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January 2012, CSBN Columnists
Cost of Attendance Controversy Reveals Seismic-Size Competitive Equity Problem
In August the NCAA approved a plan that will allow schools to pay for a cost of attendance stipend beyond tuition, room and board for athletes; the legislation would allow for a $2,000 stipend intended to help with additional school-related expenses. The NCAA believed that unprecedented conference television deals would help cover the cost. However, that plan has been put on hold after a growing number of schools who are not party to these television deals voted to override the decision.
Of the 346 Division I schools, 125 signed on for the override measure, which guaranteed the suspension of the rule. The issue will be reconsidered at the Board of Directors meetings in January. “Based on conversations I have had, I am confident that there remains a very high level of support for this permissive legislation to provide better support for our student athletes,” NCAA President Mark Emmert told the NCAA News.
To the NCAA's credit, the idea of the stipend was to help prevent the modern student-athlete from having to reach outside to boosters to pay for extra expenses such as travel, food, and clothing. Considering many prominent schools have been immersed with issues involving agents or boosters providing players with extra income, the NCAA was trying to provide a solution. Additionally, student-athlete welfare and simple economic justice led to the new proposal.
Former Penn State President Graham Spanier chaired the working group established to examine student-athlete well-being issues. “We understand the situation of our student-athletes. This isn’t about paying student-athletes, but it is about being fair and recognizing that in Division I it ought to be important to meet this need,” Spanier said.
While the stipend is voluntary it is very clear that any schools that don’t provide the extra money to athletes will be at an instant recruiting disadvantage.
Back in June the NCAA reported that the spending gap between the richest programs and the rest of Division I continues to grow. University subsidies and student fees are increasingly being used to fund athletic programs, especially at the non-BCS level.
Only 22 of the 346 athletic programs in NCAA Division I generate more money than they spend according to the NCAA’s most recent report. Of those truly self-sufficient programs, the median annual surplus is $7.4 million. The rest of the Division I schools experience a median deficit of $11.3 million. The nearly $19 million gap between the schools that generate a profit and those that produce a deficit resulting in institutional subsidies and student fee allocations has been referred to by NCAA President Mark Emmert as a competitive equity issue. This assessment understates the problem since it is actually a seismic-size competitive equity gap.
It is within this financial climate that the cost of attendance proposal emerges clearly pitting the haves against the have-nots. Matthew Denhart, administrative director for the Center for College Affordability and Productivity, a Washington, D.C., group that studies college finances, says that colleges are moving toward “a breaking point.” Boise State claims that the proposal creates an unfair playing field between institutions.
For many people interested in supporting student-athletes the permissive legislation was a public relations coup for the NCAA; however, the funding inequities that exist within Division I are highlighted by the legislation and these issues are extremely problematic in many profound ways.
Earlier this year Kentucky men’s basketball coach John Calipari said he could see the BCS conferences breaking away from the NCAA. Additionally, Big Ten commissioner Jim Delany went public with a view that there needs to be major changes under the umbrella of the NCAA.
As conference realignment continues to occur and the prospect of 4-5 super conferences becomes more likely, and as discussions start to unfold about changes to the BCS format, the prospect of a new and separate structure for Division I BCS teams becomes more of a reality. This well-intended legislation demonstrates the true chasm that exists between BCS and non-BCS schools; regrettably it may be too big of a gap resource-wise to ignore any longer. Fundamental change is in the air.
Dave O'Brien J.D. has been a college sports executive and educator for over 25 years. He served as a Division I athletic director at Long Beach State University, Temple University and Northeastern University for 16 years (1991-2007).
O'Brien is currently the Director of the Sports Management Program at Drexel University where he also teaches at the undergraduate, graduate and law school levels. In addition to his academic position, O'Brien is the managing partner of the O'Brien Sports Group which provides a wide range of consulting services to the college sports industry, including NCAA rules compliance, risk management audits, business support services, executive recruitment, training workshops and more. He is also an editor of College Sports Business News.
O'Brien is active nationally in sports law matters as co-author of a monthly column on college sports law issues published in College Athletics and the Law and as a consultant on sports topics including pay equity, retaliation, harassment, Title IX, and coaching contracts.
Prior to becoming an athletic administrator, O'Brien served in a variety of roles in higher education, which included assistant to the president for legal and legislative affairs at Montclair State University and the assistant vice president for administration and finance at Long Beach State. He also served on the legislative staff of the New Jersey Senate and practiced law in New Jersey.
O'Brien is a graduate of Moravian College and Seton Hall Law School, and has also attained certification from the Sports Management Institute as part of its inaugural class. He can be reached at dobrien@collegesportsbusinessnews.com