- The Washington Times - Monday, October 30, 2006

NCAA President Myles Brand said college athletic departments must slow their rate of spending to avoid relying on subsidies from the universities and endorsed a series of recommendations designed to help departments balance their budgets.

Speaking at a National Press Club luncheon yesterday, Brand said only about two dozen college athletic departments are turning a profit, with many schools increasing the amount of money they take from university subsidies, known as allocated funds.

This is placing pressure on the academic mission and values of some schools, he said.

“For a number of universities, institutional funds have increasingly filled the gap between rising operational budgets and outside revenue,” Brand said. “For the vast majority, the current financial model of much of intercollegiate athletics — spending at a rate that strains the ability of higher education to support — simply cannot be sustained.”

A task force of 50 university presidents spent the last 18 months examining the issue of fiscal discipline in college athletic departments. It discovered that from 1993 to 2003 Division I schools increased their use of university subsidies from 14 percent to 18 percent and Division II colleges increased their use of subsidies from 61 percent to 70 percent. Between 2001 and 2003, the spending of athletic departments grew three times faster than their university’s spending overall.

The NCAA can’t legally tell colleges how much money to spend on their sports programs. But the task force did propose a more uniform system of financial reporting that will allow universities to see how they stack up financially against institutions similar in size. Using the new information, university presidents — not athletic directors — ultimately will be responsible for curbing the rate of athletic spending.

The task force recommended instituting a fiscal-integrity review as part of the NCAA athletics certification process, requiring universities to present a fiscal impact statement tied to any expense incurred by the athletic department. It also recommended establishing a financial training program for athletic department officials.

The group stressed colleges are not facing a fiscal crisis; athletic departments make up less than 5 percent of university budgets. However, it said the increasing amount of money funneled to college sports from other university funds is philosophically troubling.

“While athletics is not in an immediate crisis financially, financial issues are most likely the symptoms of future trouble,” said Peter Likens, a former president of the University of Arizona and chairman of the task force. “The resulting — and perhaps deeper — problem is the danger of cultural isolation of student-athletes from the intellectual purposes and academic values of colleges and universities if budgetary matters are not met.”

Brand ordered the creation of the task force in 2005 after noticing universities had not responded to several studies that cautioned against heavy spending on athletics.

“Despite their irrefutable evidence contradicting the argument that athletics must spend to win and win to increase revenues, the reports were virtually ignored by the intercollegiate athletics community,” Brand said.

Brand said athletic departments can curb spending increases by avoiding costly upgrades to stadiums and arenas. About 20 percent of athletic department spending stems from the expansion or construction of facilities or the debt associated with those projects. Brand also said universities can slow spending increases by gradually decreasing the number of employees in their athletic departments.

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