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- Creators: Department of Economics
- Creators: Belshay, Cade Michael
- Resource Type: Text
The purpose of this paper is to raise awareness about the problem nonrevenue sports face today by analyzing the key factors of the failing Division 1 model and providing some unforeseen consequences in the elimination of nonrevenue sports. The first section will explore the elimination and financial trends of NCAA Division 1 in a historical and contemporary context. The second section will provide the deep-rooted problems associated with collegiate sports. Lastly, the third section will analyze unforeseen consequences for athletic departments that should be accounted for when contemplating the elimination of a nonrevenue program.
Until the Supreme Court’s landmark decision in National Collegiate Athletics Association (NCAA) vs. Alston, student-athletes were not allowed to be compensated for the millions of dollars in revenue they generate for universities. While universities cannot directly pay student-athletes, student-athletes can now make money based off their name, image, and likeness (NIL). NIL legislation has the potential (and has begun to) change college recruiting with the transfer portal and free agency landscape. Now, schools can bake NIL connections into their recruiting pitch, creating a recruiting renaissance. This research is an empirical study to determine the factors that contribute to an athlete’s NIL valuation and earnings. A hierarchical mixed-model analysis run in SAS also is used to analyze the data. The significance of this study includes providing schools and athletes with vital information pertaining to their fiscal valuation during the recruiting process. The findings can help families and student athletes to better estimate expected NIL earnings.
Methods: Information for this study was gathered through qualitative interviews with sports administrators at eleven of the twelve universities in the PAC-12 conference. This primary research was supplemented with secondary research of media sources and
PAC-12 and NCAA documents.
Results: Four key factors are involved in adding a new Division I sports program at any university. These factors are: funding, Title IX status, conference and sport status, and administrative mindset.
Conclusion: The four factors stated above are critical in the addition of any new sports program, though there will be significant variations from sport to sport and from university to university. In the case of men’s wrestling at USC, the group of advocates needs to demonstrate the significant value adding wrestling will bring to the athletic department and school. They should also follow this up with a clear plan of how they will navigate the funding, Title IX requirements and conference status.