Report Examines Effect of Athletics on Higher Education

August 28, 2003

A report commissioned by the National Collegiate Athletic Association (NCAA) examines many commonly held assumptions about the effects of athletics programs on higher education institutions, particularly the economic impacts. Released earlier this month, the report by Sebago and Associates seeks to shed light on two commonly held views about intercollegiate athletics. One camp believes institutions benefit in a variety of ways from increased name recognition through success in the athletic arena – commonly known as the “Flutie effect.” The other view, espoused by the two Knight Commission reports, suggests that athletics programs are often burdensome to institutions, with athletics departments locked in a race to earn and spend the more money than their peers.

Researchers tested ten hypotheses about collegiate athletics using existing research from sources such as Integrated Post-Secondary Education Data System (IPEDS) and required data collected under the Equity in Athletics Disclosure Act (EADA), and a detailed survey of seventeen chief financial officers of Division I-A institutions. The findings focus primarily on football and men’s basketball in Division I-A . Half of the hypotheses were determined to be correct, the remaining half were not proven. Neither the assumptions noted by the Flutie effect nor the Knight Commission reports were confirmed by the available data.

Among the conclusions were:

Operating athletic expenditures in the aggregate are a relatively small share of total higher education spending for Division I-A schools.
Football and basketball markets exhibited increased levels of inequality between 1993 and 2001, and a degree of mobility in expenditure, revenue, and winning percentages.
Over the medium term, increases in operating expenditures on football or men's basketball are not associated with any change, on average, in operating net revenue.
Increased operating expenditures for football or basketball are not associated with medium-term increases in winning percentages, and winning percentages are not associated with increases in operating net revenue.

The researchers caution that data on capital expenditures for athletics is insufficient and may affect the results in some instances.

The full report is available on the NCAA Web site at http://www.ncaa.org/databases/baselineStudy/baseline.pdf.