Description
Is the growing financial divide between the Power 5 and Group of 5 conferences a problem? Why or why not?To get full credit, the answer to the question must be supported with information from all the readings plus at least three (3) other sources identified by the student. Cite all sources (including the assigned readings) in APA style in-text and on a reference page that does not count toward the total. The paper should be at least four pages, double-spaced in 12pt Times New Roman with one-inch margins.
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5/6/2021
Mountain West strikes six-year, $270-million TV, media rights deal | Football | trib.com
https://trib.com/sports/college/wyoming/football/mountain-west-strikes-six-year-270-million-tv-media-rightsdeal/article_71eded22-561e-5ba1-81da-ffc9913fe301.html
MOUNTAIN WEST
Mountain West strikes six-year, $270-million TV, media rights deal
Davis Potter
Jan 9, 2020
Wyoming running back Xazavian Valladay pushes through the Colorado State defense during their annual Borde
rivalry game Nov. 22, 2019 at War Memorial Stadium in Laramie.
Cayla Nimmo, Star-Tribune
Davis Potter
https://trib.com/sports/college/wyoming/football/mountain-west-strikes-six-year-270-million-tv-media-rights-deal/article_71eded22-561e-5ba1-81da-ffc9…
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5/6/2021
Mountain West strikes six-year, $270-million TV, media rights deal | Football | trib.com
ARAMIE — The more lucrative television contract Wyoming and the rest of the
L
Mountain West have been anticipating for months is official — and with a new
partner in the mix.
The league has reached a six-year, $270-million media rights agreement with
CBS Sports and FOX, MW commissioner Craig Thompson announced Thursday. The
deal will go into effect July 1 and run through the 2025-26 season.
CBS remains the primary rights holder, but FOX’s inclusion means the network will
get the rights to the games that were carried on ESPN’s family of networks as part of
the current media rights package, which includes a $1.1-million annual payout for each
member school other than Hawaii, a football-only member. The new deal is worth
approximately $45 million per year, which is expected to nearly quadruple each
school’s cut to more than $4 million annually.
“It was clear from my first conversations with FOX Sports national network president
Mark Silverman and executive vice president Larry Jones that the level of commitment
for FOX and what they’re making towards college sports both on FOX broadcasts and
FS1 is tremendous,” Thompson said. “Also in that conversation, early conversations
with Mark and Larry, they both made it clear they had a significant interest in having
the Mountain West as part of the FOX family and helping and desirous of us growing
the conference.”
Boise State will continue to get the additional revenue it receives under the current
deal to negotiate its home games separately. As part of the new deal, FOX will get
those exclusive rights that ESPN previously held while CBS will get rights to the
Broncos’ conference road games.
Thompson said this will likely be the last contract in which Boise State gets to
negotiate its home games separately — a stipulation that was allowed by the
conference in 2012 as incentive for Boise State to stay in the MW after the school
announced plans to join the Big East. As part of the current deal, Boise State receives
$1.8 million annually in additional revenue.
https://trib.com/sports/college/wyoming/football/mountain-west-strikes-six-year-270-million-tv-media-rights-deal/article_71eded22-561e-5ba1-81da-ffc9…
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5/6/2021
Mountain West strikes six-year, $270-million TV, media rights deal | Football | trib.com
As for the length of the deal, Thompson said six years was the maximum the league
was willing to go given the ever-changing media landscape.
Wyoming taking good with the bad as Mountain West weighs next TV
contract
Davis Potter
“The bottom line is eight, nine or 10 years, we just could not justify because of the
changes potentially we’ll see in the marketplace and the other rights fees that are going
to open up in the next five or six years,” Thompson said.
A concern for Wyoming fans and those around the league has always been the late
start times for football games, but that’s not changing much. The broadcast windows
for FOX will be 11 a.m. to 7:45 p.m. on Saturdays and 5:30 p.m. to 7:45 p.m. on
Fridays. That window on both days extends to 8 p.m. for CBS, though that eliminates
the possibility of any kickoffs later than that. Some men’s basketball games will start as
late as 9 p.m. on the networks.
