NCAA SPORTS Study: Athletic budgets don't add up

A claim that schools spend just 3.5 percent of their total budget on sports is disputed.
INDIANAPOLIS (AP) -- Virtually every NCAA school regularly loses money on its sports program, and spending more on athletics does not guarantee winning more.
In its first scientific study on the impact of spending on intercollegiate athletics, the NCAA said Thursday that its members spend an average of about 3.5 percent of their total budgets on sports.
NCAA president Myles Brand trumpeted Thursday's report as "myth-breaking." He said the governing body for college sports would continue to study connections between athletic spending and performance, academics, giving and other areas.
"The public has formed its opinions on spending in college sports by using assumptions on the extremes," Brand said during a teleconference with reporters.
The report challenged views on both sides of the spectrum -- that greater spending on big-time college sports was either a "road to ruin" or a "road to riches," said Peter Orszag, an economist with the Brookings Institution in Washington.
Other findings
The study also showed:
* Greater spending on football and basketball produced neither an increase nor a decrease in a program's revenues, on average, over the study's eight-year time span.
* Increased spending on football or men's basketball did not produce better winning percentages during the eight-year period, nor did higher winning percentages produce more revenues.
* There was no correlation between increased spending and increases or decreases in the measurable academic quality of new students or alumni giving.
Brand recounted conversations with reporters or others in which they guessed that universities spend a quarter or a more of their total budgets on intercollegiate sports. A university with a $2 billion total budget, if it dedicated 3.5 percent to athletics, would spend $70 million.
"It's just not appreciated what the reality of the situation is," Brand said.
Arms race
William C. Friday, the chairman of the Knight Foundation Commission on Intercollegiate Athletics, disagreed. He suggested that talk of an "arms race" was supported by the high salaries that some college football and basketball coaches command, and by studies showing most Division I-A football programs had built new stadiums or substantially renovated existing ones.
Friday challenged the NCAA to compare spending on athletics with how much its members spend on undergraduate programs. Total institutional spending can include costly graduate programs in law or medicine, while almost every athlete is an undergraduate, he said.
"There has been a very substantial acceleration in the cost of fielding athletic teams," Friday, the president emeritus of the University of North Carolina, said from Chapel Hill, N.C. "We are spending a lot more money."
Brand said the NCAA can only study the effects of athletic spending and inform its members of the results but cannot influence how much schools spend on big-time sports.
"It's an institutional decision, and what kind of institution they want to be," Brand said. "We can't judge for individual institutions what their priorities should be."
The NCAA report was prepared by three independent economists and reviewed by peers, using information collected by the NCAA from 1993 to 2001.

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