Major College Athletics: Financial and Moral Failings

Major college sports enjoy an image of enlightened morality coupled with financial prowess.

Tune in to any major NCAA televised event and you are bombarded with constant messaging of social and political progressivism. Individual schools and programs publicly embrace a spectrum of causes, from the liberal to the outright leftist.

The television advertisers during commercial breaks are a who’s who of the largest, most powerful corporations in the world. March Madness and the FBS rake in billions of dollars annually, from broadcasting revenues to merchandising. Schools join major power conferences not for geographic convenience or to preserve historic rivalries, but instead to secure lucrative payments for the programs.

Yet these false images mask unpleasant realities. Major college sports are financially broken and mired in immorality. The unsustainable truth manifests in four failings.

Failing #1: Major College Athletic Programs Bleed Cash

The accounting does not lie. Less than 10% of Division I NCAA athletic programs make money, defined as sports revenues covering sports expenses. Meaning 90% of Division I athletic programs lose money.

There is a misconception that Division I football and men’s basketball programs rake in big bucks, which are then used to cover or subsidize the other sports at a school. Although football and men’s basketball bring in the most revenue at Division I schools, only 20% of all Division I men’s basketball programs brought in more revenue than the basketball program spent, according to the Wall Street Journal. Football did a bit better, but only 28% of Division I programs brought in more revenue than what they spent.

If one adds up all Divisions I-III programs across the NCAA, total revenues were $10.6 billion while expenses were $18.9 billion, creating a massive deficit. Less than 10% of Division I programs cover their expenses with their revenues. These deficits get plugged by direct and indirect subsidy via government revenue (taxpayer dollars), excessively high tuition, and the hidden costs of college these days in the form of student activity fees and the like.

If you never watch a college game, you pay for college sports via taxes. If you are a student that doesn’t have an athletic bone in your body, you pay for major college sports programs through escalating tuition. Government and academia created a system where all are forced to subsidize these money losing endeavors, whether we desire to or not.

Failing #2: Higher Education Puts Your Dollars in the Fluff Instead of the Substance

College athletics spend massive amounts of money on a host of program line items, but the single largest expenditure line item is coaches’ salaries at $3.7 billion (student-athlete compensation won’t appear on the list, another hypocrisy of academia). That’s not by accident.

Many people are shocked to learn that in 39 of the 50 states the highest-paid state employee is either a university football coach or basketball coach. In most of these 39 states the difference between what the college coach is paid and what the governor is paid exceeds a factor of ten.

Public university football and basketball coaches in these 39 states have compensation levels that grossly exceed the pay packages for the heads of the state medical, law enforcement, and educational organizations. Taxpayers in these 39 states are forced to pay excessive amounts of money for someone who can design a 3–4 defense or who can talk a seventeen-year-old into committing to the state school basketball program instead of those dollars being invested in efforts to provide improved cancer care, to keep the streets safe, or to improve math and reading proficiency in the public school systems.

Failing #3: Moral Hypocrisy Abounds in College Athletics

The NCAA, individual universities, and college sports programs all tout commitments to a host of progressive issues. These commitments are trumpeted everywhere you read, watch, or listen.

Until you compare the actions of universities behind the scenes to the public rhetoric. Major college sports programs display shocking hypocrisy when there is an opportunity to procure money. If major funding for a new facility is in play, universities drop all pretense of moral authority and will chase the almighty dollar.

One could choose from a gaggle of examples to illustrate how major college sports programs drop their high-and-mighty platitudes to grovel for funds. The owner of hundreds of fast-food restaurants that peddle unhealthy food and don’t pay living wages to employees leads the funding to revamp UCLA’s historic Pauley Pavilion. The CEO of a lingerie clothing brand that promotes unrealistic images of women to impressionable young girls has Ohio State’s football complex named after him. And a CEO notorious for his eagerness to slash jobs is one of Florida State’s biggest football boosters.

