Are NCAA BCS Athletic Budgets Too High?

Last month, the Knight Commission released a president survey in regard to NCAA athletic budget spending. The report indicates that NCAA presidents (at BCS universities) are concerned about the amount of money that athletic departments are spending, with both quantitative and qualitative survey results presented.

One of the things that is striking to me about looking at NCAA athletic department spending at BCS universities is that they really are missing the big picture. It is not really athletic department spending, but rather athletic department net revenues (profits) that really matter. If a BCS school spends $300 million a year, that is really only a problem if the athletic department does not generate at least that much money that year. Really, the question about athletic budgets is the wrong question; the question should be about athletic net revenues or profits. As long as the athletic department's is not drawing resources from the academic side of the university, then the athletic budget is only one part of the story, and misses the big picture. Given that - according to the NCAA - many schools are generating losses, NCAA universities can do something to stem the increasing expenses at their universities.

BCS schools can insulate themselves from this by forcing athletic departments to be self-sustaining. Thus the athletic department can spend whatever amount it wants as long as it can generate the funds to cover those expenses. As the Daily Iowan reports, the University of Iowa's athletic department is self-funded, and only four sports are profitable: football, wrestling and men's and women's basketball. Those four sports subsidize the rest of the athletic programs at the Iowa, and thus they do not drain dollars directly from the University of Iowa's general fund. In fact, the athletics department paid $8.4 million to the academic side to cover scholarships to student-athletes.

This self-funding issue would be a rather benign way of insulating universities from increasing athletic budgets. Thus NCAA presidents can do something about the trend in NCAA athletic budget spending; it is just a matter of political will.