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Diverging Revenues, Cascading Expenditures, and Ensuing Subsidies: The Unbalanced and Growing Financial Strain of Intercollegiate Athletics on Universities and Their Students

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  • John J. Cheslock
  • David B. Knight

Abstract

We present a three-part conceptual model that illuminates key dynamics promoting financial unsustainability within intercollegiate athletics. Revenue divergence comprises the first part as the influx of commercial athletic revenues primarily benefits a small set of universities housing prominent athletic programs. These schools then increase athletic expenditures, which promotes expenditures cascades as their spending spurs expenditure growth at other athletic programs. Because external revenues do not increase alongside expenditures at these other programs, subsidies ensue as student fees and institutional subsidies are increased to fill growing deficits. These increases, however, will be difficult to sustain in an era of tight academic budgets and rising student debt. We describe each part of the model using a range of organizational theories and use financial data from intercollegiate athletic programs to demonstrate that the patterns predicted by our framework are supported empirically.

Suggested Citation

  • John J. Cheslock & David B. Knight, 2015. "Diverging Revenues, Cascading Expenditures, and Ensuing Subsidies: The Unbalanced and Growing Financial Strain of Intercollegiate Athletics on Universities and Their Students," The Journal of Higher Education, Taylor & Francis Journals, vol. 86(3), pages 417-447, May.
  • Handle: RePEc:taf:uhejxx:v:86:y:2015:i:3:p:417-447
    DOI: 10.1080/00221546.2015.11777370
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    Cited by:

    1. Jennifer A. Delaney & Tyler D. Kearney, 2022. "TV Networks for College Sports: Implications for Institutional Subsidies," Research in Higher Education, Springer;Association for Institutional Research, vol. 63(7), pages 1158-1203, November.
    2. Willis A. Jones, 2020. "A Benford Analysis of National Collegiate Athletic Association Division I Finance Data," Journal of Sports Economics, , vol. 21(3), pages 234-255, April.
    3. Bouchet, Adrien & Laird, Mary Dana & Troilo, Mike & Hutchinson, Michael & Ferris, Gerald, 2017. "Effects of increased commitment on reputation and status: Evidence from NCAA Division I universities," Sport Management Review, Elsevier, vol. 20(4), pages 395-407.
    4. Mark R. Umbricht & Frank Fernandez & Guillermo Ortega, 2023. "The Blind Side of College Athletics: Examining California’s Student Athlete Bill of Rights and Athletic Expenditures," Research in Higher Education, Springer;Association for Institutional Research, vol. 64(1), pages 33-57, February.

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