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Colorado State, Rutgers, Eastern Michigan University: Fiscal Insanity in College Sports



Summer is when sports fans take a hiatus from big-time collegiate competitions involving balls. Perhaps it is a good time, then, to reflect on the damage that excessive exuberance over the allegedly positive effects of athletic competitions can create in American universities. This is a tale about three of those schools.

Colorado State University

A few years ago longtime Colorado State University president Tony Frank argued that his institution would advance academically as well as athletically by building a new state-of-the-art football stadium. After a huge controversy over the project in Fort Collins, the stadium was finished last fall at a cost of $239 million, although that does not count millions spent on ancillary projects such as moving a research facility to accommodate the now named “Canvas Stadium.”

Colorado State claims that in its first year of operation, the stadium is operating at a $5.34 million surplus, but local businessman Bob Vangeremeersch has provided some pretty convincing evidence that an honest accounting would show it actually losing $14 million annually (for example, CSU counts as revenue the university’s purchase of a number of premium seats). This is on top of athletic subsidies (from student fees or university funds) of about $20 million annually to support CSU sports. In total, athletic financial obligations well exceed $30 million a year, or about $1,000 for each CSU student.

Early indications are that Canvas Stadium is hardly a boom for CSU. In its first year, 192,369 persons saw six football games. Using Vangeremeersch’s numbers, stadium costs alone were more than $70 per game for each attendee. Did the new facility even attract superstar football players? The team had a seven and six record, culminating in a loss to the second biggest state university of West Virginia in the New Mexico Bowl before a paltry 26,087 fans. Meanwhile, CSU’s academic ranking remains pretty so-so, coming in 239th in the last Forbes Best College list.

Rutgers University

Rutgers is one of the nine colonial colleges founded before the American Revolution. Others in the group, including seven Ivy League schools, have reached very high levels of academic distinction (all in the top 60 on the Forbes list), while Rutgers has languished considerably (158th). Like CSU, Rutgers decided a number of years ago it could gain a national reputation through athletic excellence by joining the most academically respectable of the Power Five athletic conferences, the Big Ten.

Rutgers long has led the nation in sports subsidies. In 2015-2016, for example, the school lost $38 million on sports. But in 2016, the athletic director predicted the school would be in the black within five years. However, in the past, projections have proven radically overly optimistic. In 2015-16, for example, the athletic department spent $13.8 million more than it projected in an early 2014 financial plan. Rutgers touts that the school’s transition to Big Ten membership will be complete in 2021, so it will start getting its full share of TV revenues that the Big Ten receives. On top of everything else, Rutgers sports has been hurt by all sorts of scandals involving athletes and coaches. The 2017 football team had a 4-8 record, putting it near the bottom of the Big Ten. No wonder the Rutgers faculty has been up in arms.

Eastern Michigan University

The poster child of fiscal insanity regarding college sports, however, is Eastern Michigan University (EMU). It is a member of the Mid American Conference, a group of athletic wannabes mostly located near powerhouse Big Ten schools. EMU’s campus is less than seven miles from the Big House of the University of Michigan, a truly financially (and academically) successful athletic powerhouse. At EMU, it is not uncommon for fewer than 10,000 fans to attend football games, yet the school’s athletic subsidies exceed $25 million annually, more than $1,000 for every student attending. EMU has a high proportion of students on Pell Grants, whereas the University of Michigan does not, and Michigan about breaks even on sports. Unlike Michigan, EMU in effect imposes a highly regressive sports tax on its mostly non-affluent students.

Does the football team provide positive publicity for EMU? Hardly. In the 10 years 2008 through 2017, it had one winning football season (with a seven and six record). It had six seasons where it won two or fewer games. What is the possible rationale of continuing this athletic humiliation and fiscal drain?


Richard K. Vedder is a Senior Fellow at the Independent Institute, Distinguished Emeritus Professor of Economics at Ohio University, and co-author (with Lowell Gallaway) of the award-winning Independent Institute book, Out of Work: Unemployment and Government in Twentieth-Century America.


From Richard K. Vedder
CAN TEACHERS OWN THEIR OWN SCHOOLS?: New Strategies for Educational Excellence
In Can Teachers Own Their Own Schools?, Richard Vedder examines the economics, history, and politics of education and argues that public schools should be privatized. Privatized public schools would benefit from competition, market discipline, and the incentives essential to produce cost-effective, educational quality, and attract the additional funding and expertise needed to revolutionize school systems.







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