Athletics – Why and At What Cost?

December 2011
Dr. Tony Frank

As a university president, I receive input on a wide array of topics, and recently it seems college athletics is on the front burner. We have local issues, but much of what I'm hearing from people inside and outside the university is related to broader issues of college sports — the money, the control, the impact on our reputations, the need for such programs — and the need for such programs to "be good." This interest is not, I think because of the upcoming football bowl season or the start of the journey to the next "March Madness" — although the popularity of these events is a factor in much of what is currently drawing attention.

Vision, role and mission of sports at our universities

No, I would argue attention is drawn by the current, constant reshuffling of athletic conferences (and the attendant legal action), the large sums of money involved (especially around television revenues for football), and a spate of scandals, at least one of which has defined an entirely new category of athletic scandal for us all to worry about. But perhaps these events can serve a purpose if we use them as a cause to reflect upon the vision, role, and mission of sports at our universities.

I think most of us understand the opportunities college athletics provide for our student athletes and the character building that accompanies them. The benefits of entertainment, alumni connections, and student life are similarly readily observed and grasped. What is less clear is the institutional reputational and fiscal impact of our sports.

Let's deal first with reputation. On one end of the spectrum of reputational impact are schools whose reputations have clearly been tarnished by athletic scandals; on the other end are universities whose reputations have clearly been elevated above what they have academically earned by the sustained breadth of quality of athletic programs. There are no shortage of schools somewhere in the middle of this spectrum and not a small number of outliers. But I imagine that in every school’s analysis of athletics, impact on reputation is a big factor.

Reputations are tricky, subjective things. They are easy to classify as subjective and under-informed by deferring to detailed data. By such data-driven standards, CSU has much to be proud of, particularly when outcomes are compared after a correction for institutional size and/or budgets. But such comparisons typically reside in complicated databases accessed by those of us inside the academic profession. Their cousin, independent third-party ranking systems, are more accessible to the public, but fail to correct for size or funding, and you see institutional reputation (subjectively determined) as a key parameter in such rankings. Now, we tend to dismiss ranking systems at public universities with an argument that goes something like this: Our quality is supported by data, our product is in high demand, and our mission, to provide a great education to the children of citizens of our state, has historically placed us above the fray of competition for "customers."

Consumers use rankings to choose educational institutions

But I have to say that after a dozen years of building university budgets, watching changes in public education funding, watching the universities that are thriving and those that are stagnant or struggling, I am very uneasy about our willingness to ignore ranking systems by arguing the methodology is flawed. Flawed or not, consumers use such comparisons to help them choose an educational institution and we are, for good or ill, dependent on enrollment and tuition that flow from such choices to sustain our quality, to deliver upon our mission, and even to survive. And I would guess, although I don’t have data to support this, that only a minority of people use even the flawed ranking systems while a large majority uses, to one extent or another, totally subjective reputation in selecting a college.

I'm not sure there isn't rationality behind the use of subjective reputation in a university selection process. Consider the majority of our students at Colorado State: They have options to attend lower cost schools, and the vast majority has the ability to attend institutions costing significantly more. As sophisticated consumers in an educational marketplace, they weigh costs against value. And the value of a college diploma contains a large, subjective component based on reputation of the institution granting the diploma. While interviews and, later in life, work experiences and references may mitigate the impact of institutional reputation, there is no reasonable argument against reputation being a part of what students who select us are buying into. For this reason, the faculty member in the National Academy of Sciences improves the value of the CSU degree for the student in a different major who never had that professor in class. And not only students pay attention to institutional reputation. Who among us hasn’t, as we started our academic careers, perused position advertisements and been at least a little attracted to an elite university even if the position or program fit wasn't exactly what we were after?

In short, reputation matters in many important ways, even if it's difficult to quantify.

How much does athletics influence a university's reputation?

Returning to athletics then, we have the question of how much athletics influences a university's reputation. If anything, this is even harder to estimate — leaving aside some notable outliers: Fine academic institutions who are tarnished by scandal and institutions of such renown that athletics really doesn’t impact significantly on reputation. In between these ends of the spectrum, one can find universities whose reputations have clearly been enhanced by athletics, institutions who are neither significantly helped nor harmed by their athletic programs, and institutions whose public reputation may not be as strong as objectively warranted — in fact, it may be limited because, correctly or incorrectly, a sense of excellence is missing from the athletic programs that are so often the most visible side of the university to the public.

The simplest observation from these reflections is trivial: All things being equal and with no risks, any university would likely choose to have highly successful athletics programs. But clearly this path has challenges — scandal, integrity, and funding being among the most obvious. One of the things we are proudest of in regard to CSU athletics is that our university integrity is reflected in our athletic programs. We are one of only 17 universities never to have had a major NCAA violation. We're also proud that we’ve kept the 'student' in student-athletes, graduating our student-athletes at rates that exceed our general student population.

Fiscal impact of sports on our universities

Athletic funding is a complex topic; it returns us to the fiscal impact of sports on our universities. As president, I receive input from people who believe a dime spent outside the classroom is a dime wasted and input from others who believe we simply have to spend more on Ram Athletics for the good of the university. Both groups have the best interests of the university at heart and both highlight, to me, the value of the middle ground. But what are the facts related to athletics funding?

