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Banking on college sports

How making an investment in football and other athletic programs are paying off for colleges and universities
University Business, March 2015
  • UNC-Charlotte’s 49ers join the top level of college football this fall—a move administrators say will create energy on campus and giving the growing university more influence in the NCAA.
  • George Fox University, a small Christian school in Oregon, says its new Division III football team gives it a recruitment advantage over similar institutions.
  • Lafayette College and Lehigh University renewed one of college football’s oldest rivalries in Yankee Stadium last season.

New football teams continue to take the field at colleges and universities each fall, overcoming criticism—from within higher ed and from outside—that sports programs not only suck up money desperately needed by academic departments but also drive up tuition and student fees.

Some experts also predict that the wave of lawsuits the NCAA faces could push the costs of fielding high-level football and basketball teams beyond what many institutions may be able to afford. This anxiety increased in December when the University of Alabama at Birmingham cited financial struggles in shutting down its football program; though as of press time, reports indicated the school might be reconsidering its decision after strong objections from students and alumni.

“What has happened at schools outside of the five, highest-resourced athletic conferences is they’ve had to continue to increase student fees and institutional support to balance the athletic department budget,” says Amy Perko, executive director of the Knight Commission on Intercollegiate Athletics. “Athletic spending has been growing twice as fast as academic spending.”

From 2005 to 2012, academic spending at institutions in the Football Bowl Subdivision, the highest level of college football, grew 6 percent per student, while spending per athlete grew 43 percent and football spending per football player grew 76 percent, Perko says.

The major motivation behind adding football often isn’t revenue. “We’re trying to grow this university—we’re trying to double the size,” says Steve Moniaci, athletic director at Houston Baptist University, which currently has about 3,100 students. “One of things that would get us there quicker than a lot of other things was starting a football program.”

Officials did just that in 2013, with the team beginning as Division II and moving up to Division I this past season.

Leaders at public and private institutions of all sizes continue to believe that big investments in football and other sports can pay equally valuable dividends in areas such as enrollment, visibility, campus engagement and fundraising.

Starting at the top

Rapidly growing UNC Charlotte is home to one of the most ambitious football launches in the nation. After two years of lower-tier play, the UNC Charlotte 49ers will join Conference USA of the Football Bowl Subdivision this fall.

The university also plans to play an annual game against a potentially top-ranked school. But UNC’s team won’t be a revenue generator, Athletics Director Judy Rose says. “When you become a member of an FBS program, you get more media dollars. But will it be a budget where football supports itself? Absolutely not, and we knew that from the get-go.”

The idea of football was so popular with students that they approved an annual $120 debt service fee (for the next 30 years) to help pay back the $45 million spent on a new 15,300-seat stadium that could eventually be expanded to 40,000 seats.

UNC Charlotte expects to grow from 27,000 to 40,000-plus students in the coming years, but it doesn’t need football to drive that enrollment growth, Rose says. Instead, officials at the school—which operates several other top-level athletic programs—wanted more influence in NCAA decision-making. “When you look at the NCAA structure, the conferences that have football all have a voice,” she says. “If you don’t have football, you don’t have a direct voice.”

Football should create more energy on the campus, located 10 miles from downtown Charlotte, as well. The school has a top-ranked soccer team that plays in the fall, but that doesn’t excite students in the way football is expected to, Rose says.

“Football also brings alumni back to campus,” she adds. “We didn’t really have anything that was doing that.”

Beyond football, UNC Charlotte plans to add a new women’s sport every three years, starting in 2016 with golf.

Bringing graduates back to campus also drove the creation of a football program at Houston Baptist, which last fall joined a conference in the tier below UNC Charlotte. “We had been having a lot of trouble getting our alumni and our friends to come back to the campus,” Moniaci says. “The football weekends this fall went a long way toward solving that problem.”

Houston Baptist plays in the Football Championship Subdivision, formerly known as Division I-AA. One reason the university started football was so its athletics programs could join the NCAA. The regional Southland Conference conference of NCAA was excited about the prospect of having its first member in sprawling Houston, but was unlikely to accept the university without football, says Moniaci, the athletics director.

“In Texas, if you’re not playing football, people want to know why,” he says. “If you’re not playing football, you’re not very relevant during a good portion of the year.”

The football program, which costs about $900,000 a year to operate, has also been a driver for enrollment and publicity. In fact, the school has seen record enrollment each of the last two years, and giving is way up. Half of the $12 million spent on the new football stadium—which opened last fall—came from donations.

Under FCS rules, the school can spread 63 scholarships among 90 football players. Houston Baptist’s team had 112 members last season, providing a boost in tuition revenue, Moniaci says.

As far as total athletics participation at the university, eight years ago there were 100 students participating in five sports. Since then, it has added 11 sports, now played by 345 students. “The real growth for the school itself really started when we added football,” Moniaci says.

