schools and for the FBS as a whole.

 

Knight Commission co-chairman William E. (Brit) Kirwan, Chancellor of the University System of Maryland, noted the strong response from presidents at FBS institutions, adding, "The survey findings will be very useful in developing bold policy changes for higher education leadership to consider." The Commission plans to release the presidential survey results in early September.

 

Kirwan noted a wealth of recent data developed by the NCAA confirming that athletics expenses are growing at two to three times the rate of total spending for universities.

 

"We need to do more to make NCAA data clear and transparent to university trustees, alumni and the general public, so they can have a better understanding of the fundamental problems," Kirwan said. "Better data and more transparency helps us debunk the myths that have led to excessive spending on coaches salaries and other areas of intercollegiate athletics."

 

Only six FBS athletics departments had positive net revenues for each of the past five years, according to the NCAA. The NCAA study also debunked the myth that high coaches salaries are connected to increased winning percentages.

 

Andy Geiger, former athletics director at The Ohio State University, Stanford University and University of Maryland, emphasized that 50 percent of athletics spending is for coaches, staff, and scholarships, which are all areas for potential cost-saving measures as the Commission looks at spending solutions. He said that significant change is unlikely until administrators have the will to address those expenditures.

 

The Commission also heard testimony from University of Arizona professor and researcher John Cheslock on participation trends in Division I varsity sports. Cheslock pointed out that while male participation has declined in programs that compete in the Football Bowl Subdivision, male participation has remained relatively flat in all other Division I programs. Penn State Athletics Director Tim Curley said that supporting broad-based programming is becoming increasingly difficult for Division I programs as competitors put more resources into fewer programs.

 

John Colombo, University of Illinois tax law professor, presented a paper that explained how it would be difficult to remove tax-exempt status from "big-time college" football and basketball programs. Colombo argued, however, that Congressional action would be justified in attaching special limitations on athletics programs, such as restricting expenditures and/or mandating disclosures so that programs could continue to receive "tax-favored status."

 

Knight Commission co-chairman Kirwan said, "While we generally don't believe that Congressional action is necessary to regulate intercollegiate athletics, we are not ready to dismiss any proposals that could provide effective means to address our challenging financial problems."

 

The Commission will meet again in Miami, Fla., on Oct. 26 to commemorate the 20th anniversary of its founding and to continue its examination of financial issues and potential solutions.

 

Complete bios and pictures of Commission members can be found at www.knightcommission.org. Photographs from the meeting are accessible at www.flickr.com/photos/kcia. The meeting sessions will be accessible via podcast on the Commission's website on May 14.

 

Multimedia Files

Powerpoint of John Cheslock presentation. Audio podcast of the first session (mp3, rss podcast), “Sports participation and sports sponsorship in Division I intercollegiate athletics: How has participation and sponsorship changed over time? How have financial pressures contributed to these changes?" Featuring panelists: John Cheslock, Associate Professor in the Center for the Study of Higher Education, University of Arizona; and, Tim Curley, Athletic Director at Pennsylvania State University.""

Paper from John Colombo. Audio podcast  of the second session (mp3, rss podcast), “Financial challenges in intercollegiate athletics: New stratgies for fiscal responsibility in the changing landscape in higher education and intercollegiate athletics" Featuring panelists: Andy Geiger, former athletics director at Ohio State University, University of Maryland, and Stanford University; John Colombo, Professor at the University of Illinois College of Law; and, Robert Zemsky, chair of The Learning Alliance for Higher Education.

 

Photos