CSU spends around $25M on college athletics each year. The sources of that funding are ticket sales and game day revenues ($3.6M, 14%), revenues related to television and conference distributions ($3M, 12%), merchandise sales and logo licensing ($2.1M, 8%), directed donor support ($2.5M, 10%), a dedicated student athletic fee of $103.85/student/semester ($4.8M, 19%) and the university general fund ($9.6M, 38% — this includes $1.9M of in-kind value, utilities, and the like). If one combines the student fee and the university general fund, it’s reasonable to say we spend $14.4M of public funds (tuition and fees are classified as public funds once they arrive at the university) on athletics. That's a lot of money that could be used for other things.

But let's put some context around this. Athletics also pays the university more than $6M annually in tuition and fees and other costs for their scholarship athletes. If we set aside last year's payments from athletics into an account to fund our direct institutional support for athletics this year, we would have covered well over 90%. Then there is the context of the national market. Now, I am keenly aware of the pitfalls of saying we have to do something because everyone else is (I was never able to convince my mother of that logic and she was probably right), but benchmarking is a useful management tool. Of the six public universities in the Mountain West Conference in 2010 (the last year for which I have comparative data), CSU's athletic budget was 6th, at 30% below the average (mean). We were 4th in university support and 2nd in student fees. If those sources are combined as "public funding," we were 3rd. Where we really fall behind are in ticket sales and game day revenues, royalties and licensing, TV distributions, and private fund raising. And it's worth noting that the MWC is certainly not the highest spending conference in division I athletics.

Is there a correlation between spending and success?

But any conversation on funding should raise the following question: Is there a correlation between spending and success? I think a scatter plot of those data leads one to conclude that spending more is no guarantee of success, but its uncommon to find successful programs that aren’t spending at least somewhere around a national norm.

Five components of success in athletics

And while spending doesn't guarantee success, such calculus is made more complex by definitional issues: How do we wish to define success? I'd submit that success has five components — only one of which we usually pay attention to.

  1. First, we succeed when we run clean athletics programs. CSU has always succeeded in this area.
  2. Second, we succeed when our student-athletes are successful students and graduate. CSU is successful here as well.
  3. Third, a program is successful when it lives within a budget appropriate to the university culture and the times. While some would argue this third point in both directions, I think it's hard to sustain the argument that we haven't done this — albeit at the lower end of this range.
  4. Fourth, athletics are successful at a university when they build traditions that students, alumni, and fans cherish. I think an objective analysis gives us a pretty mixed grade on this one.
  5. And finally, programs are successful when they are competitive in the win-loss column. I'm not talking here about any given year — but over a sustained period of time, are we being competitive? I think this area gives us some room for improvement, and improvement here is likely to help build our traditions as well.

So where does all this leave us? There are those who argue CSU should spend less on athletics and consider a move to Division II or even dropping athletics altogether. There are those who argue CSU has to spend at a level commensurate with much larger institutions. I think both of these approaches miss a viable middle ground.

As the economy recovers (and our university continues to grow), I think we can reasonably see ways to invest modestly in our athletics programs without such investments being at the expense of growth in academic funding. We've made modest, one-time funding investments, some from restricted-use fund sources, at Hughes Stadium and Moby Arena. I think we need to continue to look to various sources of non-public funds to further enhance our facilities and our program budgets. And beyond recruiting, think of the impact that a privately funded football stadium on our campus would have on attracting people to our wonderful campus, engaging students, reconnecting alumni, and boosting the local economy.

Top research and educational programs; same model for athletics?

And so we arrive at the nexus of funding and expectations for success. Winning is not a bargain at any cost. Colorado State must and will maintain its commitment to clean programs, the success of student-athletes, and appropriate funding levels. But at the end of the day, I just don't accept that this position confines us to sporadic success on the courts and playing fields. We pride ourselves at CSU on the quality of our programs — and our research and education metrics place us among the very top universities in the nation when we account for size and funding. Why can't we follow this same model in athletics? Should we be willing to accept something less than excellence in one area when we never settle in the others? Is there a reason that a research model of incentives, effective strategic hiring and retention, modest institutional support, and exceptional success translating into extramural funding can’t also be applied to athletics?

Of course such statements are easy to make but difficult to translate into significant and sustained progress. Still, we have a record at CSU of doing such things. Our exceptional research programs and funding levels weren't built overnight. We didn't close our ethnicity-based graduation rate gap to one of the lowest in the nation by thinking we didn't have the funding. We haven't set aggressive goals for graduation improvements, succeeded at our first major fund-raising campaign, or improved our university's reputation during the worst financial crisis of our lifetimes by saying these challenges would be too hard for us.

CSU needs successful athletics programs

So at the end of the day (or at least at the end of these musings), I wind up thinking CSU — including its reputation — needs successful athletics programs. I believe we can have clean programs that graduate student-athletes and win without breaking our funding models. I believe attaining this will cause us to have to dream big, work hard, and settle for nothing less than excellence. But that combination, I think, is exactly what has made CSU the place we are all so very proud to be a part of today.