Thompson said there won’t be a limit as to how many times each team can appear in
the late time slot, but just because there is one, particularly with FOX, doesn’t
necessarily mean MW teams will always be playing in it. Mark Silverman, FOX Sports
president of national networks, noted the network also has a deal with the Pac-12, a
league with most of its members residing in the Pacific Time Zone and therefore an
hour behind many MW member locations.
That could make it easier to put a Pac-12 game in the late slot, but Silverman said it’s
too early to know for sure how many late kicks will be slotted for the MW. Wyoming
played six night games last season, including an 8:15 p.m. local kick at Boise State, an
8:30 p.m. local kick at San Diego State and a 7:30 p.m. local start against rival
Colorado State on a Friday.
https://trib.com/sports/college/wyoming/football/mountain-west-strikes-six-year-270-million-tv-media-rights-deal/article_71eded22-561e-5ba1-81da-ffc9…
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5/6/2021
Mountain West strikes six-year, $270-million TV, media rights deal | Football | trib.com
“One of the benefits of obtaining these rights was to fill a 7 or 8 roughly local kick but
not the sole one,” Silverman said. “I would expect some game times to be more in the
afternoon, some to be in the evening. Occasionally, we’d love to get one actually the
opposite, on the early side, which is really what we’ve been focused on as a network,
that early time frame literally. It was the second-highest rated window in all of college
football last year, our noon eastern time. We’re looking all over the board. We’re not
only focused on late night.”
As part of the new deal, each network will have a maximum of five Friday night
broadcasts. A total of 23 football games and 32 men’s basketball games will be carried
on CBS or CBS Sports Network while a maximum of 23 regular-season football games
and up to 32 men’s basketball games will be broadcast on FOX, FS1 or FS2. CBS can
carry 10 additional football and men’s basketball games on CBS All-Access or its other
linear platforms.
FOX or FS1 will televise the MW football championship game while CBS will continue
to broadcast the men’s basketball tournament title game.
Outside of the 10 potential football and men’s basketball games that could be carried
on CBS All-Access, the new deal doesn’t include any streaming services. But the
conference is still negotiating its third-tier rights, which could change that, Thompson
said.
Follow UW athletics beat writer Davis Potter on Twitter at @DavisEPotter.
Davis Potter
College Sports Reporter
Davis Potter is the University of Wyoming athletics reporter. An Alabama native and 2011 Auburn
University graduate, Potter joined the Star-Tribune in 2018 after five years covering Ole Miss and the
Southeastern Conference. He lives in Laramie.
https://trib.com/sports/college/wyoming/football/mountain-west-strikes-six-year-270-million-tv-media-rights-deal/article_71eded22-561e-5ba1-81da-ffc9…
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7/27/22, 12:54 PM
College Football Looks to Mega-Donors to Help Bail Out Athletics – Bloomberg
Pursuits
College Football Looks to MegaDonors to Help Bail Out Athletics
Donor bases further drive gap between haves and have-nots
Billionaires Knight, Pegula and Ross among the biggest givers
By Jack Pitcher
August 17, 2020 at 10:31 AM MDT
The 2020 college football season is in jeopardy, and billions of dollars are at stake.
Ultra-wealthy donors are likely to be called upon to save the day in the face of an unexpected
evaporation of revenue. But for athletic departments with less-enthusiastic donor bases, financial
catastrophe may be on the horizon.
The Big Ten and Pac-12, two of the nation’s so-called Power Five football conferences, called off their
fall seasons last week, joining several smaller conferences. Both said they’re open to a spring season,
but there are obstacles.
