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An Analysis of Athlete-Centric Expenses in Ncaa Power 5 Athletic Departments

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An Analysis of Athlete-Centric Expenses in Ncaa Power 5 Athletic Departments AN ANALYSIS OF ATHLETE-CENTRIC EXPENSES IN NCAA POWER 5 ATHLETIC DEPARTMENTS Clay Pfeifler A thesis submitted to the faculty at the University of North Carolina at Chapel Hill in partial fulfillment of the requirements for the degree of Master of Arts in the Department of Exercise and Sport Science (Sport Administration) in the College of Arts and Sciences Chapel Hill 2018 Approved By: Barbara Osborne Erianne Weight Robert Malekoff © 2018 Clay Pfeifler ALL RIGHTS RESERVED ii ABSTRACT Clay Pfeifler: An Analysis of Student-Athlete Welfare-Related Expenses in NCAA Power 5 Athletic Departments (Under the direction of Barbara Osborne) Today, the NCAA’s pillar of amateurism is under attack and the debate over paying players wields fierce advocates on both sides. Are athletes exploited by a greedy NCAA, or are they the beneficiaries of tremendous opportunity? Absent in the debate is an illustration of actual expenses related to athlete well-being. This study surveyed Power 5 institutions on 2016-17 expenses across eight defined categories related to athlete welfare. Twenty-one institutions indicated that an average of about $29.9 million, or 29.5% of total athletics expenses, go towards those categories. Departments spend an average of $58,840 per athlete across those categories, and this study estimates that a full out-of-state athletic scholarship at is valued at an average of $78,045 annually. With greater detail than done before, this study provides a grounded expense analysis for use in discussion and policy-making related to student-athlete well-being, compensation, and any pay- for-play model within the Power 5. iii ACKNOWLEDGEMENTS I owe a debt of gratitude to the Sport Administration faculty within the Department of Exercise and Sport Science at UNC-Chapel Hill, namely Barbara Osborne, Dr. Erianne Weight, and Dr. Bob Malekoff, for their wise council and inspirational passion for shaping college athletics. To Todd Turner, who inspired much of this study, and Margaret Laws, who assisted in the development of the expense categories and survey, thank you. This study could not have happened without your support. To FSU Women’s Tennis head coach Jennifer Hyde, for giving me the chance to enter into the world of college athletics and learn so much, I can never repay your kindness. Lastly to my parents, Charlie and Allison, thank you for your unconditional love and encouragement to pursue my passions. iv TABLE OF CONTENTS LIST OF FIGURES ...................................................................................................................... vii LIST OF TABLES ....................................................................................................................... viii CHAPTER I - INTRODUCTION .................................................................................................. 1 Purpose of Study ...................................................................................................................... 1 Research Questions.................................................................................................................. 2 Significance of Study............................................................................................................... 2 Definition of Terms ................................................................................................................. 3 Limitations ............................................................................................................................... 4 Assumptions ............................................................................................................................ 6 CHAPTER II – LITERATURE REVIEW ..................................................................................... 7 Evolution of Athletic Scholarships .......................................................................................... 7 Athletic Scholarships Today .................................................................................................. 16 Academic Support ............................................................................................................. 19 Nutrition ............................................................................................................................ 20 Student Assistance Funds ................................................................................................. 21 Other Benefits ................................................................................................................... 22 Current Pay-for-Play Debate ................................................................................................. 23 Legal Cases ....................................................................................................................... 28 Title IX .............................................................................................................................. 32 Additional Consequences of Paid Employment ............................................................... 33 CHAPTER III - METHODOLOGY ............................................................................................. 34 v Subjects .................................................................................................................................. 34 Survey Instrument and Collected Data .................................................................................. 34 Procedural Notes.................................................................................................................... 38 Omissions from the Model .................................................................................................... 39 CHAPTER IV - RESULTS .......................................................................................................... 41 Summary of Welfare Expenses (RQ #1) ............................................................................... 41 Welfare-Related Expenses per Athlete (RQ #2) .................................................................... 46 Relationship between Athlete Count and Various Spending Metrics (RQ #3) ..................... 50 Estimating the Expense-side Value of a Full Scholarship (RQ #4) ...................................... 55 Relationship between Welfare Expenses and Directors’ Cup Finish (RQ #5) ...................... 58 CHAPTER V - DISCUSSION...................................................................................................... 62 Comparison to the NBA G League ........................................................................................ 66 Limitations and Future Research ........................................................................................... 68 vi LIST OF FIGURES Figure 1 – Categorical Welfare-Related Expenses by Institution ................................................. 45 Figure 2 – Categorical Non-Aid Welfare Expenses by Institution ............................................... 46 Figure 3 – Welfare-Related Expenses per Athlete by Institution ................................................. 47 Figure 4 – Non-Aid Welfare-Related Expenses per Athlete by Institution .................................. 48 Figure 5 – Breakdown of Average Per-Athlete Welfare Expenses .............................................. 49 Figure 6a (Same Axis) – Total Welfare-Related Expenses by Total Athletics Expenses ............ 50 Figure 6b (Dual Axis) - Total Welfare-Related Expenses by Total Athletics Expenses .............. 51 Figure 7 – Welfare-Related Expense % by Total Expenses ......................................................... 51 Figure 8 – Welfare-Related Expense Total by Athlete Count ...................................................... 52 Figure 9 – Non-Aid Welfare Expenses by Total Athletics Expenses (Scatter Plot) ..................... 53 Figure 10 - Non-Aid Welfare Expenses by Total Athletics Expenses (Bar Graph) ..................... 53 Figure 11 – Cost Value of Full Scholarship Participation by Institution – In-State ..................... 57 Figure 12 - Cost Value of Full Scholarship Participation by Institution – Out-of--State ............. 57 vii LIST OF TABLES Table 1 – Summary Data by Welfare-Related Expense Category ................................................ 44 Table 2 - Linear Regression Model of Total Welfare Expenses at Power 5 Institutions .............. 55 Table 3 - Linear Regression Model of Non-Aid Welfare Expenses at Power 5 Institutions ........ 55 Table 4 - Approximate Annual Value of a Full Grant-in-Aid in the Power 5 ............................. 56 Table 5 - Linear Regression Analysis effect on Average Directors' Cup finish 2015-17............. 59 Table 6 - Linear Regression Analysis effect on Average Directors' Cup finish 2015-17 - Individual Categories .................................................................................................................... 60 Table 7 - Linear Regression Model of Individual Welfare Categories on Directors' Cup Finish and Estimated Marginal Cost to Improve One Place .................................................................... 61 viii CHAPTER I - INTRODUCTION Although the commercialization of college athletics has recently gained visibility and commentary in the public forum, commercialization is as old as college athletics itself, with the first competition of college athletics, a crew race in 1852 featuring Harvard and Yale, being sponsored by the Boston, Concord, and Montreal Railroad (Smith, 2011;
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