Bradley University president Gary Roberts is convinced that the current financial structure of Division I college athletics is unsustainable.
“We have a subgroup of schools that have turned football and men’s basketball into professional entertainment,” Roberts said. “The money that’s earned is simply so great that schools who don’t earn it won’t be able to stay competitive for much longer.
“Right now at Bradley, we can sustain the subsidy of college athletics. But barely. If that deficit were to grow anymore, it would get very problematic for us.”
Opinions differ over how unsustainable. Of the eight college administrators and coaches interviewed for this story, all agree the challenges are growing for schools outside the Power Five, the 65 members of the five wealthiest conferences in NCAA Division I.
Bradley’s Roberts was the most emphatic in his assessment and believes major restructuring will come sooner than later. Such changes could run the gamut from a split of Division I basketball and other sports into two divisions (such as already exists in football) to individual schools deciding unilaterally to downsize to the less expensive worlds of Division II or III.
While the Power Five schools have always held a large financial edge in revenues generated through ticket sales, donations, corporate sponsorships and NCAA and bowl game distributions, that gap has escalated in recent years with massive television agreements.
Last summer, the Big Ten landed a six-year, $2.64 billion deal with ESPN, Fox and CBS, a figure in addition to the league’s lucrative Big Ten Network. The Lafayette (Ind.) Journal & Courier reported that the Big Ten’s media rights revenue for the 2017-18 academic year is projected at $44.5 million for each of the conference’s 12 most established schools, with lesser amounts going to new members Maryland and Rutgers.
That profit figure is many times the entire budget of most Division I athletic departments, according to a 2015 USA Today study detailing financial information for athletics of the 230 Division I public schools.
In 2014, new NCAA legislation allowed the major conferences — the Atlantic Coast, Big Ten, Big 12, Pac-12 and Southeastern, dubbed the “Power Five” — to create their own rules. Thanks in large part to its TV contracts, the Big Ten operates on a higher financial level than the other Power Five leagues.
Approximately two dozen athletic departments among those 65 Power Five schools are self-sustaining, a pipe dream for the rest of Division I.
A LITTLE HELP
Although comparing finances for individual schools isn’t always a function of comparing apples to apples because of varying accounting methods, it can be safely said that most of the remaining 286 Division I schools receive more than half of their athletics funding from university sources such as student fees and government subsidies.
The USA Today report listed several athletics budgets dependent on their universities for 75 percent or more of their operating expenses. Chicago State, for instance, receives 90 percent of its $6.4 million athletic department revenues from the university.
In the Missouri Valley Conference, Wichita State is the top revenue-producing school, bringing in $19.2 million from athletics and needing a university subsidy of just 28 percent to meet its budget of $26.7 million.
At Illinois State, meanwhile, 73 percent of its $26.3 million in athletics funding comes from the university. A total of 37 percent, or $9.8 million, of ISU athletics funding comes from student fees.
“Student fees are a part of the institutional function at Illinois State,” Illinois State athletics director Larry Lyons said. “It’s how this institution has decided to fund athletics for a long time. Right now, it’s appropriate for where we’re at. At over 21,000 students, we’re in a good enrollment trajectory.”
Bradley does not assess a separate student fee, although a small percentage of each BU student’s $32,000 annual tuition is directed toward the athletics department.
The university subsidy at BU was 58 percent in 2013-14, according to the BU Resources Committee report from that year. The school’s subsidy percentage, compared to the MVC public schools in the USA Today report, was lower than all but Wichita State and Northern Iowa. (Bradley and other MVC private schools Drake, Evansville and Loyola were excluded from the study.)
Bradley athletics expenses, however, increased markedly in recent years. The Resources Committee report detailed that the deficit for Bradley athletics more than doubled in the five-year period from 2008-12 ($2.9 million to $5.9 million). The university subsidy for athletics increased slightly in 2013 to $5.94 million and decreased slightly in 2014 to $5.8 million.
Gary Anna, Bradley senior vice president for business affairs, said those numbers were still “reasonably accurate,” noting that the amounts do not include tuition revenues attributable to student-athletes, including non-scholarship walk-ons.