The Ohio State Buckeyes run on to the field during the 2019 Rose Bowl. Photographer: Harry How/Getty Images
https://www.bloomberg.com/news/articles/2020-08-17/college-football-looks-to-mega-donors-to-help-bail-out-athletics
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College Football Looks to Mega-Donors to Help Bail Out Athletics – Bloomberg
Lay-offs, salary cuts and axing entire sports programs are possible outcomes for athletic departments
if their No. 1 rainmaker, football, is shut down for the year. That’s where the donors come in.
“Schools that have a more robust alumni base will be able to weather the storm more easily than other
schools,” said Patrick Rishe, an economist and sports business professor at Washington University in
St. Louis. “I suspect those asks could be afoot.”
Phil Knight Photographer: David Paul Morris/Bloomberg
Included among the billionaire donors funding college football programs are Nike Inc. founder Phil
Knight, who has given about $800 million to the University of Oregon for athletics and academics;
Miami Dolphins owner Stephen Ross, who has contributed nearly $400 million to the University of
Michigan; and Buffalo Bills owner Terry Pegula, who has donated more than $100 million to Penn
State University.
Three power conferences — the SEC, Big-12 and Atlantic Coast Conference — have said for now they’re
moving forward with the fall season.
Requesting contributions to cover an operating deficit instead of something specific, like a stadium
upgrade, can be a tough task for schools. But the programs that have access to billionaire boosters will
https://www.bloomberg.com/news/articles/2020-08-17/college-football-looks-to-mega-donors-to-help-bail-out-athletics
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College Football Looks to Mega-Donors to Help Bail Out Athletics – Bloomberg
be in the best position to ask.
‘Less Guilty’
“When you have donors who have not been as impacted by the economy, and their stock portfolios
have done really well throughout this whole pandemic, you feel a little less guilty about going back to
those folks,” said Karen Weaver, a sports management professor at Drexel University and former
athletic director.
The requests are coming because schools really do need the cash. In a report released last week,
Moody’s Investors Service analysts wrote that some schools will not be able to cut expenses enough to
offset revenue losses from football. And falling donations are expected play a key role in the struggles.
“Donor support may also wane with potential disruptions in household income, tax changes and
booster disinterest because of canceled seasons,” the analysts wrote.
Major football schools generate more than half their athletics revenue from media-rights payments
and ticket sales, according to data from the National Collegiate Athletic Association. Nearly all of that
could disappear if games aren’t played.
The next largest source of revenue, donations, will be key to keeping athletic departments afloat.
Big Giving
Donations are the second-largest revenue source for major college athletic departments
Source: National Collegiate Athletic Association
Note: Revenue is from 2018, the most recent year available
https://www.bloomberg.com/news/articles/2020-08-17/college-football-looks-to-mega-donors-to-help-bail-out-athletics
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7/27/22, 12:54 PM
College Football Looks to Mega-Donors to Help Bail Out Athletics – Bloomberg
Among the top quartile of Division 1 Football Bowl Subdivision schools, donations make up the largest
share of revenue, according to NCAA data. That could further divide college football’s elite programs
that are flush with cash from the stragglers, even within the Power Five.
Requesting Handouts
Billionaires aren’t the only source of donations athletic directors will look to tap. Several schools are
asking season ticket holders to treat the money they spent for canceled games as donations instead of
asking for a refund.
Penn State, which generated the sixth-most revenue in the country last year at $164 million, has
angered fans by refusing to refund the mandatory donation that comes with buying season tickets,
even though the games have been canceled.
Texas A&M University, consistently one of the top fundraisers in college athletics, urged donors to step
up in a recent video posted by the 12th Man Foundation, its athletics-fundraising arm.
“The financial impact of the global health crisis on Texas A&M athletics is significant,” the foundation’s
president, Travis Dabney, said in the video. “Our donors have the ability to help us through this very
challenging situation. “
The Southeastern Conference school raised a record-breaking $740 million in fiscal 2013 when
Heisman Trophy winner Johnny Manziel was quarterback.
Awkward Time
The appeal to fans during a recession comes at an awkward time for athletic departments that have
spent hundreds of millions of dollars over the last decade building world-class facilities that rival their
professional counterparts.
