As Most Universities Cut Sports to Balance the Books, Fairleigh Dickinson Added Two – and Made More Money
Why this matters
Popular belief in U.S. college sports during the coronavirus pandemic was that cutting sports would save money, but Fairleigh Dickinson University embraced a new economic model prioritizing enrollment over scholarship spots, and brought in more revenue thanks to two brand-new sports programs.
As the COVID-19 pandemic moved from its first academic semester into its second – and the realization set in that it would go on for a good, long while – many college athletic departments across the U.S. found themselves making the same decision. Their schools had suffered steep and unexpected financial losses: room and board fees that had to be refunded, freshman classes that were alarmingly undersized, virus-mitigating health and safety measures that didn’t come cheap. There was a mounting pressure to cut costs, and schools responded by eliminating varsity sports teams – 352 of them, to be exact, during the first nine months of the pandemic alone.
In almost every case, these were unpopular choices. But they also were viewed as decisions that made economic sense. In a time of fiscal uncertainty, ditching purportedly money-losing sports such as tennis and track and field was an unfortunate but perfectly reasonable way for athletic departments and schools to tighten their belts.
Or was it?
While these cuts played out, Fairleigh Dickinson University, a small private institution in New Jersey that accepted 88.9 percent of applicants in 2020, didn’t downsize its varsity offerings. Instead, it started a women’s lacrosse squad – and a men’s volleyball team, too. The school added both sports not only because its leadership believes that having more teams is good for FDU’s brand and student outcomes, but also because it sees those teams as a good financial investment.
In doing so, FDU and other schools like it have rejected the college sports orthodoxy that so-called “non-revenue” sports are fiscal drains, charity cases propped up by the outsized ticket, television, and sponsorship revenues generated by men’s basketball and football. Instead, these schools understand that while many sports look like cost centers on athletic department budgets, they actually produce profits for institutions, generating tuition and other traditional sources of university income as opposed to sports-related ones.
“It definitely helps in the bottom line of the entire university,” says FDU’s athletic director Bradford Hurlbut, who in an opinion piece for the Star-Ledger newspapers explained that the decision to add teams was in part driven by the fact that New Jersey ranks No. 3 nationally in participation for men’s volleyball and No. 2 for women’s lacrosse.
“Especially in smaller schools, we’re looking to attract more students,” Hurlbut says. “And student-athletes are a great way to be able to do that. So to be part of the enrollment management process and to show that value for athletics to the rest of the campus is great.”
Fighting to Fill Desks and Dorms
America’s colleges and universities are facing a customer crunch. According to a recent study by the National Student Clearinghouse Research Center, undergraduate enrollment dropped by more than 3 percent in the fall of 2021 compared to the previous year. That’s almost half a million fewer students attending college. And the pandemic isn’t solely to blame. Since 2019, the total decline is 6.6 percent. Generation Z simply isn’t as big as the Millennial generation, which means that for all but the most popular and selective schools, student recruiting has become an increasingly competitive fight to fill desks and dorms.
Enter college sports – and how supposed non-revenue programs can lessen this crunch.
If an athlete on a non-revenue team takes the place of a regular student who would pay something closer to full tuition than that athlete would, then the difference qualifies as lost money to a university. And that’s true even before you add in the cost of that athlete’s equipment and competition.
In many cases, however, that’s not how things work. For colleges with high acceptance rates – that is, less competition – the national student shortage means that bringing more athletes onto campus fills seats and beds that would otherwise stay empty. And if those athletes don’t have a full scholarship, as the overwhelming majority of college athletes don’t, the amount those athletes pay for tuition, room, and board will likely exceed their scholarship and sports costs by several multiples.
This is especially true in sports where the maximum allowable number of scholarships is a lot smaller than the typical roster size, which creates a high number of athletes paying full tuition or something close to it. Men’s lacrosse, for instance, has a participant-to-scholarship ratio of almost 4 to 1, meaning there is just one full scholarship for every four players on a team, no matter how that money is distributed.
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In the early days of the pandemic – after the NCAA had canceled its cash cow Division I men’s basketball tournament along with the 2020 spring sports season – Inside Lacrosse publisher Terry Foy published an article arguing that schools would be penny and pound foolish to cut their men’s lacrosse teams in order to plug expected budget gaps. Noting that the sport has the second-largest roster among men’s sports but offers fewer scholarships than football, basketball, and hockey, he wrote that “men’s lacrosse has the capacity to drive more tuition dollars than any other men’s niche/Olympic/non-revenue sport.”
“One longtime lacrosse industry executive even recommends lacrosse coaches consider proactively reducing the number of scholarships available to extend that advantage the sport has,” Foy wrote. “Also, anecdotally, philanthropic dollars follow close behind, as does academic relevance in some of the country's markets that are most heavily trafficked by recruiters searching for students.”
‘I Honestly Had No Idea the School Existed’
FDU is applying similar logic. The school’s new women’s lacrosse program will split five scholarships among 32 to 35 players, while the new men’s volleyball team will share 3.5 scholarships – the maximum allowable – among 15 to 18 players. That means at least 38.5 students across the two programs will be paying full tuition and other expenses.
Even when factoring in additional grants and financial aid, FDU figures that its men’s volleyball team will cost $350,000 a year but earn $470,000 in tuition – making for a $120,000 profit. Similarly, women’s lacrosse should net about $100,000 annually. Moreover, both programs are attracting interest from students who otherwise might not have considered going to the school at all. “The number of kids that are applying because of those two sports has certainly helped,” Hurlbut says.
