Dave Saves College Sports
The University of Iowa announced that it will be cutting four athletic programs starting in the 2021-22 school year as revenue decline due to COVID-19, and the apparent absence of college football, continue to dismantle athletic departments across the country.
The Hawkeyes will drop Men’s Gymnastics, Men’s Tennis, and Men’s and Women’s Swimming and Diving from their program, joining Stanford, Boise State, Dartmouth, and a long list of Division I schools that have cut nonrevenue sports in an effort to trim expenses.
Despite the vast economics departments, numerous professors, and most prized intellectuals, the universities all seem to have the same plan when it comes to making up for revenue loss in the world of college sports. Cut nonrevenue sports and raise tuition.
That’s when I thought about the movie Dave, and how it could save college sports.
Dave is an early 90’s movie in which Kevin Kline plays an ordinary Joe who just happens to look exactly like the President. Long story short, Dave ends up trimming $650 million off the National Budget in a oval office lunch meeting by seeking the advice of another ordinary Joe, his neighborhood tax accountant, and after working with department leaders, cutting the budget, reallocating funds to a local foundation for kids, and convincing the Department of Defense to hold off payments to delinquent defense contractors and instead investing those funds into interest bearing savings accounts, saves the day.
One can argue about the importance of tennis, soccer, or any nonrevenue sport within a college system, but within the business of education, finding a little extra money shouldn’t be an issue. The University of Iowa has an endowment worth 1.58 billion dollars, 35,000 students, an average out-of-state tuition rate of $47,000 per year, and if I were Dave, the ability to find about $3.5 million in order to save the day.
- The first idea is to simply expand the college football season an extra three games. I understand that 2020-21 will be a a disaster, but the Hawkeyes average about $3.4 million in ticket revenue every Saturday, and another $200,000 in parking and concessions. In five years it won’t matter if you pay the players, add ping pong to the list of department athletics, or hire Nick Saban as your coach, the University will be profitable.
- Increase the acceptance rate at your school by two percent. Stanford dropped eleven sports for a reported savings of $5 million dollars a year. 48,000 high school graduates applied to Stanford last year, but only 1700 ended up as a freshman on campus. With a sticker price of roughly 70K, about 75 more incoming students would cover the difference.
- Use those giant endowments. I know there are rules to how you can use specific endowments, but I doubt there are rules to using the interest accumulated. Dartmouth cut its golf, swimming, and lightweight crew programs in order to save an estimated $2 million a year. Dartmouth’s endowment is $5.7 billion. I am no Ivy-Leaguer, but I am sure some kid on campus can show Dartmouth how to use the Robinhood app to invest in Apple or Tesla and easily cover the difference.
- Instead of scrutinizing athletic programs, scrutinize your hiring practices. 75% of the cost of running a university is tied up in personnel expenses. I’m not saying that a well-qualified professor doesn’t deserve a nice salary, benefits, and tenure. But a lesser paid assistant professor, adjunct professor, or part-time teacher can bore you just as fast.
- Have in-person classes just two days a week. It’s college. The only purpose of getting out of bed and heading to a classroom is if the student has a lab or was getting up to hit Starbucks anyway. 40% less need for classrooms could mean 40% savings in all building related expenses.
- Sponsorship and naming rights. If the Boise State Coppertone Swim Team needs to compete at the Speedo Complex, or the Brown University Titleist Golf Team has a match at the Mutual of Omaha-Prudential Investments Golf Club….so be it.
Does it make sense to spend university money to fund nonrevenue athletic programs like fencing or squash? Probably not. But keep in mind that in recent years football teams like UCLA, West Virginia, and Purdue have failed to show a profit, while less than half of division I basketball programs turned a profit in 2018. With increase costs and lost revenues due to COVID-19 across college athletics…are you sure your team isn’t next?
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