“Schools asking their fans to convert money already paid to a donation are risking future damage to
customer relationships,” Rishe said.
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7/27/22, 12:54 PM
College Football Looks to Mega-Donors to Help Bail Out Athletics – Bloomberg
At least once conference, the Pac-12, is taking drastic measures to mitigate the lost revenue and
potential lack of donor interest. It’s working with a boutique investment bank to secure a $1 billion
loan for its teams to tap in the event no games are played, according to a report in the San Jose
Mercury News. One of its members, Stanford University, announced it was scrapping 11 teams, such as
fencing and men’s rowing.
Read More: College Football Staggers Out of a Wild Week With Nagging Doubts
Uncle Phil
The presence of ultra-wealthy donors has some fan bases more confident than others about their
teams’ financial situation.
When Oregon athletic director Rob Mullens said at a news conference Thursday his school expects to
lose $50 million to $80 million from not playing football this fall, Twitter users were quick to point out
the school’s close connection to its biggest donor.
“Nike will pick up the tab,” wrote one user. “Good thing we have Uncle Phil,” said another.
A spokesman for Nike and Phil Knight declined to comment on whether he’ll be donating to the
university this year.
— With assistance by Janet Lorin
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5/6/2021
SEC
SEC contract with ESPN, ABC gives league more resources to dominate
Analysis
Analysis: New ESPN/ABC TV deal will give SEC even more
resources to dominate college sports
Paul Myerberg USA TODAY
Published 5:40 p.m. ET Dec. 10, 2020
Updated 7:38 p.m. ET Dec. 10, 2020
The SEC’s 10-year contract with ESPN/ABC will allow member schools to make an even larger financial investment in athletics and
trigger the next round of battles between the Big Ten and SEC for dominance of the college sports landscape, increasing the possibility the
two leagues leave the rest of the Power Five in the dust.
ESPN/ABC will pay the SEC “in the low $300 million range” annually, according to Sports Business Journal, a significant increase on the
$55 million the league makes per year from its contract with CBS.
And at a time when nearly every conference and college program are tinkering with annual budgets to meet the demands of the coronavirus
pandemic, the contract reflects how the biggest names in college sports and TV may be immune to the belt-tightening occurring across
amateur athletics.
“I haven’t disclosed our financial terms, whether they be current, past or future,” said SEC Commissioner Greg Sankey in a call with
reporters, “but we worked hard to maximize our future with the Southeastern Conference in this relationship.”
The lucrative agreement, which goes into effect for the 2024 season, could allow the SEC to overtake the Big Ten as the NCAA’s richest
conference. Tax records from the 2018-19 fiscal year reviewed by USA TODAY Sports showed the Big Ten generating more than $780
million in revenue and paying out about $55.6 million to each of the conference’s 12 longest-standing members.
CBS will continue to air first tier SEC games Saturday afternoon at 3:30 p.m. ET and some Saturday evenings through 2023.
The SEC generated $720.6 million in revenue and averaged $45.3 million in payouts to the 13 member schools that received full shares
during the 2019 year. (Mississippi did not get a full share because of its football team was banned from postseason play.)
During the same year, the Big 12 reported payouts ranging from $38.2 million to $42 million, the ACC from $27.6 million to $34 million
and the Pac-12 about $32.2 million.
The increased revenue will allow SEC football programs in particular to make even larger financial investments in facilities, coaching staffs
and recruiting budgets. As one marker of the league’s willingness to outbid the rest of the Power Five, the SEC had 10 of the 15 highest-paid
assistant coaches and five of the seven highest-paid staffs altogether during the 2019 season.
SEC teams have been at the forefront of college football’s ongoing arms race. South Carolina recently invested $50 million in a new
operations center. Missouri paid $98 million to refurbish its football facility. Ongoing renovations at Alabama’s Bryant-Denny Stadium
come with an estimated price tag of $288 million.
