Fluent Essays

InstructionsIn this assignment, you will gain a better understanding of the economic trends and challenges that have shaped sports as we know them today.For this task, use information from your assigned readings and your own research, and then write a paper that analyzes the economic trends and challenges in sports as they pertain to one of the following areas:Interscholastic SportsCollegiate Sports` ( This research paper will focus on collegiate sports)Professional SportsClub or Recreational SportBe sure to address the following questions in your paper:What is the overall industry size and average organization size?What is the total monetary market size (in millions)?Has the market grown or declined?What is the market growth rate?What are the current economic trends at this level of sport?Are the long-term forecasts positive or negative?What are the economic challenges at this level of sport?What are some strategies you would use to confront these challenges?Length: 5-7 pages, not including title and reference pagesReferences: Minimum of three to five scholarly resourcesYour paper should demonstrate thoughtful consideration of the ideas and concepts presented in the course by providing new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards. Be sure to adhere to Northcentral University’s Academic Integrity Policy. financing_sport.pdf proquestdocuments_2020_05_28__1_.pdf proquestdocuments_2020_05_28.pdf it_s_all_about_the_benjamins_.pdf athlete_centric_expenses_in_ncaa_power_5.pdf Unformatted Attachment Preview 2 Challenges Facing College Sports THE FINANCIAL STATUS OF INTERCOLLEGIATE ATHLETICS The Organization of College Sports Over the last two decades, college athletics has become an increasingly prominent part of the sports landscape in America. By 2012, 1,378 US colleges and universities operated comprehensive varsity sports programs, spending more than $9 billion a year on intercollegiate athletics.1 Close to 80\% of these programs (1,098) are members of the National Collegiate Athletic Association (NCAA) which is the primary regulatory body for college athletics. The organization provides a vehicle by which members create and enforce rules governing eligibility, recruiting, financial aid and playing and practice seasons. The NCAA conducts championships in 33 men’s and women’s sports. Its primary stated purpose is to ensure fair competition and to enhance the student-athlete experience. The National Association of Intercollegiate Athletics (NAIA) provides similar governance and oversight for smaller colleges and universities across the US. In 2011, the NAIA had 290 member institutions. In Canada, the national governing body for collegiate sport is Canadian Interuniversity Sport (CIS; formerly, the Canadian Intercollegiate Athletic Union). CIS has 54 member colleges and universities that compete in nine national championships. As shown in Table 2.1, the 1,098 Table 2.1. NCAA schools affiliated with the NCAA are Membership by Division separated into three divisions. Division I Number of is the highest level, and includes the Members Division leading conferences and high-profile inIA (FBS) 121 dependent schools (e.g., Notre Dame), 125 whose members commit millions of dol- IAA (FCS) 101 lars annually to sustaining high-profile I (without football) athletic programs. Division I has 347 II 308 member institutions. Division II proIII 443 vides an intermediate level of competi- 05/28/2020 - RS0000000000000000000001039304 - Financing Sport 50 Chapter Two tion for affiliated members. The 308 active members of Division II are typically regional institutions with smaller enrollments (average enrollment around 4,500). Very few athletes competing at the Division II level receive full grants-in-aid (“full rides”). Many, however, will receive partial athletic scholarships and/or some level of financial support from the institution. Division III of the NCAA represents schools that offer varsity sports as essentially an extracurricular activity for students. The 443 schools competing at the Division III level de-emphasize the commercial aspects of college athletics. Member schools are not allowed to provide athletic scholarships and may not establish private endowment funds for the express purpose of supporting athletics. The NCAA has imposed minimum requirements for admission to each of the three divisions. Eligibility requirements are the most demanding for Division I. In order to qualify for inclusion at this top level, member institutions must sponsor a minimum of 14 varsity sports, at least seven for men and seven for women (or six for men and eight for women). In 2007, the NCAA adopted a new classification scheme for Division I schools playing football. Athletic departments with large-scale investments in football (highly paid coaching staffs, elaborate facilities) were placed in the Football Bowl Subdivision (FBS; formerly known as the Division I-A) and schools with a less intensive financial commitment to football were assigned to the Football Championship Subdivision (FCS; formerly known as Division I-AA). To meet the threshold for inclusion and continuation as a FBS member, schools must meet a minimum attendance requirement of 15,000 in actual or paid home