“The university subsidy going forward, using these financial metrics, will not increase,” Anna said. “We have seen year-over-year increases in fundraising solely attributable to athletic efforts and cost management, both of which will continue. We believe our five-year athletic financial outlook has nothing but upside tendencies associated with it.”
BU athletics holds an annual themed auction that usually raises in the neighborhood of $100,000. The department also requires coaches and other athletics personnel to seek donations from alums and boosters.
“Chris Reynolds has done a fantastic job of trying to hold down costs, raise revenues and raise the visibility of the program in the community,” Roberts said. “But as hard as they’re working, we’re still looking at a pretty substantial deficit, one that is unsustainable long term. Bradley is willing to subsidize the athletic department, just like it’s willing to subsidize the speech program, the theater department and other extracurricular activities. They’re an important part of the culture of our university. But there comes a point when the subsidy becomes unjustifiable.
“We’re not far from that point.”
Reynolds, a native Peorian hired away from Northwestern to lead Bradley athletics in March 2015, declined to be interviewed for this story.
BIG MONEY & BIG CUTS
Much of the Power Five fortune is being spent as fast as it’s earned. According to the USA Today study, Texas A&M produced the highest gross revenue of all colleges, at $192.6 million. A large percentage of those Texas A&M monies went to the renovation and expansion of the school’s football field.
In many other cases at the Power Five level, those schools’ large profits have gone to increased coaching salaries, larger-staffed athletic departments and bigger, flashier facilities in the never-ending arms race to attract better recruits, more exposure and a bigger fan base.
“Despite their increased revenues, those five Autonomy Five conferences have some economic issues,” Creighton athletics director Bruce Rasmussen said, assigning his own moniker to the power leagues. “Keeping up with facilities, student-athlete benefits and welfare, I’m fearful, across the board, it’s a house of cards. My prediction is we’ll have a system that’s comparable to what takes place everywhere else in the world, where athletics is outside our educational system. Businesses and private entities will sponsor athletics.”
Such a scenario may not seem far-fetched once athletic departments begin reining in spending in more visible ways than trading charter flights for buses to road games, something Bradley men’s basketball has done for closer trips in recent years.
Last spring, Idaho football dropped from the highest playing level — the Football Bowl Subdivision — to the Football Championship Subdivision. In the process, the school also saved major travel expenses after leaving the Sun Belt Conference for the Big Sky.
“I think there will be more decisions like Idaho’s, because it’s part of the bigger picture for institutions,” Illinois State’s Lyons said. “College athletics brings value to campuses and communities. Everybody has to decide what level they’re going to invest in. Some people will decide they want to move up. There are challenges, no question.”
Not all of college athletics is in a cost-cutting mode, especially when it comes to football, the big-engine driver of college sports. This month, Liberty was approved by the NCAA to move up from FCS to FBS. Colorado State is also undergoing a major upgrade, moving into a new $200 million on-campus stadium this fall, possibly angling for an invitation to Big 12 membership.
Certainly in recent years, though, many schools have streamlined expenses by cutting non-revenue sports such as baseball, wrestling, tennis and golf, but staying at or above the minimum D-I requirement of 14 total sports. But sometimes it makes more sense to add a sport like track and forego the field part of the endeavor.
Bradley has done this with its women since the 1990s and in 2012 added the men. It uses its large stable of cross country athletes — most of whom do not receive any athletic scholarship money — to compete in track distance events in the spring. Evansville is following suit next year.
“It’s a brave step for us, and we’ll have a lot of scrutiny to it,” Evansville athletics director Mark Spencer said. “But profitability-wise, it helps to bring low-scholarship, high-academic kids on campus. They bring money to the university, so they would be self-funding their own program. We don’t have to build a facility for it and the travel expense is minimal.”
Bradley has employed numerous other creative forms of raising money for a department that has long relied upon the university to subsidize most of its expenses.
Creighton, a member of the non-football playing Big East, gets about $2 million of its $17 million budget from the school and only $500,000 from student fees, Rasmussen said. More than 90 percent of Creighton’s athletics revenue comes from men’s basketball, which averages more than 17,000 in attendance per home game.
“When I look at schools and how much of their budgets come from their universities, I don’t know how you can justify that,” Rasmussen said.
