NCAA: The Power 5 Lies (4 of 4)
Updated: Apr 22, 2021
This post originally appeared on LinkedIn in an effort to help save Olympic Sports at the NCAA level. This is Part IV of a four part series.
This is the last in the Final Four series. Part 1: On why Olympic sports aren’t non-revenue; Part 2: Celebrating the academic success of students. Part 3: On going pro in something other than sports.
First a couple of side topics. I attended the Final Four this weekend – my 12th overall. I am proud of what the city pulled together. There was only a 0.05% positive test rate during the entire event and my personal observations were everyone involved did the best they could to maximize safety, yet still created an opportunity for fans to enjoy themselves. To the Baylor fans, I was impressed with your passion and how loud you were. IU fans – you can pay me to attend the Final Four for you. I am 3-0 on stopping undefeated teams. You’re welcome.
Second, this series may seem like it’s a knock on the "revenue sports" of football and basketball in particular. It is not intended to be at all. For those athletes, I support each and every one of you. Personally, I have no problem at all with the name, image and likeness (NIL) demands that you have. You should not be prohibited from making the most of your NIL; however, this is still only a handful of over 500,000 NCAA student athletes.
That said, do I think scholarships are worth it and are a form of compensation? I absolutely do. Those scholarships are like anything, what you choose to do with it is up to you. As mentioned in Part 3, so many of my teammates have maximized that value. However, I fully support changes to the model to make sure every athlete can maximize the value of a degree and not be pushed into one just so they can play a sport.
As I sat down to write this final article, as I reviewed the data, my anger grew and grew. Power 5 schools like Michigan State, Clemson, Minnesota, Stanford, and Iowa all want you to believe that they are is a dire financial crisis and need to cut sports. I am sorry,those are flat out lies.
From the Knight Commission on Intercollegiate Athletics College Athletics Financial Information (CAFI) Database the truth is they are awash in cash and have no financial management skills whatsoever that their very owntop business schools have taught us.
You mean to tell me that with a compound annual growth rate (CAGR) for total revenue of 6-12% and 125-230% total growth in revenues that Michigan State, Iowa, and Clemson somehow need to find more money and make cutbacks? [Redacted!!!] ANY ATHLETIC DIRECTOR WHO CANNOT MAKE THE NUMBERS WORK WITH THIS AMOUNT CASH AND REVENUE GROWTH SHOULD BE FIRED. PERIOD.
Making Olympic & other sports be the sacrificial lamb for your financial mismanagement is utterly disgraceful. Furthermore, at Michigan State the Board of Trustees was just presented a new student rec fee funded IM facility with an indoor 50M pool and at Clemson their Track & Field team is now ranked #15 in the country. As was stated in the initial article, the non-full scholarship athletes for Michigan State Swimming and Diving cover the cost of the program and generate $1.2M annually for the program.
On the university level it’s possibly even worse. Higher education has no financial discipline whatsoever. Michigan State’s total expense growth noted above was 4.7% per year since 2005 (what financial crisis?). As good business schools will tell you (I have two B1G degrees)…you cannot growth faster than GDP forever. Well…they are doing a good job of it so far! During the period of 2005 – 2014, GDP Growth was 3.62% and inflation was a tepid 2.0%. That may not seem like much but when you compound that differential over 14 years MSU expenses growing in line with GDP would only be $1.8B in 2019 and growing in inflation would only be $1.5billion or…$287M to $652M in excess expenses.
Finally, this is all occurring at a time when – according to the NCAA’s own data - Division II and Division III schools have increased sports sponsorship (i.e. # of programs offered) and participation considerably. As previously noted, at the Division II level athletes account for 18% of the student population and 27% at Division III schools. Furthermore, specific to swimming & diving and track & field, both sports have seen increased sponsorship and participation increase at the Division II and Division III level. Why? As was previously noted, they pay tuition! We are NOT “non-revenue sports!”
God willing, the newly appointed CFO at Michigan State, Lisa Frace, will bring some sanity to this utter madness and lack of financial discipline. In the interim, my proposal:
Separate Olympic & Other Sports: Let the “revenue sports” exist on their own and come up with a completely different model for evaluating these other sports. It will always be easier to fund raise via capital campaigns from big donors to cover football and basketball.
Holistic View: These athletes pay tuition, and the financial impact should be assessed based upon their overall impact to the university, not just athletics.
Hybrid Academic Scholarship Model: Many of these students perform at exceptionally high levels in the classroom. For those students maintaining significantly high GPAs, provide them with the academic scholarships they so rightly deserve in addition to pure athletic scholarships.
Fire the lawyers: It’s time to end the reign of the lawyers running Power 5 athletic departments. Hire financially sound and operationally focused management that can understand the holistic math and not just compliance.
Throughout my career I’ve never cared what other people got and was always focused on myself. The same is true here. I don’t care what football and basketball receive. Not at all. Have at it! Just keep your business to yourselves!
These athletes do not want or need to be lauded over. JUST LET THEM COMPETE! We love the sports we compete in and just want the opportunity to do so at the highest level – Division I. We excel in the classroom. And God knows…we do very well “going pro in something other than sports.” Stop the madness.
Mark Emmert – the offer’s still open. Now where is Big Ten Commissioner Kevin Warren….