What Should Revenue Sports Pay For on Campus?

There were many intriguing points presented in ragnarok's excellent post on how to resolve the conflicts between academia and athletics at Cal last week. The ensuing discussion was very interesting, and I encourage you to check it out before going onto this post.

For me though, one of the most interesting points was the one TedfordIsGod presented.

I agree with Nader that are priorities are way off when it comes to sports, but in a more nuanced way.

I think one fundamental issue is that we need to decouple football and men’s basketball from all other sports. The "revenue" and the "non-revenue" sports should be viewed as completely separate entities.

It would not be sensible to cut football and basketball, because they are reasonably huge money making operations.

The traditional logic was that "football and basketball pay for the others sports." I assume that is more-or-less true.

But there is absolutely no reason that because football and basketball can cover the costs of the other sports, that they should be used to cover these costs.

Read more about why he feels this way (plus interesting news about the future of Cal athletics that might shape this discussion) after the jump.

For example, the new football (lets no kid ourselves with the 19 sports mumbo-jumbo) facility will be great for the football team, but at the same time, the RSF is not close to sufficient for the rest of the student population (and they charge for it, something didn’t use to be the case.) Wouldn’t a sports facility that benefitted the student body at large have been a much better use of money than something that benefits those 18 other sports. I remember a Daily Cal feature while I was working there about how the softball team had to change in their cars because they didn’t have a locker room. My response was – who cares? If I wanted to play baseball I had to go to Ho Chi Minh field, avoid dogs and children and the elderly, and potentially break my ankle in the various ruts and potholes.

Why shouldn’t football revenue be used to the benefit of the chemistry department? This is obviously the flaw with your cable analogy. If the choice is cuts to chemistry v. having a field hockey team, the choice should be equally obvious – get rid of field hockey.

I see no reason why the university shouldn’t take the noble position that while there are good reasons to have the two major sports ($, people like them, university reputation, etc.), there are much better allocations for the revenue than the non-revenue sports.

An example of what TedfordIsGod is arguing against was reported on last week at the Daily Cal by our football kicker David Seawright.

Cal field hockey coach Shellie Onstead has been hoping for a locker room for 28 years. In a twist of fate, the football program may be able to provide her with just that.

The Cal athletic department kicked off the Endowment Seating Program-a massive fundraising campaign-on January 1. The program aims to collect between $300 and 325 million dollars by selling the rights to between 40 and 50 years of priority seating at Cal football games. That money will go toward funding athletics across campus, including field hockey.

Ranging in cost from $40,000 to $225,000 per seat, each newly constructed section will include benefits from private restrooms to catered food, drinks and pregame field access.

If the UC Board of Regents votes to pass the project in September, the sale of these 3,000 seats will fund seismic upgrades for Memorial Stadium.

But to spend over $200,000 for a cushioned seat and extra leg room seems absurd. Are there really enough Cal alumni with that much disposable income to burn despite the current economic downturn?

To be brief: yes.

"What we have in present value is $160 million," says Assistant Athletic Director Nate Pine, who arrived at Cal last September with experience fundraising for Oregon State's recent stadium renovation. "What we have when you take out the full thirty year commitment is $293 (million)."

Thus, a program created for the benefit of Cal football could end up benefiting the whole of Cal athletics. Now, this could also be money that benefits the rest of Cal as well and help boost the student experience, power academic events or provide funding for other events that increase the university's prestige. But as of now the ticket program for Memorial Stadium seems designed to help fund all of Cal Athletics, which would be a pleasing outcome regardless of all alternatives.

Now, getting back to the main issue, there are three big counterpoints one could make to TIG's points:

1) Nonrevenue sports contribute to the well-being of the student body. It funds athletes who are generally more well-rounded in academics (not to say that Cal football and basketball players aren't up to speed with the Cal scholar, but Alex Macks and Joe Igbers are generally the exception, not the rule).

2) Nonrevenue sports produce Olympic athletes, which add to California's prestige not only nationwide but internationally as well. For a school that prides itself on a worldwide network of alumni, this could discourage talented international athletes from becoming Golden Bears.

3) Tradition, which I imagine will be what most people will argue for keeping these programs paid up. Cal Athletics has one of the greatest all-around records in all of college sports in terms of NCAA championships won. Strip these sports out and we are pretty bare bones in terms of athletic acheivement.

To which I could see people offering the following refutations.

1) No one watches nonrevenue sports (other than family members), and those that do aren't usually paying top dollar. Financially, these programs will always suffer losses. People who watch revenue sports and pay good sums of money to keep on watching them, and they are a net positive to the university and its alumni. Economically, there is no real reason to keep on propping up sports that are failing financially other than to maintain tradition.

Interestingly enough, doing well in sports, both major and minor, doesn't seem to have dramatic impact on alumni donations. TedfordisGod brought up this key point.

To take this point a bit further, the main assumption is that athletic success leads to greater alumni giving.

But that just isn’t true. An NCAA commissioned study done by Peter Orszag and others concluded…

We conclude that the hypothesis that increased operating expenditures on sports affect other measurable indicators, including alumni giving, is not proven

And certainly, if it is generally true, it is certainly not true for the non-revenue sports. A common refrain from non-revenue backers is that alums who played sports give at higher rates than others. (A claim that may be true, but I would argue that non-revenue athletes probably, on average, have higher socioeconomic status than the average student.)

To see just how much is spent on sports at Berkeley, and how much they lose, even after taking all the revenue into account, read this

Conservatively, cutting the non-revenue sports would save 25 million dollars per year or about $1,000 per undergraduate (a shocking sum of money when you think about it. But the other way, in total cost, I would estimate it is costs about $60,000 per year per student athlete if we have about 1,000 athletes on 27 teams. We probably don’t have close to that many. Crazy!)

2) Perhaps nonrevenue sports should go their own route (Olympic sports? I'm pretty sure almost all nonrevenue sports are Olympic sports, save maybe lacrosse) and raise their own money, much like the Cal rugby system (which is, as far as I know, totally self-sufficient). Less scholarships and recruiting money will be available, but in the Internet age it's certainly not as hard to scout for talent as it used to be.

This is certainly not a problem unique to Cal; we are certainly poised to handle the problem better than a majority of universities around the country. But it'll be interesting to see how the university tackles the issue in the weeks and months to come.

So I'll open the discussion up with several questions for you to ponder: Should revenue sports pay for non-revenue sports first and foremost? Should they be expanded to be utilized for academic purposes? A compromise between the two? Any points I missed? Should student-athletes find ways to raise their own money for their activities?  What alternative plans do you propose?