Grady Hoffman, a freshman on FDU’s volleyball team, didn’t think he could play at the Division I level as a freshman. Growing up in California, he had never even heard of the school before learning about its new volleyball program. “I honestly had no idea the school existed,” he says. “I was planning on either staying home and playing [Long Beach] City College volleyball or going to a state school and meet new people, be in a big community, and just have fun.” Instead, Hoffman got in touch with FDU’s coach and made a late commitment in early July to go to the East Coast on a partial volleyball scholarship supplemented by some financial aid.
The lure of playing Division I sports can be powerful. There’s a certain prestige that comes with a roster spot, something that can flip the odds for a smaller, under-enrolled school competing for students with brand-name juggernauts – even when that smaller school is offering a relatively tiny discount on an otherwise expensive education. “That cachet is for a parent, especially, or for a student-athlete to be able to say that they’re a D1 student-athlete,” Hurlbut says. “Whether they’re a walk-on or they’re able to say they’re a scholarship student-athlete, no one’s asking them how much their scholarship is.”
More money isn’t the only way a school can benefit from having more sports teams. Athletes tend to graduate at higher rates, padding their college’s stats on the whole, which in turn improves the school’s national rankings and its pitch to the next group of prospective students and their parents. “All those things help for the mission of a university that’s looking for enrollment initiatives,” Hurlbut says, adding that in the coming years, his school plans to add additional sports.
‘The Athletic Director Doesn’t See the Revenue’
Andy Schwarz, an economist and expert on college sports finances who has consulted with FDU, doesn’t use the term “non-revenue sports.” Instead, he uses “tuition-revenue sports.” It’s an apt moniker, one that acknowledges that most college programs are actually glorified enrollment tools. The overwhelming majority of Division I – let alone Division II or Division III – sports programs don’t make money in the way that you think of sports programs making money: via gargantuan television contracts or merchandise sales. But they make money nonetheless.
The idea that they somehow don’t is sometimes used to justify NCAA amateurism. Allow men’s basketball and football players to be paid, the argument goes, and there won’t be enough money left over for schools to cover the costs of all the supposed money-losing sports – which will then have to be cut.
Schwarz says that this simply isn’t true, especially not for the vast majority of schools fighting to recruit students. “It’s really important to think about opportunity cost here,” he says. “Stanford University [as a whole] is not making money on its tuition-revenue sports. It’s not bringing a body on campus that it wouldn’t otherwise bring onto campus. A person on a 10 percent field hockey scholarship is taking the place of a person who might be paying full price. But a person at Fairleigh Dickinson who is on a 10 percent field hockey scholarship might be replacing an empty bed, so there’s no opportunity cost there.”
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The reason athletic departments don’t always look at things this way, Schwarz says, is that they tend to be siloed away from the rest of their schools, insulated from the larger financial picture: “The athletic director doesn’t see the revenue that these [tuition-revenue athletes] generate, and so these people look like cost centers to them. And, typically, [athletic directors] are managing a [department] budget. So when they cut a sport, it looks like they’re saving the school money. It’s a tale about organizational behavior and bureaucratic management skills.”
Look closely at which athletic departments made cuts during the pandemic, however, and a pattern emerges: The schools situated lower in the sporting hierarchy, which are arguably more likely to profit from the extra tuition that extra athletes provide, were much less likely to eliminate teams. According to Athletic Director U, a net 85 Division I teams were cut during the pandemic’s first seven months. Meanwhile, Division II lost 27 programs, while Division III lost just eight.
When analyzing three mid-sized Division I schools with enrollment challenges for Sportico, Schwarz found that all would benefit financially from adding as many sports as they could. By doubling down on sports with large rosters and few scholarships, Central Michigan University, the University of Akron, and Western Kentucky University could raise as much as $1.3 million extra every year. And they could do it while remaining compliant with Title IX, the 1972 civil rights law that prohibits sex-based discrimination in schools or education programs receiving federal funding.
Like Schwarz, New England College athletic director Dave DeCew doesn’t refer to the programs his department offers as “non-revenue sports.” Instead, he calls the sports teams at his small Division III school “in-person affinity groups.”
At the Division III level, competitive varsity sports are not just an athletic pursuit. They’re a social affair, a serious hobby, an ingrained and beloved part of campus life. “It’s a huge part of their college experience,” DeCew says. “When you talk to our athletes, that’s a huge piece of why they’re here.”
By creating a men’s golf team, New England College is believed to have been the first school to add a team during the pandemic. Certainly, that program was already in the works before COVID-19 broke out, but the school understood that the financial disruption caused by the virus made it an opportune time to double down on sports. In a typical year, 35 percent of incoming freshmen at the school – which accepts 96.3 percent of applicants – are recruited student-athletes. And DeCew is upfront about how that fits the school’s business model. “At the end of the day, there’s bottom lines,” he says. “We’re a business, to a degree. We need to hit numbers, because every person has value.”
If offering sports accomplishes that while simultaneously attracting new students to campus in the manner of other amenities that require up-front investment state-of-the-art dorms, for example, or a new swimming pool – then so much the better for schools like New England College. Sometimes, more is more.
“I’m actually asked all the time about what’s the next sport,” DeCew says.
College Sports 2.0
Last summer, NCAA president Mark Emmert openly acknowledged it was “the right time” to answer the question “if we were going to build college sports again, and in 2020 instead of 1920, what would that look like?”
From education to athlete safety, labor laws to race and gender equity and beyond, this issue offers guidance for what that next iteration of American college sport ought to look like.