The contract will also set the bar for the Big Ten, which is in the midst of a six-year, $2.64 billion contract with CBS, FOX and ESPN that
expires in 2023.
The arrangement struck by the Big Ten in the next three years — a period coinciding with expiring rights deals for the Big 12, Pac-12 and the
College Football Playoff — may move the conference back ahead of the SEC in annual revenue. More importantly, the deal is almost certain
to broaden the gap both leagues have created between the other three Power Five conferences.
By 2024, there may be three distinct if undefined groups in college football: the Group of Five, the Power Five and then the Power Two, the
SEC and Big Ten, well ahead of the rest of the NCAA.
Contributing: Steve Berkowitz
https://www.usatoday.com/story/sports/ncaaf/sec/2020/12/10/sec-contract-abc-espn-gives-league-more-resources-dominate/3884360001/
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John J. Cheslock
David B. Knight
Diverging Revenues, Cascading
Expenditures, and Ensuing Subsidies:
The Unbalanced and Growing
Financial Strain of Intercollegiate
Athletics on Universities and
Their Students
We present a three-part conceptual model that illuminates key dynamics promoting financial unsustainability within intercollegiate athletics. Revenue divergence comprises
the first part as the influx of commercial athletic revenues primarily benefits a small set
of universities housing prominent athletic programs. These schools then increase athletic
expenditures, which promotes expenditures cascades as their spending spurs expenditure
growth at other athletic programs. Because external revenues do not increase alongside
expenditures at these other programs, subsidies ensue as student fees and institutional
subsidies are increased to fill growing deficits. These increases, however, will be difficult to
sustain in an era of tight academic budgets and rising student debt. We describe each part
of the model using a range of organizational theories and use financial data from intercollegiate athletic programs to demonstrate that the patterns predicted by our framework are
supported empirically.
Keywords: economics of higher education, intercollegiate athletics, organizational theory
I think when we make it, we have a right to spend it. That’s the way America is.
—Mack Brown, University of Texas head football coach
We eat what we kill.
—Ed Goble, Chief Financial Officer, University of Texas Athletic Department
John J. Cheslock is Associate Professor in the Department of Educational Policies Studies and Director of the Center for the Study of Higher Education at the Pennsylvania
State University; [email protected]. David B. Knight is Assistant Professor in the Department of Engineering Education and Affiliate Faculty in the Higher Education program
at Virginia Tech.
The Journal of Higher Education, Vol. 86, No. 3 (May/June 2015)
Copyright © 2015 by The Ohio State University
418 The Journal of Higher Education
At Texas, it may be sustainable. But think about the schools that are desperately
struggling to stay in the game and are dramatically increasing the university’s
subsidy of intercollegiate athletics and aren’t succeeding in improving their financial position. Texas, in a certain sense, elevates the stakes of the game so
that schools . . . are further motivated to make financial commitments to try to
catch up.
—Peter Likins, Former President, University of Arizona
Multiple reports have raised concerns about problematic financial
trends within the highest level of competition in intercollegiate athletics (Knight Commission, 2010; Presidential Task Force, 2006). The
nature of the financial challenges within high-level athletics is complicated because the intercollegiate athletics system is extremely diverse,
much like the U.S. higher education system more generally. Some athletic programs acquire revenues from external sources in excess of $100
million, take fewer dollars from student fees or institutional subsidies,
have extremely large and devoted fan bases, and receive heavy coverage by national media sources. Other programs obtain revenues from
external sources that fall below $10 million, rely primarily on funding
from student fees and institutional subsidies, have dramatically smaller
fan bases, and receive more limited attention from the national media.
Still other athletic programs lie somewhere between these two extremes.
Because athletic programs compete on the playing field, compete for
coaches and administrators, and compete for student-athletes, they are
bound together within a complex system. In this article, we seek to
highlight important dynamics underlying that system by presenting the
following three-step framework:
1. Diverging Revenues: A small set of leading athletics programs increasingly generates high levels of revenue from external sources.
