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Athletic Programs and the Economy

September 29, 2009

by Agnes Jasinski

It's obvious the economy has had an effect on the world of higher education. While there have been reasons to remain optimistic - some schools have created new scholarships to compensate for students' increased needs for aid - many states continue to deal with deep budget cuts, which have had a trickle-down effect on students' financial aid packages. Some have been forced to consider shutting down merit scholarship programs; others have raised tuition.

Schools' athletic programs then aren't immune to the economy's effects. An article today in The Chronicle for Higher Education describes the potential trouble schools could be in if they have recently embarked on big athletic program projects, like new stadiums (University of Minnesota) or extensive remodeling (Oklahoma State). The article compared schools' spending on sports programs to that of homeowners now finding they've purchased properties they can't actually afford. New projects will probably stall until economic projections brighten, and schools may find that it's not so easy justifying pouring money into capital improvements to athletic facilities when those same schools are facing layoffs and budget cuts elsewhere.

Numbers and hard data showing how the economy has affected sports programs has been vague. While schools report anecdotes of slow ticket sales to sports events, others say their endowments remain strong and that their football stadiums are more full than ever before. Perhaps students and alums use sports events as diversions from the economy. Or it's schools with a lot of buzz surrounding their football programs that are doing well this season. Luckily for sports fans, many projects that have been in the pipeline since before the economy began faltering are being paid for through donations and private funding, rather than borrowed money that may be harder to come by and riskier to an administration unsure when things will return to normal.

Or maybe those schools with the big athletic programs are just adding more to their debt. Debt overall has risen at colleges. Over the last four years, the average debt has gone up more than 50 percent, according to rankings of 200 public institutions by Moody's Investors Service. At the same time, revenue at those schools has been down significantly. The Chronicle article suggests funding that has gone to sports facilities has at times been diverted from other campus sites that could use more work, like remodeling old dormitories or improving academic facilities. It can get difficult, though, to criticize spending money to improve programs that bring so much money into a school, especially at schools with high-profile athletic teams. Sports will always be an important piece of many big campuses, and student athletes should still go for athletic scholarships if they have the grades and the talent, since the situation would probably never get so dire that teams would be disbanded.


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