Playoffs Not the Answer to College Football’s Financial Crisis

This opinion by Knight Commission co-chairs, William “Brit” Kirwan and R. Gerald Turner, was published in the December 19, 2009, edition of the Washington Post.

The college football bowl season begins today, with 34 games scheduled from Dec. 19 to Jan. 7. We expect to hear renewed calls from journalists, fans and politicians for a big-time college football playoff. A panel of the U.S. House Energy and Commerce Committee recently moved forward with legislation that is designed to change the current football postseason structure and force a playoff, leaving some with the impression that a playoff is the most important issue facing the 120 college presidents who control major college football. It is not.

The real crisis facing college athletics is the sustainability of its business model, which is on a path toward meltdown. The core of any debate about major-college football must be about the need to develop a business model consistent with the economic realities of our time and that would benefit student-athletes and educational institutions alike.

The 120 athletic programs that sponsor major-college football — once known as Division I-A, now called the Football Bowl Subdivision or FBS — comprise a multi-billion-dollar enterprise. Despite the influx of significant revenue, including cash from bowl games, television contracts and ticket sales, nearly all programs are heavily subsidized by the universities through student fees, allocations from general funds and even state appropriations.

In the 2007-08 school year, nearly 80 percent of major athletic programs reported operating deficits, with programs in the red losing an average of $9.9 million, according to the National Collegiate Athletic Association. Add the recession, which has affected state appropriations and private giving at most colleges and universities, and college sports face unprecedented economic challenges.

A recent NCAA report noted that even football-generated revenue does not cover the operating cost of the football team at 44 percent of the institutions playing major-college football. Such figures would be worse if the millions in debt for stadium improvements and other facility enhancements were included. These are hardly profit centers at most institutions.

Now, consider all this in an environment where athletics costs are escalating at all but a few institutions while academic budgets are being cut and student fees and tuition are being raised. NCAA data show that the rate of increase in athletics spending in Division I programs is three to four times greater than the rate of increase for academic budgets. That is neither acceptable nor sustainable.

Whatever its other merits or disadvantages, a college football playoff would not solve these financial problems because without underlying reforms, added revenue would merely translate into higher coaches’ salaries, facility expansions and more personnel. Recent history bears this out. Since the 12th football game was added permanently to the schedule in the 2006 season, only one additional football program has generated positive net revenue. Meanwhile, the average salary for head football coaches has increased 46 percent, to $1.36 million, according to a recent USA Today report, and the average budget deficit for 80 percent of the athletic programs has risen 11 percent, to nearly $10 million.

Change cannot come from the decree of one or two courageous university presidents. This was shown by the collective successful efforts for academic reform in college sports 20 years ago and confirmed more recently in a survey conducted by the Knight Commission on Intercollegiate Athletics (which we co-chair). Fewer than a quarter of FBS presidents interviewed for the survey– which was released last month — believe that big-time intercollegiate athletics are sustainable in their current form nationally. They also said they have limited power to make substantive change acting alone.

We recognize that change can come only from collaborative actions, some of which may prove unpopular on some campuses. The first step will need to be true transparency regarding athletic spending.

The Knight Commission is collaborating with leaders in higher education as well as athletic directors to develop a reform agenda that will address the unsustainable growth in major college sports expenditures. All who care about the role of intercollegiate athletics within the academic enterprise, should agree that both data and common sense point to the need for immediate reform. Neither enhanced media contracts nor a football playoff can solve the systemic financial problems facing the nation’s most visible collegiate athletic programs. Serious, sensible fiscal reform will.

William E. “Brit” Kirwan is chancellor of the University System of Maryland. R. Gerald Turner is president of Southern Methodist University in Dallas. They co-chair the Knight Commission on Intercollegiate Athletics.