Inflation, Staffing Shortages, Pressure on Wages, Enrollment Dips
Athletics Veritas is a weekly series aimed at helping higher education executives, faculty, and other stakeholders stay tuned in on trending national issues impacting college athletics, especially NCAA Division I. Athletics Veritas is created by senior DI athletic administrators around the nation.
Inflation, Staffing Shortages, Pressure on Wages, Enrollment Dips – How our Economy is Increasingly Weighing on Division I Athletics
Executive Summary
Universities are facing staff shortages and pressure to increase wages for part-time workers, which can affect Athletic Departments’ operational units like food services, facilities, and grounds crews, among others
Some Division I schools have already announced 3% - 4% increases to their cost of attendance benchmark for 2022-23
A 2021 non-profit report indicated that postsecondary enrollment has declined nationally by over 930,000 students the past two years, putting pressure on NCAA schools that are tuition revenue dependent
Division I athletic departments relying on student fees, consequently, may face depleted allocations if undergraduate enrollments are ebbing
The optics on non-athlete students subsidizing scholarship athletes’ costs to attend school are also receiving expanded criticism as non-athlete students take on more debt to the benefit of athletics departments' bottom lines
Athletic departments game-day operations in the past year faced well-chronicled pressures with shortages of part-time workers for major events like home football games.
College sports weren't immune to the pandemic and don't appear to be immune to real-world economic realities that are swelling across all industries. The variety of financially-infused challenges facing college sports— whether directly or indirectly— are mounting as inflation, wage-increase pressures, labor shortages, and increase costs to attending college, collectively, can present a higher hurdle for college athletics to leap over.
Let’s start with tuition revenue which, at some Division I schools, helps generate funding for Athletics through athletic fees or other direct university subsidies. According to the National Student Clearinghouse Research Center, total postsecondary enrollment declined by 2.7% or 476,100 students in fall 2021, for a total two-year decline of 5.1% or 937,500 students since the beginning of the COVID-19 pandemic. Undergraduate enrollment alone fell by 3.1% or 465,300 students over the last year while graduate enrollment is down less than half a percent (-0.4% or 10,800 students).
And for athletic departments that cover their student-athletes’ tuition dollars (versus having the university waive the tuition costs), those costs will inevitably increase for 2022-23. According to a recent NBC News article, after several years when tuition rates nationally been flat or up only slightly, “there’s absolutely going to be an increase in tuition and fees,” said Jim Hundrieser, vice president for consulting and business development at the National Association of College and University Business Officers.
Citing the higher cost of everything from energy to food, plus upward pressure on wages and benefits, several institutions have already announced tuition and fee hikes for next year as high as 4.7 percent, while also raising prices for meal plans and housing— which, at public four-year universities, are already higher than in-state tuition. Many other colleges will set their rates this month.
Some aren’t even waiting until the fall to raise their rates. Virginia Tech, for instance, increased meal plan costs by 9% this semester to help cover a pay raise for dining hall workers.
Some Division I institutions have announced their cost of attendance estimates for next year and the cost of attending college is continuing to escalate. According to the GWHatchet, George Washington University’s estimated overall cost of attendance will surpass $80,000 for most undergraduates for the first time next academic year, officials announced in March.
The first-year cost of attendance will increase by roughly 3.5% next academic year, and the sticker price for continuing students who do not qualify for fixed tuition will increase by 4.5% if they live on campus and 4.6% if they live off campus.
The Boston College Board of Trustees voted earlier this year to raise undergraduate tuition to $62,950 for the 2022–23 academic year, a $2,420 increase from the previous year’s tuition, according to a University release. The total cost of attendance will rise to $80,296 including the price of room and board, fees, and tuition—a 3.68% increase from this year. School officials projected that by the 2026–27 academic year, BC’s full cost for tuition, room, and board will exceed $100,000.