“Something to rally around”

On the other side of the country and at a fraction of the size of UNC Charlotte—but scoring big with football after just one season—is the 1,000-student-strong College of Idaho. It’s just down the road from athletics powerhouse Boise State University.

“We needed to expand enrollment and expand the mission,” College of Idaho President Marv Henberg says. “I had the feeling in my gut that we would succeed precisely because we are in the shadow of Boise State.”

The college sought out local student-athletes who were academically qualified for its programs, but couldn’t make the team at Boise State. The college added 100 football players—a 10 percent surge in enrollment—so its Coyotes could begin play in the NAIA conference this past season. The team went 4-7 and turned a profit, of sorts.

The college had to build a new athletic facility and put another $1 million into a turf field, high-tech scoreboard and other upgrades at the football stadium in its home city of Caldwell. But when it came to operating the program last year, it spent $950,000 on a team that brought in $1.2 million in revenue, thanks to its 4,500 average game attendance, Henberg says.

The crowds consisted heavily of the college’s students, along with family members of the players. The team gave a spark to a region that’s still keenly feeling the recession. “It just became something to rally around,” Henberg says.”It’s also given us exposure. Let’s face it, football is different from any other sport—it’s got almost iconic status in American culture these days.”

While the games are shown only on the web, local TV stations have provided news coverage. Local newspapers also have done features on several of the athletes.

But the program faced a few support-related challenges getting started. Some faculty and students initially worried that football wasn’t a good fit for the small college. “I think their biggest concern was that it would dilute academic quality,” he says. “They also thought that, being a relatively small institution, adding 100 football players might be overwhelming.”

Henberg eventually got unanimous support from faculty by including them in the college’s study of football programs at five regional colleges of similar size. He encouraged faculty members to call their counterparts who’d had similar concerns about football.

Students threw their support behind the program when administrators vowed to make sure the new athletes would be a part of the campus. “Our academic profile has remained unchanged,” he says. “Football players have the same qualifications as other students, and we have almost no behavioral problems from the team.”

Keeping scholarships out of the equation is another way to ensure football players have equal footing as other students. George Fox University, a Christian school with about 3,900 students in Newberg, Oregon, launched its football team this fall in Division III, where there are no football scholarships. That means the 130 new students playing the sport are paying tuition just like their classmates, President Robin Baker says.

“If you can imagine 130 tuition-paying students, they’re bringing somewhere in the neighborhood of $2.5 million a year—that’s far and above what it costs to run the program,” he says.

Football also brought more community members to campus. Some 15,000 fans attended the school’s five home games, for a 3,330-per-game average that was by far the largest in the school’s athletic conference, he adds. “When you don’t have football in America, the falls are not energetic. The weekends were just totally different this fall.”

What it boils down to, Baker says, is that small, private colleges need a range of programs to attract students. “We have a strong academic program, but so do a lot of other institutions,” he says. “But among colleges on the West Coast that are private and Christian, only three do football.”

Mirroring a trend at many Division III schools, student-athletes at George Fox graduate at higher rates and have higher GPAs than do other students.“We’ve proven we can develop a football program that can fit with the character of the institution and recruit student-athletes to be part of the community,” Baker says. “Whether we can develop a program that can win, that’s an objective for the future.”

Reinventing a rivalry

Even colleges that have been playing football since the 1800s are looking for ways to advance their programs and institutions. Lafayette College and Lehigh University—both Division I-program schools in Pennsylvania—have been playing a rivalry game for 150 years.

This past season, for the first time, the game was played at Yankee Stadium, on the Saturday before Thanksgiving. More than 45,000 fans attended the game, which draws an average 15,000 spectators when played on one of the campuses.

The game, which was broadcast by CBS Sports, will bring in some revenue, but making a profit was “not even a top five goal,” says Lafayette Director of Athletics Bruce E. McCutcheon. “The principal goals were to provide an impactful experience for the student-athletes and for the alumni of the two schools—and place both those schools on the big stage to showcase the institutions.”

The game took four years of collaborative planning, and tickets went on sale a year before kickoff. In the first 10 days, 30,000 were sold. McCutcheon says the alumni response at both schools was “off the charts.”

“We heard so many anecdotes of people who had not come to either campus for a game in years or decades who came to Yankee Stadium because the game was played in New York,” he adds.

Lafayette planned several activities around the game, including a capital campaign kickoff event at New York City’s renowned American Museum of Natural History. Representatives for the two schools also rung the opening bell at the New York Stock Exchange.

“Walking up 42nd Street to Grand Central to go to the stadium on Saturday, the streets were full of people dressed in Lafayette and Lehigh gear,” McCutcheon says. “From my perspective, the whole city seemed to be excited about the game.”

Matt Zalaznick is senior associate editor.

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