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Universities Weighing Impact of Football on Finances

When The University of Alabama at Birmingham (UAB) announced June 1 that there would be gridiron games this fall, many around the country were perplexed — and many others thrilled by the obvious victory for the sport that is a way of life in Alabama.

The announcement came six months after President Ray Watts declared the end of the program. Keeping football on campus, it was decided then, was too expensive and took too much away from the rest of the campus — 67 percent of the $30 million budget came from the university’s school funds and student fees. ­This also was a school in one of the smaller Football Bowl Subdivision conferences, Conference USA.

Watts said that, after hiring a consultant, who projected that fielding a competitive team would cost $49 million over the next five years, “there was no way for us to cover that unless we took away from education and research and health care.”

But after rallying cries from students, alumni and the Birmingham community, the school caved and announced it would field a team for the 2015 season after all.

And so, the team will return to the field in a conference in which a school cannot compete in any sport if it does not field a football team. ­The university will cap subsidies from the general fund at $14.49 million for each of the next five years ($200,000 less than the 2015 subsidy amount) and the City of Birmingham, UAB’s National Alumni Society and the student government have all pledged to do their parts to chip in to make up the difference.

Football 1, University Budgets 0

UAB is not alone in this quandary over athletics.

According to Dr. Earl Smith, professor emeritus of sociology at Wake Forest University who has focused largely on the sociology of sport throughout his career, “It is a commonly held myth that the so-called ‘revenue-generating sports’ of football and men’s basketball make a profit and even pay for the other ‘lesser’ sports like women’s softball, volleyball, and track and field. ­Though some sports generate revenue, very few … generate profit.”

In fact, of the 128 Division I football programs, only seven finish debt-free year after year, according to the Knight Commission on Intercollegiate Athletics.

“At the nation’s most prominent universities, intercollegiate athletics have always played a dual role in campus life,” according to a Knight Commission report. “On the one hand, they are managed for the benefit of student-athletes. On the other, they inspire the interest and passions of thousands, if not millions, of fans. For most teams at most institutions, these roles can be reconciled. But in high-profile sports, tensions often surface between the core mission of universities and commercial values.”

Smith says that, in many cases, athletics drive the bus at schools classified for their research and scholarship.

“Faculty members, who are the primary drivers of the commodity that is produced in colleges and universities — an education — have salaries that pale in comparison to athletic staff, go years without raises and yet are the very labor power that keeps the student-athletes academically eligible,” he says. “Many campuses are in serious need of upgrading their facilities, particularly modernizing classrooms with the technology necessary to effectively deliver education.”

“Nevertheless, the pursuit of those elusive goals [of fielding a team whose television revenues and ticket sales generate enough money for the program to profit] by many programs creates a cost spiral that causes athletics spending to rise at rates often exceeding those on academic spending,” continued the report. “At many universities, institutional spending on high-profile sports is growing at double or triple the pace of spending on academics.”

But Dr. William Broussard, who has served as an athletics administrator for two small Division I schools, Northwestern State University and, most recently, Southern University, says the allure of playing at the Division I level is one that keeps teams trying to step up to the plate.

“NCAA distributions, allocated to support gender equity and academic support initiatives, translate into hundreds of thousands of dollars in support of student-athlete success,” says Broussard. For Southern and other historically Black colleges in the Mideastern Atlantic Conference (MEAC) and Southwestern Atlantic Conference (SWAC), the numbers are even greater. On top of the broad NCAA distributions for which these schools are eligible, he adds, there are additional competitive grant programs for extra support for which 80 percent of the teams are eligible.

Revenue vs. profit

Broussard acknowledges that “many decry the HBCU pursuit of NCAA Division I excellence because of funding disparities which create competitive gulfs between them and PWIs,” but said “there are notable benefits to [the] continued pursuit” of competition at the Division I level.

“The revenues available via guarantee games, NCAA postseason competition, SWAC/MEAC distributions, and exposure for our institutions via regional and national television audiences are invaluable to the growth of our institutions and their ability to recruit,” he says.

But Smith is not so easily convinced.

“In the current climate of conference re-alignment and the excitement of Cinderellas and March Madness, it is easy to envision what it would be like to increase the visibility and perhaps competitiveness of an athletic program playing in a mid-major conference,” Smith says. “But making this type of move without seriously considering the financial implications will likely result in aborted missions, like in the case of Appalachian State; regression, as was the case with Winston-Salem State; or near bankruptcy, as was the case with The University of Alabama [at] Birmingham.”

For smaller schools, the decision of whether to field a football team could literally mean a decision of whether to keep the doors of the campus open.

Paul Quinn College President Michael Sorrell tells audiences across the country that his decision to cut the program at the tiny Dallas school was a no-brainer.

At a school where 80 percent of the roughly 250 students are Pell Grant eligible, Sorrell has often said he could not economically justify spending $600,000 on a losing program that was not generating any revenue.

Smith says the trend of overspending to “keep up with the Joneses” could be the end of all sports on campus.

“The fact that the so-called ‘money sports’ of football and men’s basketball extract more money than any other single entity on campus — without turning a profit,” he says, “may eventually lead to a death knell for college athletics.”

Staff writer Autumn Arnett can be reached at [email protected].

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