For Division I athletic departments that rely on consistent enrollment figures that produce athletic-fee paying students, that revenue may not be on entirely stable ground— both financially and optically speaking.
According to an NBC News article on athletic fees, Katelyn Waltemyer, a junior at James Madison University in Virginia, was stunned by what she learned during a seemingly simple assignment for the campus newspaper: dissecting the school's tuition bill.
Buried in each student's yearly cost of almost $23,000 was a required fee of $2,340 solely to finance the school's sports teams. The money was not for using the gym, or for funding student clubs and activities. It was only for underwriting the costs of athletic teams— and a student could only find out about it by visiting and searching the school's website.
"For someone who doesn't care a whole lot about athletics, it seems a bit much for me to have to contribute," said Waltemyer. "I have two jobs. I'm a full-time student. And I'm paying for athletes' scholarships? To me, that hurt."
According to that article, four out of 5 of the 230 Division I public universities charge students a fee to finance sports teams, per documents obtained by NBC News under open records requests.
More than half of public Division I schools assessed an annual athletic fee of at least $100, and the price at several exceeded $2,000. The highest confirmed by NBC News was $3,340, charged by the Virginia Military Institute. Next was the Citadel in South Carolina, which charged $2,713.
These student fees covered far more than just athletic scholarships. Expenses for coaches and administrator salaries account for almost twice what is spent for scholarships in Division I sports.
There were 43 public universities that reported not charging fees for their sports programs, including perennial football powerhouses the University of Alabama and the University of Texas in Austin.
Others rely heavily on student fees. At least one school used its fees to keep itself from being kicked out of the top tier of Division I.
Miami University in Oxford, Ohio— which charged students $1,044.87 in athletic fees this school year— has used money from student fees to make up for low ticket sales. It purchased 10,000 of its own football tickets per home game this past season. The tickets were not resold at a discounted rate or donated.
The NCAA requires the universities playing in Division I's top tier, a more competitive collection of 130 schools known as the Football Bowl Subdivision, to maintain an average paid attendance of 15,000 at home games.
"Because Miami does not average 15,000 in actual attendance, Miami uses a portion of the student fee" to buy football tickets, said Claire Wagner, a spokesperson for the school.
Beyond the inflation and staffing shortage headlines, Division I athletic departments endured a unique financial pressure-point thanks to the U.S. Supreme Court when it ruled last June in the Alston case that institutions could award up to $5,980 annually in education-related awards and benefits to student-athletes. For several Division I institutions, especially at the Power 5 level and thus committed to "Keeping up with the Joneses," Alston money appears to be a new budgetary line-item that will become as customary of a cost on athletics budgets as incidental meals, scholarships, and travel costs.
Part-time worker shortages for college athletics events have also been well chronicled in the past year. Such shortages can have a compounding effect on athletics department finances— beyond the real-time challenges of staffing shortages at a home game today, but the residual effect of fans leaving the stadium with a bad fan experience top of mind that could deter spending more money on tickets and concessions and avoiding a return trip to campus.
According to the Iowa Gazette, in an email last fall to University of Iowa Athletics Department employees and Staff Council members, athletics department leaders requested “game day volunteers” willing to work at stadium gates, in sections for disabled spectators and in premium club areas.
“As you may be aware, many institutions across the country are facing staffing shortages on football game days,” according to the email. “We are no different at Iowa. In a typical year, we have over 1,000 staff positions that are filled on a football game day. Today, we are facing a significant deficit in those staffing numbers as we project out for the remainder of the season.”
The NCAA membership continues to wrestle with its own future through the work of the Transformation Committee. But the outside world and America’s beleaguered economy aren’t waiting on the sidelines for college athletics to solve its problems first– the financial and labor conundrums of 2022 are exacerbating them.
Athletics Veritas is presented for information purposes only and should not be considered advice or counsel on NCAA compliance matters. For guidance on NCAA rules and processes, always consult your university’s athletics compliance office, conference office, and/or the NCAA.