2. Cascading Expenditures: Athletic expenditures at leading athletic programs increase when the externally generated athletic revenues at these
programs increase. These increased expenditures among elite programs
subsequently lead other programs to increase their expenditures.
3. Ensuing Subsidies: Increased spending at nonelite athletic programs
occurs without simultaneous growth in external revenues, which leads
to increased institutional subsidies or student fees for athletics.
We describe each of these processes and use financial data from intercollegiate athletic programs to demonstrate that the patterns predicted
by our theoretical framework were present in recent years. A major
question underlying our model is the sustainability of the intercollegiate
Unbalanced and Growing Financial Strain of Athletics 419
athletics system, as the subsidies required to support less prominent athletic programs are large and growing. As we reveal in this article, student fees and institutional subsidies can sometimes exceed $1,000 per
student. If these subsidies continue to grow and/or the financial situations of these institutions and their students deteriorate, substantial resistance to these subsidies may build.
As a backdrop for this dilemma, credit ratings agencies predict difficult financial times in the future for most colleges and universities
(Kiley, 2013). Escalating budgetary challenges within state and federal
governments are likely to lead to reduced governmental support for
higher education (Kane, Orszag, & Gunter, 2003; State Budget Crisis
Task Force, 2012). Colleges and universities are consequently seeking
new revenue sources to replace declining public funding, but the currently available sources are unlikely to replace lost governmental dollars (Cheslock & Gianneschi, 2008). Historically, institutions have relied on heightened tuition and fee revenues to balance budgets, but past
increases in these revenue streams may have led many institutions to
approach their price ceilings. At these schools, further tuition increases
could “price out” qualified students which could more than offset the
increased revenue collected from the remaining students. Cost pressures
may increase concurrently with these declining revenues, acting to complicate this conundrum even further. Because higher education is a personnel-services industry that relies heavily on highly educated skilled
labor and cannot easily reduce costs through technological progress,
costs historically rise faster in higher education than in other industries
(Archibald & Feldman, 2011).
In such a fiscal environment, substantial levels of student fees and
institutional subsidies will be harder to maintain. Our three-step framework provides a new perspective on the dynamics promoting increases
in athletic subsidies over time and illuminates the driving forces behind
those increases. As we demonstrate in the concluding sections of this article, our model clearly and concisely frames the challenges that policymakers and university leaders face and the alternative policies that they
might consider. We also posit that our three-step model could be applied
to other organizations that similarly are linked across a system, such as
higher education institutions in general.
Our Approach: Theory, Data, and Methods
Albert Einstein noted, “Everything should be made as simple as
possible but no simpler.” In accordance with this perspective, we purposefully distilled our core ideas into three basic concepts: diverging
420 The Journal of Higher Education
revenues, cascading expenditure, and ensuing subsidies. The core elements of this article are organized around these three steps, with the
supporting empirical findings for each step presented alongside theoretical explanations.
We drew financial data from USA Today NCAA athletics database,
which contains publicly available data from NCAA financial reports for
nearly all public Football Bowl Subdivision (FBS) athletics programs
for the 2005–2011 fiscal years.1 The sample is comprised of the 95 FBS
institutions that reported sufficient data for the examined variables during the period of study. All figures were adjusted to fiscal year 2011 dollars using the consumer price index (CPI). Because an important aspect
of our theoretical framework considers institutional subsidies provided
to athletics programs, we calculated a “subsidy” variable comprised
of the sum of the following revenue subcategories: student fees, direct
state/governmental support, direct institutional support, and indirect
facilities/administrative support. We refer to the sum of the remaining
revenue categories as “external revenues,” as they represent dollars the
athletic program generated from external sources through ticket sales,
television contracts, or other transactions.
