In the wake of March Madness, some of us at the Urban Institute are reflecting on the financial costs of intercollegiate sports alongside the emotional costs of so many ruined brackets. This got me thinking: if colleges got rid of athletics, how many more students could they fund? Based on various assumptions, I calculate that colleges could fund at least an additional 200,000 scholarships.
Although some sports at some schools (think football at Texas A&M University) bring in a tidy sum, college sports incur a net revenue loss for most institutions. Costs associated with athletics programs include coaching and other staff, athletic scholarships, and facilities and overhead, as well as travel, uniforms, and snacks for athletes. Of course, sports also bring in revenues, in the form of ticket sales, alumni donations, conference distributions, licensing, and more.
To estimate total losses from intercollegiate sports, I used National Collegiate Athletic Association (NCAA) Division I finance data from two sources: total 2015–16 revenues and expenses for public Division I schools and the NCAA Revenues and Expenses report (2004–16). (Although the data are detailed, as always, they are only as good as what the institutions report.)
To illustrate the range of net revenues, consider that athletics at Texas A&M netted $57 million in 2016, while James Madison lost $38 million in the same year. The median school lost $11 million.
In all, data for the 230 Division I public institutions indicate that removing both revenues and costs associated with college athletics would save $2.5 billion. If this money were instead distributed as $4,000 scholarships to students (based roughly on the average 2016 Pell grant of $3,740), an additional 615,438 scholarships could be distributed.
Of course, this is purely a thought experiment. There is no reason to believe that if collegiate athletics were abolished, colleges would choose to reallocate these savings to fund low-income students.
A different way to think about the cost of collegiate athletics is to focus on “allocations” (column c in the above table). This is the amount the institution redirects to athletics, money that comes from student fees, institutional funds, or (rarely) state or governmental support. Essentially, this is the rest of the university subsidizing athletics.
If, rather than eliminating college sports, we insist that they be self-sustaining, the university could keep the amount it currently allocates to sports. If these funds were redirected toward student scholarships, we could fund 684,158 scholarships. This would allow profitable programs to continue but eliminate the unprofitable ones (or force them to become profitable).
Eliminating all sports programs, as in the original scenario, would by design eliminate athletic scholarships. According to the NCAA’s financial report, these scholarships average 15 percent of costs in the Football Bowl Subdivision, 26 percent of costs in the Football Championship Subdivision, and 29 percent of costs in Division I without Football. If we allowed student athletes to keep these scholarships (or at least grandfather them in), we could still fund an additional 199,440 Pell-equivalent scholarships. Alternatively, we could give these athletes the same $4,000 scholarships as everyone else, which would still yield 492,354 additional scholarships.
These calculations are limited to public Division I schools. Extrapolating to private schools or adding Divisions II and III would likely inflate these numbers.
The implications of this thought experiment are ambiguous. There could be ripple effects, such as a drop in alumni donations or student applications. But a 2009 Congressional Budget Office report concludes that there is no evidence that in aggregate, athletic programs increase donations or student quality.
There are also nonfinancial considerations. Some studies have shown that participation in high school sports is beneficial for later life outcomes, at least for women, although other studies do not. Moreover, some studies indicate positive outcomes for former student athletes, and many point to less quantifiable benefits, such as the development of teamwork, communication, leadership, and other soft skills. Many of these benefits, however, can arguably be gained through participation in intramural sports.
Additional considerations fall on the other side of the ledger. For example, student athletes at some institutions notoriously enroll in fake classes with no academic value, and James Shulman and William Bowen convincingly argue that college athletes tend to underperform relative to what their background preparation would predict. In addition, we have lately heard a great deal about the potential long-term health consequences of football, and large sporting events are associated with increased incidences of campus sexual assault.
The attention paid to collegiate athletics is a uniquely American phenomenon. It is so engrained in American culture that it is unlikely to disappear. But some schools are beginning to question the financial value of college sports and are cutting back in certain areas. Especially for public institutions, it is worth considering how much we feel college athletics contribute to, rather than detract from, institutions’ academic missions.