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September 08, 2004

New Study Debunks Conventional Wisdom On Arms Race Spending

FROM THE OBJECTIVITY AND CLARITY THAT ARE OFTEN—BUT NOT ALWAYS—INTEGRAL INGREDIENTS OF ACADEMIC RESEARCH comes a meticulous report finding that winning athletics programs do not result in a significant increase in donations or student applications.

We’ve all heard this before. We have been exposed to previous studies that have come to the same conclusion. But many have chosen to ignore such findings.

And so the arms race continues.

Commissioned by the Knight Foundation Commission on Intercollegiate Athletics, the study was authored by Cornell economics professor Robert H. Frank.

And “frank” and straightforward the study certainly is. Professor Frank consistently and convincingly debunks the popular wisdom—irrational and groundless that it often can be—that increased athletics spending will lead to the Promised Land.

Over the course of over 13,000 words, Professor Franks backs up his conclusions with logic and lucidity. At first blush, he comes off as an athletics non-fan, but as one reads through the study, Dr. Frank reveals himself to be a properly objective researcher on the subject.

Some tidbits:

• On the widely held belief is that successful athletics programs generate general benefits, Professor Frank is unambiguous throughout his study. "If success in athletics does generate the indirect benefits in question, the effects are almost surely very small," he says.

• Regarding the arms race, Dr. Frank observes that athletics budgets increased more than twice as fast as university budgets over all in Division I institutions from 1995 to 2001.

• Among the contributors to the dramatic increase is salaries for NCAA Division I-A football coaches, which have increased more than 80% in real terms over the past six years. Last year’s average annual salary—salary only, not extras—was $388,000.

• Dr. Frank proposes mandated limits on athletics spending (which has been disallowed by antitrust authorities): “If all institutions cut back in tandem, competitive balance would be maintained.” He advocates greater “arms control” in college sports, in which governing bodies such as the NCAA (if permitted by the antitrust authorities) would create incentives for each program to limit its expenditures.

• On the issue of antitrust exemption, Purdue AD Morgan Burke says, "I've always been a guy in favor of merit and market. Let the marketplace set the rate, not something artificial. Maybe there are some people competing in Division I who should be in Division II or III." Well said, Mr. Burke.

• He concludes that limits would have no effect on donations and applications: “The empirical literature provides not a shred of evidence to suggest that an across-the-board cutback in spending on athletics would reduce either donations by alumni or applications by prospective students.”

The “Flutie Factor” (the miraculous Hail Mary pass play by Boston College’s Doug Flutie in 1984) is often cited as the seminal event of the realization that athletics programs can bring prestige and glory quickly and powerfully.

However, BC public affairs director Jack Dunn said that the Flutie years (1981-84) gave the school heightened exposure at a time when it was already making a transition from a regional university to a national university on the strength of its academic reputation.

"We would not have benefitted from national exposure if we didn't have an excellent academic program to back it up," said Dunn.

However, Dunn also said that application numbers attributed to the “Miracle in Miami” were inaccurate. He said that in 1984, BC received 14,398 applications (for 2200 incoming freshman places). In 1985, the applications increased to 16,163, then dipped in 1986 to 14,986. The number has increased steadily to last year's total of 22,500--making BC the fourth-most applied to private university in the country.

Meanwhile, on the contribution front, Arizona State’s David Benedict, Associate Athletic Director for Development, told College Athletics Clips, “Notwithstanding the findings of this study, my experience has been that athletic success can play a considerable factor in donor willingness. While many donors will give regardless of athletic achievement, there are many who are affected by the national and local exposure a Division I institution receives when they win consistently and win big.”

Dr. Frank goes so far as to quote philosopher / economist Adam Smith regarding man’s tendency to overestimate gains (i.e.-spend more on the arms race) and underestimate losses (i.e.-inefficient diversion of funds from academics to athletics).

He quotes Smith, “The over-weening conceit which the greater part of men have of their own abilities, is an ancient evil remarked by the philosophers and moralists of all ages. The chance of gain is by every man more or less over-valued, and the chance of loss is by most men under-valued.”

Heavy stuff. Translation? Illogical ego and sense of grandeur has caused the arms race.

link to the full report: www.knightfdn.org

(this 710 word excerpt—with accompanying commentary—was distilled from a total of 14,000 words from the original report "Challenging the Myth: A Review of the Links Among College Athletic Success, Student Quality, and Donations," the Knight Commission press release of 9-7-04, and articles from the Chronicle of Higher Education of 9-8-04 and the Boston Globe of 9-8-04)