Though this dataset is fairly comprehensive in scope, it contains imperfections. In cases where individual revenue/expenditure categories
did not sum to the total reported revenue/expenditures for a year, we
contacted institutions directly to correct for the discrepancy. These errors were typically caused by improper data entry and were easy to
address. We were unable to adjust for other imperfections, such as accounting irregularities across institutions that have been identified in
previous work (Clotfelter, 2011; Weisbrod, Ballou, & Asch, 2008; Zimbalist, 1999). Because we primarily study basic relationships of considerable strength in this article, measurement error is unlikely to obscure
the examined relationships.
One differential accounting issue is noteworthy. Some institutions
sell tickets directly to students and consider these proceeds to be ticket
revenue, but other institutions charge higher student fees and allow students to attend games without further charge. The data used in this study
do not allow us to correct for this somewhat arbitrary difference. We
consider the former payments as revenues generated by the athletic program and the latter payments as subsidies provided by the student body.
Our analysis will consequently be especially relevant for students who
have no interest in attending a sporting event but are required to pay
athletic fees.
These financial data are supplemented with data from several other
sources used to characterize athletics programs and institutions of
higher education, including the following:
Unbalanced and Growing Financial Strain of Athletics 421
• Institutional Enrollments: Full-time equivalent enrollment data based
on 12-month instructional activity were obtained from the Integrated
Postsecondary Educational Data System (IPEDS).2
• Conference and Divisional Affiliations: Data were readily available and
corroborated from a number of sources, including the Equity in Athletics
Disclosure Act (EADA) dataset,3 the NCAA,4 and end-of-season standings
published by ESPN.5
• Current Athletics Success Measures: A number of measures were used
to gauge the success of an athletic program. These include Sagarin Indices
for both basketball and football,6 the ratings percentage index (RPI) for
basketball,7 NCAA tournament appearance for basketball,8 football winning percentages for multiple seasons,9 season-ending BCS rankings for
football,10 per game season attendance totals for football,11 and final overall score in the Director’s Cup.12 These data were obtained from a variety
of sources, including the USA Today, ESPN, CBS Sports, the National
Association of Collegiate Directors of Athletics, and the NCAA websites.
• Historical Athletics Success Measure: Historical success of football programs, the traditional cornerstone of an athletic department’s budget, was
based on a program’s total number of wins over time.13 Programs in the
top-40 all-time were considered to be the most successful historically.
• Institutional Success Measures: Two measures were used to indicate the
overall success or prestige of an institution: 1) membership in the Association of American Universities (AAU),14 and 2) US News and World Report
ranking.15
We describe the financial situation within the intercollegiate system
using a variety of statistical tools. We employ basic descriptive statistics, correlations, inequality indices, and mobility indices. Graphical
depictions of the data—that thoroughly describe the distribution of
revenues, expenditures, and subsidies across higher education institutions—are also utilized (Cleveland, 1993, 1994).
Empirically Supported Three-Step Framework
In the sections that follow, we present our three-step conceptual
framework. We describe the processes underlying each step and often
rely upon academic theories to illuminate and explain specific points.
We also present empirical evidence regarding the propositions underlying each step.
Step #1: Diverging Revenues
Derek Bok (2003) noted the rapid growth of revenue-increasing opportunities for higher education institutions that were created by the
rise of the knowledge-based economy. Financial opportunities were
422 The Journal of Higher Education
also increasing within intercollegiate athletics, although a different set
of forces were driving revenue growth. For example, television became
an important revenue source over time, especially as cable television
expanded and the country grew more affluent (Clotfelter, 2011). Elite
athletic programs gained the most from the rise of television because
their games were disproportionately broadcast, which gave them an unequal share of the revenue and visibility associated with national television coverage (Dunnavent, 2004, pp. 64–66). The benefits grew more
unequal after a 1984 Supreme Court decision that prevented the NCAA
from limiting the number of games on television and allowed individual
schools or associations of schools to negotiate directly with television
networks. Elite athletic conferences were for the first time permitted
to retain the revenues