attendance per game every other year. FCS schools are exempt from a minimum attendance requirement. However, all “D1” level schools must comply with minimum grants-in-aid or scholarship requirements for each sport. For football, FBS members are allowed to offer a maximum of 85 scholarships of which no fewer than 90\% must be awarded in any given season. The threshold for FCS subdivision schools is considerably lower. The NCAA allows FCS schools to offer 63 scholarships to football players. However, FCS programs are afforded greater flexibility in awarding grants-in-aid to athletes playing football. Unlike FBS schools, which can offer only full scholarships to individual players, FCS programs are allowed to offer partial grants-in-aid. Therefore, most FCS football programs divide their 63 scholarships among 85 players to fill out a complete roster. To maintain their FCS status, no fewer than 76.5 players must receive some form of scholarship support. Eligibility standards for Division II and III NCAA members are far less stringent. Both divisions require schools to sponsor a minimum of 10 varsity sports, at least five sports for men and five for women. While Division II programs may offer athletic scholarships, the NCAA imposes much stricter limits on the number of scholarships awarded to teams in almost every sport. For example, Division II football programs are allowed to give a maximum of 36 full scholarships compared to 85 full scholarships at the Division I level. While the discrepancy between Division I and II programs is not nearly as dramatic as for football, Table 2.2 shows Division II athletic departments offer fewer scholarships to men and women in every sport except women’s rowing and ice hockey, and men’s and women’s tennis. 05/28/2020 - RS0000000000000000000001039304 - Financing Sport Table 2.2. Scholarship Limits by Sport for Men and Women By NCAA Divisions Max. # of Scholarships Div. I Sport Archery Baseball Men’s Div. II Women’s Men’s 0 5 0 Women’s 9.0 11.7 0 9.0 0 Badminton 0 6 0 10.0 Basketball 13.0 15.0 10.0 10.0 0 5.0 0 5.0 12.6 18.0 12.6 12.6 0 15.0 0 15.0 4.5 5.0 4.5 4.5 0 12.0 0 6.3 Football FBS (Div. 1–A) FCS (Div. 1AA) 36 0 85 63 0 0 Golf 4.5 6.0 3.6 5.4 Gymnastics 6.3 12.0 5.4 6.0 Bowling Cross County/Track and Field Equestrian Fencing Field Hockey Handball 0 0 0 12.0 Ice Hockey 18.0 18.0 13.5 18.0 Lacrosse 12.6 12.0 10.8 9.9 3.6 0 3.6 7.2 0 20.0 0 20.0 Skiing 6.3 7.0 6.3 6.3 Soccer 9.9 12.0 9.0 9.9 Softball 0 12.0 0 7.2 Rifle Rowing Squash 0 12.0 9.0 7.2 9.9 14.0 8.1 9.0 Synchronized Swimming 0 5.0 0 5.0 Team Handball 0 10.0 0 12.0 Tennis 4.5 8.0 4.5 6.0 Volleyball 4.5 12.0 4.5 8.0 Water Polo 4.5 8.0 4.5 8.0 Wrestling 9.9 0 9.0 0 221.31 249.0 163.9 229.5 Swimming and Diving TOTAl 1. The total number for FCS athletic programs is 199.3 Source: NCAA Sports Sponsorship and Participation Rates Report, 1981–82—2009–10 05/28/2020 - RS0000000000000000000001039304 - Financing Sport 52 Chapter Two Participation Patterns for Men and Women Closer examination of Table 2.2 reveals that across all varsity sports at the Division I level, there are potentially more athletic scholarships available to women than men. A comparison of individual sports at both the Division I and II levels shows that with few exceptions, women have been allocated more grants-in-aid than for the equivalent men’s team. For D1 programs, the uneven pattern is true for basketball (women 15, men 13), track and field (women 18, men 12.6), gymnastics (women 12, men 6.3), soccer (women 12, men 9.9), swimming and diving (women 14, men 9.9) and volleyball (women 12, men 4.5). In large part, the disproportionate allocation of scholarships is a result football, a sport exclusive to men, receiving four times as many scholarships as any single women’s sports team. The 20 grants-in-aid awarded female rowing programs are dwarfed by the 85 full rides available to FBS football teams. No other sport comes close to the number of scholarships provided for football. Consequently, under the NCAA’s existing allocation arrangement, the only way institutions can come close to achieving mandated federal gender equity standards is to provide disproportionally more scholarships to women across a wide range of other sports. Table 2.3 identifies the complete list of varsity sports sponsored by the NCAA at the Division I level. The inventory provides a breakdown of the number of teams, number of athletes and average squad size for each men’s and women’s sport. The NCAA recognizes 23 individual and team sports for women and 19 for men. Five sports are classified as Coed Sports, in which men and women participate jointly: equestrian, fencing, riflery, sailing, and skiing. In addition, the NCAA created a category called “Emerging Sports.” In an effort to provide women with greater participation opportunities, in 1994 the NCAA established a Gender-Equity Task Force for the purpose of identifying sports that had the potential to become classified as championship sports. In order to gain championship status, a minimum of 40 athletic departments must have varsity teams competing in the sport. Of the nine sports on the original emerging sports list, five (bowling, ice hockey, rowing, water polo and squash) have become