(Jonathan Newton/The Washington…)
With its multimillion-dollar deficit mounting and no deep-pocketed donor to cover the shortfall, the University of Maryland’s athletic department will proceed with plans to cut at least seven of its 27 varsity teams this weekend. The downsizing is an attempt to correct an unsustainable pattern many households know well: Spending more than you earn.
But the forces behind the bleak reality in College Park aren’t unique to Maryland. Athletic departments at nine out of 10 public universities that compete in big-time sports spent more money than they generated last year — and many are grappling with the question of whether dropping some sports is the solution.
Unless runaway spending is brought under control, according to financial data and those who study them, it’s only a matter of time before other schools are forced to follow Maryland’s lead.
Over the last five years, 205 varsity teams have been dropped in NCAA Division I, the top ranks of college sports — 133 for men, 72 for women. Men’s tennis, gymnastics and wrestling have been hit particularly hard. Rutgers cut six sports in 2007 to address a multimillion-dollar deficit. Brigham Young, Clemson, Washington and UCLA have also pared offerings. And cash-strapped California Berkeley announced in 2010 it was cutting five sports because of budget problems, before an aggressive fundraising blitz spared the teams.
No major university has cut as deeply as Maryland, however, and some point to its budget woes as a warning that the current model of college sports, marked by overzealous spending in pursuit of success in football and men’s basketball, is broken.
“Quite frankly, I think we’ve gotten ourselves in a terrible situation with intercollegiate athletics, with the cost of running a program really out of proportion to the basic purpose of our universities,” said William E. “Brit” Kirwan, chancellor of the University System of Maryland and a co-chairman of the Knight Commission on Intercollegiate Athletics.
Added John Nichols, co-chairman of the Coalition on Intercollegiate Athletics, the leading faculty voice on the issue: “What seems to be happening all too often nationwide is that the breadth and depth of athletic departments are being cut. It’s becoming the victim of a financial need to feed this commercial beast.”
Texas, Ohio State and a handful of other universities aren’t feeling the pain. That’s because their football teams are so wildly successful they bankroll their entire athletics department — and more.
But that’s the exception. According to USA Today’s most recent annual survey of sports spending, culled from data supplied to the NCAA, just 22 of 227 public universities in NCAA Division I turned a profit in 2011. The rest, like Maryland, lost money.
The perfect storm
There are several factors behind the escalating financial pressures. Spending on sports is rising at nearly twice the rate of spending on academics, according to the Knight Commission. Coaching salaries and construction costs are up dramatically, as football-playing schools, chasing the holy grail of a major bowl appearance, expand stadiums and lure big-name coaches capable of filling them. Scandal-plagued Ohio State in November, for example, guaranteed Urban Meyer a $4 million base salary.
Meanwhile, state appropriations for higher education are declining, which heightens pressure on athletic departments to sell out venues and boost fundraising.
In this environment, a downturn in ticket sales, coupled with a heavy debt burden, can be catastrophic. At Maryland, those factors converged in a perfect storm in recent years. The school’s athletics department deficit, now $4.7 million, is projected to reach $17.6 million by 2017 if not addressed.
Convinced its football stadium was too small and its basketball arena too outmoded for its fan base, Maryland over the past decade expanded Byrd Stadium and added luxury suites, and built the Comcast Center. At the time of construction, officials said the upgrades would pay for themselves through a jump in ticket revenue. Instead, Maryland’s football and basketball teams have struggled, and attendance and revenue have dropped.
As a result, spending on buildings and grounds has soared nearly 78 percent over the past five years, from $4.6 million to $8.2 million, according to data supplied to the NCAA. Debt service on the construction projects alone totals $7.9 million this year — up from $6.9 million in 2010-11. That’s more than 11 percent of Maryland’s athletic department budget, and the figure escalates each year like bad credit-card debt.
That’s just one line-item in a Maryland athletics operating budget that increased 24 percent over the last five years, from $49.5 million in 2005-06 to $61.6 million in 2010-11. Spending on the Terrapins’ coaching staff climbed at an even higher rate, rising nearly 30 percent, from $18.7 million to $24.3 million.