Size is always relative. For example, right now Apple could be called the only big business in the technology sector. That’s not to say that Microsoft and Google are small, but when one company has a larger market capitalization that both its main competitors and almost $100 billion in the bank, the rest of the industry has so little weight to throw around they must come up with new ways to compete.
There’s a constant refrain that athletics is and/or should be big business. Except the entirety of college sports is barely as big as the NFL’s TV contracts. More importantly, an athletic department is often attached to a university with a budget that might be so much larger that athletics could be lumped in under “Miscellaneous”. Texas’ $150 million in athletics revenue looks impressive until measured against the university’s $2.2 billion operating budget.
The newest idea to provide up to $2,000 in additional financial aid to student-athletes is another example of how athletic departments still do not have nearly the financial weight that a university does. The new proposal is based on financial need, with student-athletes only being eligible for the grant if their athletic scholarship, other grants and scholarships, and Expected Family Contribution is less than the cost of attendance.
Still missing from the new concept is part of the original proposal which was normally overlooked by the public: an almost total deregulation of non-athletics aid. In equivalency sports, once a student-athlete receives any athletics aid at all and becomes a counter, all financial aid he or she is receiving from the institution is also included when determining how much the student-athlete counts against team financial aid limits, subject to some exceptions.
This is not the first time this idea has come up. In 2009 and 2010, Division I discussed the idea as part of a comprehensive review of the financial aid rules. The cabinet decided not to move forward with the concept, instead going ahead with more limited deregulation of state and federal financial aid.
When you look at the financial muscle of a university, it is easy to see why schools are wary of removing all regulations in this area. Stanford recently completed a $6.2 billion fundraising campaign which created $250 million in new need-based financial aid. That’s three times Stanford’s total athletics budget. If Stanford’s student-athletes received a proportional amount of this new financial aid (they represent 12% of the student population), $30 million in additional financial aid would flow to athletes, almost twice what Stanford spends on athletic scholarships.
It is reasonable to ask why having more money in your athletic department is considered a fair advantage but having a bigger and better financial aid office across campus is a threat to competitive equity. The impact though is not debatable. Look at the success of the Ivy League, which neatly bypasses non-athletics aid limits by not giving athletic scholarships (something to consider in the debate over whether they should start). Ivy student-athletes are free to accept all the financial aid they can get their hands on, and as the Ancient Eight expands aid available to the middle class, results are translating to the fields, courts, rinks, and pools.
If major deregulation of these limits ever happens, coaches would not need to bully financial aid offices for it to be a gamechanger. Financial need and academic merit would become just as important as athletic talent, if not more so. Coaches whose recruiting lines up with the institution’s larger efforts to attract students would be at a tremendous advantage. And if a mega booster gives $20 million to endow scholarships that might help the baseball team, is that so bad if the vast majority of the aid just goes to needy students in general?
None of this will happen though unless institutions realize and accept the true size of an athletic department, especially financially. When classes are cancelled to accommodate the crowd for a home game, it might seem like athletics dominates the university. Expanding athletics aid by $2,000 even just for needy students is a significant addition to an athletics budget. When it comes to finances though, it’s clear who is the tail and who is the dog. What’s not clear is who should be wagging whom.