NCAA-recognized championship sports. Rugby, sand volleyball and equestrian are making progress toward becoming championship sports. Importantly, schools are permitted to count emerging sports toward meeting the minimum NCAA eligibility requirement for Division I and II status. No collegiate athletic program comes close to offering the full menu of participation opportunities. Indeed, only a handful offer more than 30 sports for men and women— most notably Ohio State and Stanford, which sponsor 36 and 35 teams, respectively. The vast majority of athletic programs offer a much more limited number of options. In 2010, the average Division I athletic department sponsored 19 teams, 9 for men and 10 for women. Division II institutions offer a more restricted number of participation opportunities, sponsoring on average approximately 14 sports teams (6.7 for men and 7.6 for women). At the Division III level, athletic programs sponsored an average of 17 teams, eight for men and nine for women. The more active profile at the Division III level corresponds to the division’s emphasis on student participation in sport as an important extracurricular activity. In addition, it reflects the division’s financial reality. 05/28/2020 - RS0000000000000000000001039304 - Financing Sport Table 2.3. Sports Participation by Gender. Division I Men Sport # of Teams # of Athletes Women # Avg. Squad # of Teams # of Athletes # Avg. Squad Archery 0 0 N/A 0 0 N/A Badminton 0 0 N/A 0 0 N/A Baseball 294 9,964 33.9 N/A N/A N/A Basketball 333 5,182 15.5 332 4,766 14.4 0 0 N/A 30 266 8.9 306 4,796 15.7 331 5,752 17.4 0 0 N/A 18 739 41.1 Fencing 20 374 18.7 23 399 17.3 Football FBS FCS 238 120 118 26,325 14,319 12,006 110.6 119.3 101.7 N/A – – N/A – – N/A – – Golf 291 2,973 10.2 245 2,112 8.6 Gymnastics 16 311 19.4 63 1,054 16.7 Ice Hockey 58 1,605 27.7 35 793 22.7 Lacrosse 58 2,685 46.3 89 2,444 27.5 Rifle 20 142 7.1 23 137 6.0 Rowing 28 1,303 46.5 86 3,221 60.7 Rugby 0 0 N/A 1 19 19.0 Sailing 10 241 24.1 0 0 N/A Skiing 12 191 15.9 13 203 15.6 Soccer 197 5,579 28.3 313 8,302 26.5 Softball N/A N/A N/A 279 5,539 19.9 Squash 10 154 15.4 9 119 13.2 138 3,877 28.1 194 5,392 27.8 0 0 N/A 0 0 N/A Tennis 258 2,639 10.2 313 2,905 9.3 Track, Indoor 252 9,578 38.7 303 11,816 39.0 Track, Outdoor 270 10,812 40.0 310 11,934 38.5 Volleyball 23 471 20.5 319 4,752 14.9 Water Polo 22 586 26.6 32 734 22.9 Wrestling 82 2,567 31.3 N/A N/A N/A 2,938 92,535 3,439 77,129 Bowling Cross Country Equestrian Swimming/Diving Synchronized Swimming TOTAL Source: NCAA Sponsorship and Participation Rates Report: 1981–82 to 2009–10 05/28/2020 - RS0000000000000000000001039304 - Financing Sport 54 Chapter Two The exemption from having to underwrite the cost of expensive athletic scholarships means Division III programs are better able to afford to offer a broader variety of varsity sports. Tables 2.2 and 2.3 show that women are offered a broader range of sports in which to participate and a slightly greater number of potential athletic scholarships at the Division I level than men. Despite these advantages, the overall participation of males exceeds that of female student athletes. Of the nearly 170,000 students participating in Division I level sports in 2010, 54.5\% or 92,535 were men, compared to 77,129 women.2 The proportion of male to female student athletes is even higher at the Division II level, with 59.2\% of the participants being male. According to the NCAA, in 2010, the average member institution had 406 student-athletes, 232 male and 174 female. There are a number of reasons why more men than women participate in intercollegiate athletics. A core factor is that women were not afforded the same opportunities to compete in college sport until much later than men. Women’s sports did not become a part of the NCAA until 1982. For the first 70 years of its existence, the NCAA provided opportunities for only male athletes. In fact, the NCAA initially opposed the passage of Title IX, the landmark legislation that would require equal treatment in athletics for women (a section on the impact of Title IX is included later in this chapter). Prior to the adoption of Title IX, the NCAA feared that elevating the status of women would threaten its control and dominance over intercollegiate athletics.3 With the passage of the law, and subsequent growth of women’s sports, the NCAA opportunistically determined that offering membership to institutions sponsoring women’s sports was in the organization’s best interests. Not surprisingly, since the NCAA’s inclusion of women’s sports in late 1982, female participation rates have increased dramatically. The total number of women participating in NCAA-sponsored sports has almost tripled over the last three decades, growing from 74,239 in 1982–83 to 186,460 in 2009–10.2 While women have made substantial progress, they still have some catching up to do. The total number of men competing in NCAA sports across all three divisions grew to 249,307 in 2009–10. An examination of average squad sizes reveals some interesting differences in current levels of participation between men and women (see Table 2.3). A comparison of Division I sports in which both men and women compete shows that in almost every case a greater number