The University of Alabama-Birmingham framed its decision last week to cut its football program as a fiscally pragmatic answer to internal concerns regarding the long-term health of its athletic department. But worsening financial struggles faced by programs outside the Football Bowl Subdivision’s “Power Five” conferences and pending NCAA litigation regarding student-athlete compensation could turn UAB’s decision from an isolated incident into a trend, warned some sports analysts.
“If you look at the Football Bowl Subdivision, all but about 20 schools each year have expenses that exceed revenue,” said Scott Bukstein, assistant director of the DeVos Sports Business Management program at the University of Central Florida. “Less than 2 percent of athletic programs [are] self-sustaining, that do not rely on subsidies.”
UAB is the first school to cancel its Division I college football program since Pacific University did in 1995, a product of the fiscal realities faced by the FBS conferences outside the financially buoyant “Power Five” – the Big 12, Big Ten, Pac-12, SEC and ACC. There is mounting fear that the end of UAB’s football program is only the beginning, with schools in the less-profitable Conference USA, Mountain West, Sun Belt, American and MAC potentially considering a similar move to cut financial losses.
Mountain West Conference Commissioner Craig Thompson said he was confident the strong football traditions of many of his conference's 12 schools will outweigh a potential ripple effect from UAB’s discontinuation. Asked for his opinion on whether the discontinuation of UAB football would influence similarly cash-strapped schools, Thompson replied, “I don’t think so.” But he acknowledged that the NCAA’s changing landscape is cause for concern.
“Seven of the 12 [Mountain West] institutions have been playing football for nearly a hundred years or over a century. They’re huge, important pieces and parts of those universities,” Thompson said during a conference call. “Yes, there are financial issues and some of the new potential expenditures through NCAA legislation can cause even further concerns, but I do not see any of our institutions not playing FBS football.”
U.S. District Judge Claudia Wilken ruled in August that NCAA rules prohibiting student-athletes from receiving compensation other than scholarships violated antitrust laws. Wilken ruled that the NCAA must allow its school to establish trust funds of up to $5,000 per Division I football or men’s basketball player per year as compensation for use of their names, images and likenesses. In addition, schools must now cover the full cost of a student-athlete’s college tuition, rather than observe scholarship limits imposed by the NCAA. The decision is currently under appeal, with a final decision expected sometime in 2015, according to USA Today.
If upheld, the ruling would take effect on July 1, 2016, triggering a massive increase in overhead for all NCAA athletic programs. But non-Power Five schools that lack the name recognition to draw sufficient outside funding or the benefit of lucrative media-rights deals would feel the financial crunch.
Citing the NCAA’s reconstitution of Division I athletics and “prospective legislation,” UAB officials hired the CarrSports Consulting firm to conduct a study on the current and long-term viability of its various athletic programs. The firm found UAB would have to contribute an additional $49 million over the next five years to keep its 24-year-old football program competitive, $22 million of which would go toward maintenance of football facilities. UAB’s athletic department would experience a deficit estimated at $25.3 million over the next five years if it keeps football, as opposed to a projected net revenue of $2 million without it.
“It would be fiscally irresponsible and virtually impossible to keep pace with these growing financial demands without sacrificing the financial health and sustainability of Athletics, or redirecting funds from other critical areas of importance, like education, research, patient care or student services,” UAB President Ray L. Watts said in a public letter, according to USA Today. The school relies on subsidizes for some $20 million of its athletic department’s $30 million operating budget, the fifth-highest such total among Conference USA schools, he added.
Many of UAB’s critics are not convinced the decision was financial. One prevailing theory alleges that the members of the University of Alabama System Board of Trustees with ties to Paul Bryant Jr., son of legendary Alabama head coach “Bear” Bryant, forced the football program’s cancellation over a longstanding beef between the Bryant family and UAB’s athletic department, CBS Sports reports.
There were also questions about whether UAB exaggerated its financial struggles. As many as 33 schools subsidize more money than UAB, while 36 school athletic departments lose more money annually than the Blazers, according to a USA Today database. In fact, only seven FBS schools operate with subsidies and the vast majority of Division I programs lose more money than they earn.
Others, including UAB senior tight end Tristan Henderson in an emotional plea, accused school officials of ignoring the human element of their decision. “You’re telling me it’s because the numbers didn’t look right? The numbers didn’t look right? And you’ll go home and sleep in a comfortable, big-a-- house. But it’s OK,” Henderson told Watts.
Will UAB’s decision trigger a flood of other schools to cancel their football programs before new student-athlete reimbursement statutes upend their budgets? Not just yet, according to Bukstein.
“I do not think we’ll see many, if any schools [cancel their football programs] until there’s some certainty with respect to ongoing litigation dealing with economic support for student athletes,” he said. “I don’t think this will be a huge tipping point.”
But, if the U.S. Circuit Court of Appeals sides with Wilken, it’s possible that several other middling athletic departments would follow in UAB’s footsteps. In that scenario, university presidents could adopt words similar to those Watts used to justify the decision:
“As we look at the evolving landscape of NCAA football, we see expenses only continuing to increase," he said. "When considering a model that best protests the financial future and prominence of the Athletic Department, football is simply not sustainable.”