But the biggest example of hypocrisy is found at the University of Oregon, where the founder of Nike and track team alumnus Phil Knight is paying for a $270 million renovation to its track facility. This is nothing new for Knight or Oregon, as he has gifted over $1 billion to the school over time. He is free to donate his money where he sees fit.

What is hypocritical, however, is Oregon’s willingness to take Knight’s money. Oregon is one of the most liberal/leftist campuses in the nation. Equality, inclusiveness, and climate change activism are pillars of core beliefs on the Eugene campus. So, one would think Oregon would be picky and only accept money from donors epitomizing those pillars.

Not the case when it comes to Knight and Nike. Nike has been criticized for decades for its questionable manufacturing practices and whether they embrace child labor, low pay, and worker abuse. The Nike supply chain of overseas contractors is murky and there is concern oppressed Uighurs in China may be forced laborers in its supply chain. Many of Nike’s shoes and apparel are constructed of evil carbon-based materials.

Behind its politically correct ad campaigns, Nike is as brazenly capitalistic as one can imagine. But when a glistening new track facility, equipped with a barbershop, museum, and murals is in play, the Ducks sweep their morals under the bleachers. Rest assured this will not preclude the university from lecturing the rest of society on how to behave.

Failing #4: College Athletics Abuse the Concept of Human Capital

Funny how academic institutions that created the concept of, and preach to business the importance of, human capital will unabashedly exploit student athletes.

The exploitation of the student athlete is evident across three fronts.

The first is the most obvious: star athletes at major programs bring in millions of dollars of revenue for the school, yet the athletes are paid nothing close to a fair or living wage. Worse, most of these athletes will never make it to the pros and many of them will suffer injuries that can last a lifetime, from the physical to the cognitive. Major college sports are designed as human meatgrinders.

The second front of athlete exploitation is colleges, in concert with pro sports, using anti-competitive collusion to deny athletes opportunities to ply their trade in the free market. How ridiculous is it that in 2021 it is nearly impossible for a gifted athlete to exit high school and enter the NFL draft? Or that we are still duped into lamenting the ‘one and done’ mentality of the college basketball elite when it should be ‘none and done.’ Higher education and the big business of pro sports have imposed a system of indentured servitude on the most gifted of athletes.

The final front of human capital exploitation is misleading athletes and their families with the fiction that they will graduate with a free education in a skill that sets them for life. That is far from the rule today. Instead, the big-time programs know many of their student athletes will never graduate with a degree. Many who do graduate will be armed with a useless piece of parchment stating a major that has little demand in the real world (I suppose the student athlete shares the same fate as many students in this facet of academia’s failing).

A Moral Imperative for Change

Major college sports need an overhaul. Tear down these programs built upon failed business models, fiscal deficits, moral hypocrisy, and human capital exploitation. Build in their places sustainable models that meet the following four criteria:

  • Division I athletic programs only spend what they generate in revenues and donations. Taxpayers and students should not be forced to subsidize sports through excessive taxes and tuition levels.
  • Division I programs should pay star athletes fair compensation for what the athletes bring in as revenue. Dispense with the tired and bogus argument of, “well, the player gets paid with a free education.” That degree, if the athlete actually graduates, may end up not being worth the paper it is written on.
  • If a college sports coach at a public university is paid more than the governor of the school’s state, the president of the university, or the dean of its medical school, society should question if that school is acting in a way that is consistent with its charter as a public institution of higher learning. The university should be required to submit formal justification for the coach’s compensation package, much like a public company must submit a proxy to its owners to defend its executive pay packages.
  • Donations are only accepted if the donor and his/her business clearly comply with the mission statements and core values listed on university websites, speeches, and brochures. If they don’t comply, the school should either decline the donation or relax/modify its mission statement and core values so that a conflict no longer exists.

Until these reasonable, transparent, and rational reforms are adopted, academia, its leadership, and student body should refrain from activism and public discourse. The unwillingness to hold oneself accountable to the standards you lecture society to adopt is blatant hypocrisy that destroys credibility.

If academia wants to talk the talk, we should demand they walk the walk.

Major College Athletics: Financial and Moral Failings