of men participate in the sport than women. Surprisingly, even in several sports where women receive a higher number of scholarships, the average squad size was larger for men than for women. Despite the increased opportunities for financial support, in the average number of women on varsity rosters for basketball, golf, soccer and gymnastics is fewer than men. Some suggest the larger squad size for men is primarily a function of supply and demand. There are considerably more boys participating in high school sports than girls. During the 2009–10 school year, 4.6 million boys and 3.2 million girls participated in high school sports. Substantial differences exist in the number of boys and girls competing in sports like basketball (boys 540,207, girls 439,550), track and field (boys 572,123, girls 469,177) and golf (boys 157,756, girls 70,872). While more boys than girls are playing soccer (boys 391,839, girls 356,116) and competing in cross country (boys 239,608, girls 201,968), the mar- 05/28/2020 - RS0000000000000000000001039304 - Financing Sport Challenges Facing College Sports 55 gin of difference has closed considerably over the past five years, with girls making substantial gains. By 2010, girls had eclipsed boys in two sports: tennis (girls 182,395, boys 162,755) and swimming and diving (girls 158,419, boys 131,376). The participation figures do give credence to the claim that greater roster sizes in several sports are attributable to there being more highly skilled male athletes available to compete at the collegiate level. Many of whom are willing to “walk on” or participate as members of a varsity squad without any financial assistance. GRIM FINANCIAL REALITIES The cost of intercollegiate athletics has grown enormously over the past several decades. During the last decade alone, the average annual operating budget of a Division I, Football Bowl Subdivision program more than doubled from $21.9 million in 2000 to $46.7 million in 2010.5 Despite the tremendous increase in investment, the overall financial state of intercollegiate athletics is grim. In 1999, the executive director of the NCAA asserted, “You can probably count on your two hands the number of athletic departments that actually have a surplus” (p. 157).6 Over a decade later, his claim still accurately depicts the overall economic condition of collegiate sport. The NCAA’s annual report on revenues and expenses showed that in 2010, only 22 of the 120 FBS-level programs generated a net surplus.* More than 80\% of the largest athletic programs are losing money, and smaller colleges at the Division III and NAIA levels are experiencing even greater financial pressures, with close to 100\% relying heavily on institutional subsidies to operate on even a breakeven basis.7 The extent to which athletic departments are struggling financially at all levels is evident in Table 2.4 (overleaf ), which reveals that in 2010 all three divisions fell far short of financial self sufficiency. In fact, the median operating deficit for a FBS program was $9.44 million. This figure represents the net difference between total generated revenues (e.g., ticket sales, NCAA and conference distributions, media rights, private donations and other sources excluding institutional or governmental support or student fees), less total operating expenses. Even with considerably less investment, median operating deficits are even greater at the FCS (formerly known as Division IAA) level, with losses averaging $9.79 million. For several decades, the NCAA has been collecting revenue and expense data from athletic departments in all three divisions.# A detailed breakdown of the financial condition and performance of college athletic programs is reported annually. *A closer examination of available data shows that in fact only eight FBS schools are “truly” financially self-sufficient. Fourteen of the 22 programs showing net revenues in the NCAA reports received some level of “allocated support” (e.g., student activity fees, direct general fund appropriation). The eight wholly financially-independent “public” university athletic programs are: LSU, Texas A&M, Purdue, Nebraska, Texas, Oklahoma, Penn State and Ohio State. #While the NCAA Revenues and Expenses reports go all the way back to 1969, 2004 is considered the baseline year for trend analysis. In 2004, substantial changes were made in the manner in which data were both collected and reported. Therefore, meaningful comparisons from year to year are only possible dating back to 2004. 05/28/2020 - RS0000000000000000000001039304 - Financing Sport Chapter Two 56 Table 2.4. Median (and Range) 2010 Revenues and Expenses For Division I Institutions by Subdivision FBS FCS Generated Revenues $35,336,000 ($3.8 million to $143.5 million) $3,289,000 ($279,000 to $14.4 million) Total Revenues $48,298,000 ($9.5 million to $143.5 million) $13,189,000 ($3.1 million to $40.2 million) Total Expenses $46,688,000 ($10.7 million to $130 million) $13,091, 000 ($3.2 million to $39.2 million) Net Revenues* ($9,446,000) ($36.7 million to $41.9 million) ($9,789,000) ($25.3 million to $1.9 million) * Amounts do not add up evenly due to use of median values. Source: NCAA Division I ... Purchase answer to see full attachment