“In the Big East, we have probably as good of a TV contract as there is for just basketball,” said Rasmussen, who put Creighton’s take from the rights fees between $2.5 and $3 million. “That number pales in comparison to the Autonomy Five schools (with their large football TV contracts). But if we can be competitive (on the court) on a regular basis, it’s been a good move for us from the Valley.”
Evansville’s Spencer said UE athletics received 70 percent of its funding from the university.
“That’s a big number, but it’s reflected by how you count your money,” Spencer said. “Less than half of our operations and salaries come from university money. The majority of university money comes from scholarships.”
Evansville athletics has suffered as the university enrollment has fallen during the past eight years from 2,800 to just more than 2,200.
“(As a result) the university has a freeze on subsidies to athletics,” he said. “So our teams do more fundraising. It feels like we fundraise for our life. The hope is the university can increase enrollment. As the university gets healthier, we’ll get healthier.”
Spencer, formerly the associate athletics director and chief financial officer at Oregon State of the Pac-12 Conference, said the Power Five schools are not all created equally.
“There are still the haves and the have-nots within the Power Five conferences,” he said. “You take Oklahoma and Texas out of the Big 12 or Michigan and Ohio State out of the Big Ten and the other teams get a whole lot more similar. They’re all bringing in more money than they used to, but you still have to sell your school and your program to recruits. So schools like Evansville and Bradley can still be competitive when they spend the money they do have smart.”
While the Power Five schools have separated themselves on legislative issues, Creighton’s Rasmussen doesn’t see that taking place on the playing courts and fields.
“There are about 50 or 60 schools bringing in significant money,” he said. “Most schools are not-for-profit. People are concerned there will be a split-off. But I don’t think that will happen because they need to play us regardless of what sport it is. Somebody’s got to lose those games. That gives us some leverage.”
And the often six-figure dollar guarantees that smaller schools receive for taking those beatings in basketball — and occasionally pulling off an upset — are an important part of their athletics budgets. Those big paydays are diminishing for the Football Championship Series schools, though, since the Big Ten’s decision to play only Football Bowl Series opponents.
MVC commissioner Doug Elgin recognized the resource disparity between his conference schools and the high majors. But he’s taking a positive viewpoint.
“The high-resourced institutions will always have an advantage,” he said. “That’s been the case since I’ve been at the Missouri Valley, since the mid-1980s. But in men’s basketball, leagues like ours have been able to hold our own. You’re seeing some financial stress, but our schools have done a terrific job trying to keep pace. I think our schools will continue to find a way to do that.”
Elgin noted the growth of the Valley’s digital television network has also been critical to the league’s national exposure. Most MVC basketball games can be seen on the ESPN video stream.
While there is little, if any, profit involved for the schools compared to the millions raked in by the big schools, it’s served as a good recruiting tool enabling athletes’ parents the opportunity to watch their kids play. But there’s a downside.
“It’s been both a blessing and a curse,” Spencer said. “It’s great to get national exposure. But it definitely costs us butts in the seats. It’s turned some people from supporters into fans.”
And those butts in the seats are the lifeblood of any college sports enterprise. Bradley’s men’s basketball tickets-sold average has dipped under 6,000 for the first time each of the past three seasons. This year’s average of 5,488 is the program’s all-time lowest in 35 years at Carver Arena.
“Bradley has a great program that can be competitive in the short term,” Roberts said. “But our fan base has to turn out to support those programs. We’re in a precarious position. The last few years have not been helpful, to put it mildly.
“At the end of the day, if our fans aren’t willing to buy tickets and come out and watch good kids play because they don’t win a lot of games, then we might not survive in the current environment. The fans are the ones who will make that decision for us.”
Whether that means finances will drive Bradley and other mid-majors into a lower, more affordable division isn’t a prediction Roberts is prepared to make.
“Bradley will always have an athletic program,” he said. “What it will look like, I don’t know. But if you look at the deficits schools are running, at some point you’re going to see a clash between the academic interests and their passionate athletic fan base. And that’s going to get ugly. I would not want Bradley to be in the forefront of that movement because it would be such a distraction and so destructive to what we’re trying to do.
“So Bradley’s not going to take the lead in the changing of college sports. But, I suspect at some point, we’ll get caught up in it.”
Dave Reynolds can be reached at 686-3210 or at email@example.com. Follow him on Twitter at davereynolds2.