In conference-room discussions and in hallway conversations at the ACC spring meetings, the new cost-of-attendance stipend — available to Division I scholarship athletes beginning in the fall semester — has been a frequent topic of discussion.
It is little wonder, as the issue has considerable implications for what might be the two principle foundations of college athletics — recruiting and money. Coaches across the ACC and the country have already heard from prospects asking about their schools’ stipend — cash on top of scholarships that covers out-of-pocket costs of attending college, such as transportation and school supplies. As the figures differ school to school, prospects are comparing stipends that can range from $1,400 to $5,600, according to figures reported by the Chronicle of Higher Education.
“I have already been asked questions and have seen some comparisons being done,” Georgia Tech basketball coach Brian Gregory said. “That’s troublesome because that’s not why it was intended to come into play.”
On the financial side, athletic departments that already struggle to break even are cutting costs and seeking additional revenue streams to cover the new expense. Further, the potential impact of lawsuits seeking increased compensation for college athletes stand to transform the landscape of college athletics.
“I think what happens is, you know there’s the probability that there could be some big-time changes in how we do business,” Clemson athletic director Dan Radakovich said. “It’s just making sure that your organization can adapt quickly to whatever types of changes might come forward.”
NCAA and college officials are awaiting the decision of an appeal to a federal judge’s ruling in August 2014 that football and men’s basketball players are due $5,000 annually as compensation for the use of their names, image and likenesses by the NCAA, conferences and schools. The result of the appeal, heard in March, is expected in the next couple of months. A ruling against the NCAA could add almost $500,000 in annual expenses (85 scholarship football players plus 13 for men’s basketball receiving $5,000 annually) to athletic department budgets.
Another lawsuit against the NCAA, filed in March 2014, seeks to remove the cap on scholarships, claiming the NCAA and its member schools act as a cartel by limiting the value of scholarships and illegally restraining competition for recruits.
“If we just keep layering costs on to what we’re doing here today, it’s going to implode at some point,” Tech athletic director Mike Bobinski said last month. “You can’t just keep adding costs thinking revenue’s going to fall from the sky to pay for all this stuff.”
These potential costs go along with those being proposed by schools and conferences themselves, such as allowing schools to pay for parents to accompany prospects on official recruiting visits or families to attend postseason games. No one quibbles with the idea of providing more for athletes, but the implications are troubling to many college officials.
When the “Power 5” conferences met in January for the first time with power to pass NCAA legislation separate from the whole of Division I, Boston College athletic director Brad Bates was the lone dissenting vote against the cost-of-attendance stipend because he believed — correctly, as it turned out — that it would cause problems with recruiting and cost containment.
“This was predictable,” Bates said. “This was not an unintended consequence.”
That Bates and others were calling for cost containment during meetings held at the Amelia Island Ritz-Carlton (lowest room rate: $399) was, at the least, interesting. The ACC is in the fourth year of a 15-year contract with ESPN worth $3.6 billion. The conference’s schools spend millions on coaches and building projects.
“All that (TV revenue) stuff has changed exponentially,” Bobinski said. “I get that. But the costs of doing business has gone up, too. It just has.”
A 2014 NCAA study found that, among FBS schools, only 20 finished in the black in 2013. From 2012-13, median annual generated revenues increased by 3.2 percent, but median total expenses rose by 10.6 percent.
It’s enough to cloud the view of the future of college athletics, even from the Ritz-Carlton.
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