[The following is an excerpt from Equal Play — Title IX and Social Change, a book edited by sports law professors Nancy Hogshead-Makar and Andrew Zimbalist. Hogshead-Makar is a professor at the Florida Coastal School of Law while Zimbalist is Robert A. Woods Professor of Economics at Smith College. This book can be purchased at http://www.temple.edu/tempress/titles/1831_reg.html]
The arms race is alive and well in athletics, but it has little to show for itself on the bottom line. The 2002 NCAA Revenues and Expenses study finds that of the 114 reporting DIA schools, the average athletic-department deficit was $600,000 in 2001. If one adds to this the average $1.425 million in student fees going to athletics and the $4.625 million in donations going to athletics, the stand-alone athletic department operating deficit averages $6.05 million. Even this number substantially understates the average subsidy to intercollegiate athletics at DIA schools.
The problem is that the one-sided incentives in DIA lead most schools to chase the Holy Grail of financial gain. But, like the NCAA itself, athletic departments are run by athletic directors, coaches, and conference commissioners who do not have to answer to stockholders and do not face the financial discipline of the marketplace. The consequence is endemic waste.
For example, DIA football does not need eighty-five scholarships. Sixty would do fine. NFL teams have forty-five roster, plus seven reserve, players. The average Division I-A team has thirty-two walk-ons plus eighty-five scholarship players. If football scholarships were cut to sixty, the average college would save approximately $750,000 annually, enough to finance more than two wrestling teams (whose average cost is $330,000 per team).
College coaches have protested that college football teams cannot be properly compared to professional teams. The latter, they say, can always call up reserves when players get injured, but college teams must have players on their rosters. This is a red herring. The NCAA Injury Surveillance System Summary reports that for the 2000-2001 season, the serious-injury rate during games in football was 14.1 per 1000 athletic exposures, while the rate in football practices was 1.6 in 1000. If we assume that sixty players enter a game and the team plays thirteen games during the year (i.e., including a postseason game), then the average total number of serious injuries (where a player is out seven or more days), from games is eleven per year. If on average each such player misses two games, then the average number of game-injured players is 1.69 per game.
Performing a similar computation for practice-injured players (assuming eighty exposures per practice, five practices per week, and fifteen weeks of practice) yields 9.6 injured players during the year. If each misses two games on average, then the average number of practice-injured players per game is 3.17. To be cautious, one can even double or triple this estimate and there would be fewer than seven or fewer than ten injured players per game. There is no justification here for having eighty-five grants-in-aid for a Division I-A football team, even if the average team did not have thirty-two walk-ons.
But why stop here? The NCAA should seek a congressional antitrust exemption with regard to coaches’ salaries. Currently, there are dozens of Division I- men’s basketball coaches who make over $1 million and some who make over $2 million annually, and there are dozens more football coaches in this category. Knock them down to $200,000 (which would still put them above 99 percent of the faculty) and colleges would be able to add another three to six sports, or, heaven forbid, reduce their large athletic deficits. Lest anyone think that these stratospheric coaches’ salaries are justified economically, let me remind you that economic theory predicts a coach will be paid a salary up to his marginal revenue product in a competitive labor market. That said, how can it be that the top-paid coaches in college football and men’s basketball get comparable compensation packages to each other when the average DIA football team has revenues fully three times as high as the average DIA basketball team? And, how can it be that the top dozen or two DIA football coaches get paid salaries similar to the NFL coaches, when the average NFL team has revenues more than ten times as high as the average DIA football team? These coaches’ compensation packages have more in common with the bloated stock option plans in Enron, WorldCom, and other corporations than they do with a competitive marketplace.
Coaches are reaping part of the value that is produced by their unpaid athletes. If unpaid athletes are subject to a restraint of trade because they are amateurs, then Congress should be willing to allow coaches’ salaries also to be restrained.
Other savings are available to athletic programs. Colleges going to bowl games might also consider reducing the size of their traveling entourages (Nebraska took a delegation of 826 to the Rose Bowl last year and spent $2.3 million), eliminating the practice of putting the men’s basketball and football teams up at a local hotel before home games, diminishing the size of coaching staffs, cutting the length of the playing season in many sports, and so on.
It is frequently argued that it is inappropriate for supporters of gender equity to attack waste in college football because, without football, athletic departments would have less money to fund women’s sports. First, when the proper and full accounting is done, this assertion – that football generates a large surplus – only holds for two or three dozen out of well over 500 football teams in the NCAA. Second, even for these two or three dozen teams that generate several million dollars of surplus for their athletic departments, there is no reason why they should not produce still larger surpluses by running a less extravagant and less wasteful program.
Let me conclude with a final comment about DIA football. One often hears that gender equity is fine, but football should be taken out of the equation – that is, remove football’s eighty-five scholarships and its operating budget before judging parity between men’s and women’s sports. There is no justification for such a policy. One might as well argue that women’s crew should be taken out before the gender participation numbers are compared. Title IX does not state that there shall be no gender discrimination where revenue generation is equal. It simply states that there shall be no gender discrimination – period. A sport’s presumed profitability is plainly not a relevant criterion. As stated in Article I of the NCAA Constitution, college sports are based on the principle of amateurism and the subordination of athletic to academic goals. As such, Division I and II schools benefit mightily from not directly paying their athletes, from tax exemptions on facility bonds, and from special tax treatment at UBIT income. Further, in 1984 the Supreme Court determined that the NCAA may legitimately restrain trade in many areas because, due to its amateur branding, college sports increase output and enhance consumer welfare. If college sports were to professionalize and separate out their football programs, using nonmatriculated athletes and paying them salaries and benefits, then there would be a case to eliminate football from gender-equity reckonings. As long as football benefits from the umbrellas of amateurism and the academy, however, the only rational course is to treat it the same as all sports programs for Title IX purposes.
In sum, the financial problem with college sports today is not Title IX or its implementation guidelines. The problem is waste.
