Chapter 4: Construction in college sports: an arms race?
Some argue that facilities construction should be considered a recruiting expense as different athletics programs woo 17- or 18-year-old high school seniors with the . . . snazziest arena.
As with the rest of higher education, which has engaged in an “amenities race” for new laboratory facilities, student unions, residence halls, and other projects, a construction boom has echoed throughout intercollegiate athletics as programs have upgraded existing and created new facilities. Many football stadiums have been refurbished, adding capacity, luxury suites and other premium amenities at a cost often exceeding $100 million. Basketball arenas have been built or renovated, as state-of-the-art practice, strength training, and tutoring facilities have proliferated.
Most such facilities are financed through private fundraising and selling bonds. The annual expenses of repaying these bonds have become a significant proportion of many athletics departments’ budgets. For instance, Ohio State had a reported $197 million facilities debt burden in 2007, with an annual debt service payment of $17 million. With a sold-out 105,000-seat football stadium, Ohio State officials imposed a ticket surcharge on their fans to pay down facilities debt. Overall, Street & Smith’s Sports Business Journal reported that spending on intercollegiate athletic facilities reached $15.2 billion between 1995 and 2005 (King, 2005).
In 2005, the NCAA’s Presidential Task Force on the Future of Intercollegiate Athletics reported that nearly 20 percent of current spending on average is tied to facility expansion and capital debt. The task force warned that “higher education has monetized the anticipated growth potential of athletics for near-term benefits while mortgaging the long-term financial security of the university, if there is a downturn in the fortunes of college sports.”
Recruiting costs remain a relatively small item in most budgets, accounting for only two percent of total departmental costs, according to the latest NCAA Revenue and Expenditures Report (Fulks, 2008). However, some argue that facilities construction should be considered a recruiting expense as different athletics programs woo 17- or 18-year-old high school seniors with the most lavish practice facility, shiniest academic study center or snazziest arena.
The University of Kentucky opened a $30 million basketball practice facility in 2007. Georgia opened a $31 million practice and weightlifting facility soon after for men’s and women’s basketball and gymnastics. Texas Tech University spent $4 million four years ago for a student-athlete center, and Texas A&M University topped that with a $27 million academic center and a $22 million basketball practice gym.