Keeping score on the world of college sports
The sting of sports cuts. The prospect of player unions. And a call for getting rid of the NCAA.
In an unrestrained dialogue, the all-star panelists in a session on college sports at the 2021 SIEPR Economic Summit took on these touchy topics. They provided different — and sometimes conflicting — perspectives on some of the toughest challenges facing universities and student athletes.
“Do you want me to leave the Zoom call right now — let you speak freely?” Bernard Muir, the Jaquish & Kenninger Director of Athletics of Stanford, quipped at one point during the online session.
Muir listened as Nnemkadi Ogwumike, ’12, a former Stanford basketball legend and now a power forward for the Los Angeles Sparks, WNBA All-Star, and president of the WNBA Players Association, talked about how the voices and needs of student athletes should be heard and addressed.
Ogwumike said the idea of student-athlete compensation was “just a thought” among athletes when she was at Stanford 10 years ago. But with legislation that will expand student-athletes’ abilities to unionize or be paid for use of the name, image and likeness, now these ideas “have evolved from idealism to realism.”
“Without discussions on a broader scale — like the ones we’re having today — then inevitably that (unionization) could happen,” she said.
“But I actually hope it doesn’t get to the point of unionizing,” she said. “That’s why we’re here today talking about it.”
Muir laid out how wild “the arms race” in college sports had become in the past decade — moving beyond coach’s salaries and facilities to rafts of psychologists, nutritionists and sports science.
“The last 12 months has exposed and exacerbated significant flaws in the economic model of college sports,” Muir said, in explaining Stanford’s decision to discontinue 11 of 36 of its varsity sports. “And our most viable path to maintain its leadership position in college sports and the Olympic movement was to concentrate our resources on a fewer number of sports.”
But even as Stanford is working to “future-proof” its business model with a historic fundraising effort, Muir said he is concerned that the existing gap between the haves and have-nots will only widen.
“There are no easy solutions,” Muir said. “But one thing that I think we need to start exploring in earnest is effective national spending control policies that limit expenditures on sport-by-sport basis, ensure gender equity and account for differences between schools on items such as scholarship costs and regional costs of living.”
Roger Noll, a leading sports economist and a senior fellow emeritus at SIEPR whose expert testimony has played a role in pivotal court decisions involving college sports, said revenue for college sports, boosted by television broadcasting, went through a period of tremendous growth in the 90s and 2000s.
In football and basketball programs, revenue was growing at the rate of 8 to 9 percent every year, essentially doubling every seven years. “In that world, it was like manna from heaven —this enormous amount of money was being rained on schools,” Noll said.
And as colleges competed to retain the best coaches to get them to bowl games and tournament series, money talked. The annual salary for the Duke University basketball head coach, for instance, climbed from $400,000 in 2000 to now nearly $10 million.
At the University of Alabama, 40 percent of the football revenue goes to coaches and trainers, while less than 10 percent goes to financial aid for players, Noll said. (That’s $9M in the coach’s salary, $9 million for sports trainers, and $4 million to the football players.)
But Noll said sports revenue growth seems to have peaked around 2015 and had been waning even before the financial crush of the pandemic. Sports viewership on television is “catastrophically falling” and other streaming methods are taking hold, he said.
The machinery of college sports needs to adapt.
“Hollywood has figured it out with their streaming services,” he said. “Sports hasn’t figured it out yet, and in particular, college sports hasn’t figured it out at all.”
Expect some agony in the next decade
“It’s going to be much more painful,” Noll said. “In the past 30 years, it was, how do we spend the 8 to 9 percent in revenue growth. Now it’s going to be, how do we cut the budget by 8 to 9 percent every year.”
What would be the single biggest change to make a difference? asked the session moderator, Blakey Vermeule, a Stanford English professor who has taught about sports and culture.
“Give the economic governance, rule-making authority solely to the sports conferences and eliminate the NCAA,” Noll said.
The system will work better without the NCAA exercising monopoly power, he said.
And what can Stanford do better? Vermeule asked Ogwumike.
“It has to start from a perspective of equality and equity in order for anything to matter because at the end of the day, yes, different sports bring different revenue, but if everyone has the same starting line, then there won’t be so many issues moving forward.”
The university should change its relationship with athletes so they feel more comfortable to speak out, she said.
Noll encouraged Stanford to be a stronger leader and protect the interest of its student athletes.
Muir agreed: “We need to lead, but we need to have followers as we’re leading.”