Since late in 2014, when UAB announced its intentions of shutting the doors to its football facilities and becoming the first Division-I program to put an end to football since the University of Pacific in 1995, college football has been in a state of existential crisis. The foundation of the NCAA’s identity has been challenged and football, as the principle provider of revenue–note that says revenue and not profit–for most athletic departments, is at the heart of it all.
With student-athletes struggling to make ends meet and students largely footing the bill (read: accumulating debt) of athletic department subsidies, television revenues at the sport’s highest levels are reaching stupendous heights. However, with the schools of five major conferences (the “Power Five”) ultimately controlling the flow of cash, college football’s Middle America–the Group of Five–is on the verge of its own housing market collapse.
UAB’s controversial (and still contested) decision to cut the football program was made in lieu of an athletic department with a $30 million budget that needed nearly $20 million in subsidies, according to a New York Times look into the finances of mid-major college athletics. And, while most won’t even remotely entertain the thought of slashing the football or basketball program, the reality of many schools in the Group of Five is similar.
Television revenues have fueled massive expansion at P5 schools. And, while there’s always been a gap between a school like Alabama and a school like Northern Illinois, the trickle-down economics of the new College Football Playoff revenue dispersion is only likely to widen said gap. So, G5 schools who hope to continue to compete so that they can use football as a tool to give their university exposure turn to student fees to bite into the deficit.
That same Times report stated that in the Mid-American Conference, student fees in relation to athletics cost an average of $300 per semester. That’s nearly $2,500 in cost over four years, ultimately showing up as accumulated debt to your average student.
As the NCAA tries to coalesce the farce of “student-athletics” with the reality that billions of dollars of revenue is being made on the back of a largely uncompensated workforce by offering stipends and readdressing “Cost of Attendance” legislation issued by P5 conference commissioners, it’s the mid-major programs that perilously face finding a way to fund these expenditures. The stipends in particularly were vetoed because an additional $2,000 in spending cash for all scholarship athletes would cost schools anywhere from $500,000 to $1,000,000 a year.
That’s a pittance if you’re Ohio State, but at a school like San Jose State with a $24 million budget, it’s simply not affordable. The veto was largely driven by the smaller schools.
Potential cost of attendance adjustments could raise the value of a scholarship by anywhere from $5,000 to $10,000, which, for football alone, would cost schools an additional half-million to million dollars. Needless to say, those costs aren’t life-threatening for P5 schools–even the ones like Maryland and dozens like it who are currently operating at a loss as an athletic department.
However, they are forcing schools to examine the sustainability of football, just as UAB has done. The Football Bowl Subdivision was made up of 128 members in 2014, and the new College Football Playoff combined with broadcasting rights, revenues from their own network, bowl payouts and NCAA tournament/CFP payouts made the Big Ten, SEC, Pac-12, ACC and Big 12 hundreds of millions of dollars in revenue in 2014.
After the P5 had raked their fingers through the cash, the spare change made its way to the G5. And, while that sounds disparaging, everybody did make more money. However, if we look specifically at the CFP’s payouts, G5 schools were made just 1/5th the payment of P5 schools. Those additional revenues have empowered the larger schools to further price smaller schools out of the game in the college football space race.
And recent reports that the Big Ten is considering ruling first-year freshmen ineligible could finally be the breaking point.
The idea of making freshmen ineligible is in an effort to allow student-athletes to acclimate themselves academically, and given the graduation rates of football and basketball players, it sounds noble. It’s important to note that graduation rates would almost certainly rise, and that’s not to be taken lightly.
However, in a system that appears to be designed to firmly place the balance of power into the hands of the governance and not the populace, this would be the most oppressive move yet.
If this policy were adopted nationwide, it’d be done at an estimated cost of $94.5 million, according to the original University of Maryland student newspaper report. Football teams would likely be granted additional scholarships to account for an additional year of attendance and that would come at a great cost. One that would certainly be absorbed amicably by most P5 institutions, but not by already over-leveraged G5 schools.
Furthermore, elite college football and basketball players who are ready to make an immediate contribution and give themselves some brand recognition as they pursue their dreams of playing professionally wouldn’t be allowed to do so. In light of the ruling in O’Bannon vs. NCAA, ruling freshmen ineligible looks like a way for the Big Ten and like-minded P5 conferences to further exert their power.
Yet, as college football and the NCAA as a whole continue to fight the public perception that they’re contracting athletes into indentured servitude by offering small fractions of their market value under the guise of adjusted living costs, it’s the smaller schools that suffer. Stuck in Division-I with no reasonable hope of competing financially with their bigger brothers, they’re accumulating tons of debt and they’re further over-leveraging themselves in an effort to strike the football lottery, winning big and gaining it all back.
Some may succeed. Most others won’t. All signs point to a collapse of the FBS’ current economic model, and it won’t be the P5 conferences that suffer the consequences. They’ll break off and form a league of their own.
It’ll be schools like UAB and the student-athletes who go there who take the brunt of it.
It’s predatory lending and it sounds all too familiar.