I. Requiring greater transparency, including better measures to compare athletics spending to academic spending
Real long-term progress in athletics financing across all NCAA Division I institutions requires the availability of clear, comparable, and complete financial data, together with strategies to improve accountability.
All Division I institutions should publish accurate and comparable information about revenues and expenses in athletics every year.
Because of the large role facilities expansion and debt play in athletics spending, we believe that these new public financial reports should compare capital debt in athletics to overall institutional capital debt.
- Make NCAA financial reports public. These standardized reports on athletics spending and revenues are already used by the NCAA to provide presidents and chancellors with a set of metrics in the form of “dashboard indicators” to assess their athletics programs’ financial health and their revenue and expense patterns relative to peer institutions. However, these institutional data are rarely seen by the general public.
Colleges are also required to file separate financial and participation reports annually with the U.S. Department of Education in compliance with the Equity in Athletics Disclosure Act of 1994. But the financial data in these reports lack comparability because the law requires colleges to report information in overly broad categories, permitting wide variation from institution to institution.
We recognize that data in the NCAA’s standardized reports are not perfect. For example, they do not account for varying budget treatment of tuition waivers for scholarship athletes, which can make it difficult to compare spending between institutions. However, these audited reports represent the most accurate athletics financial reports available and, as such, the data should be publicly reported. The NCAA should work with outside auditors to improve the accuracy and campus-to-campus comparability of the NCAA financial reports and the summary indicators they produce. Updates and modifications to the reports and indicators should be made regularly as needed.
Publish additional information about long-term debt and capital spending. Because of the large role facilities expansion and debt play in athletics spending, we believe that these new public financial reports should compare capital debt in athletics to overall institutional capital debt. They should also compare annual athletics debt service to overall operating expenses in athletics. Such comparisons would usefully illustrate the level of risk to the long-term financial security of the university if there is a downturn in the athletics revenues that cover debt service payments.
After all, at a time when all of U.S. higher education is under unprecedented pressure to be more transparent to the public and more accountable for the results it achieves, intercollegiate athletics cannot expect to be immune to the same standards.
Report annually on growth rates in academics and athletics spending. Each institution should publish comparisons of the growth rate in athletics spending and in education-related spending, both calculated using improved assessment measures.
B. Strengthened oversight
Along with implementation of the transparency agenda outlined above, institutions that fail to give precedence to core academic values over athletics goals must face more substantial consequences. We recommend the following:
Reform the NCAA Division I certification process. In 2004, the NCAA dropped financial integrity as a principle in certification. We strongly recommend its reinstatement. Specifically, the certification process should require colleges to evaluate their athletics programs along the lines recommended in this report.
Strengthen accreditation. Regional accreditation should include an assessment of institutional and overall spending on intercollegiate athletics, including studies of how institutions oversee and regulate athletics expenditures.
Reinforce board responsibilities. College and university trustees also play a key role in ensuring the integrity of athletics programs. The Commission reiterates its endorsement of a 2007 report by the Association of Governing Boards. Among the guidelines for oversight boards to follow, the report called for close attention to the appropriate level of revenues and spending on athletics; to transparency and accountability; and to whether academic values are properly reflected in spending decisions.