Completing the evolution: Revenue sharing through the Sears Director's Cup as a catalyst to achieve substantial proportionality

Michael Sagas (student), Texas A&M University
Brian J. Wigley (student), Texas A&M University
George B. Cunningham (student), Texas A&M University
Frank B.Ashley (advisor), Texas A&M University

Though women's athletics have evolved immensely over the past 25 years, many feel the process is not complete. For example, as of 1996, only 9% of NCAA member schools were in compliance with Title IX (Porto, 1998). The present study examined, using a case study of the Pacific-10 conference, whether a distribution of funds based on a school's finish in the Sears Director's Cup (SDC) would provide the needed incentive to include women's athletics in the commercial model of sports. Analysis indicated that women's sports are critical in accruing points in the SDC competition and, when compared to men's athletics, are less expensive to administer and uphold. In adding monetary value to women's athletics, it is suggested that this model offers a solution to achieving substantial proportionality.

The word evolution is defined as a gradual process in which something changes into a more complex form (American Heritage Dictionary, 1983). Women's college athletics have gone through such a process over the last quarter century. This evolution of women athletics on the intercollegiate scene began on June 23, 1972, when Congress enacted Title IX of the Education Amendments Act (USC 1681.2.A, 1990).

As the twentieth century comes to a close, the results of the subsequent changes on women's intercollegiate and interscholastic athletics have been dramatic. For example, in 1996, one in three young women played a sport sponsored by her high school (Porto, 1998), whereas in 1972, only one in twenty-seven played a sport sponsored by her high school. Similarly, in 1972 colleges nationwide spent only $100,000 on athletic scholarships for women, whilst in 1996 institutions belonging to the National Collegiate Athletic Association (NCAA) spent over $180,000,000 on athletic scholarships for women (Porto, 1998). Clearly, women have acquired considerably increased opportunity and equality in intercollegiate sports during the last 27 years, yet some feel the evolution of collegiate women's athletics is incomplete. The National Women's Law Center's senior council, Deborah Brake, observed in 1997 that "after twenty-five years, Title IX has made things better than they used to be, but not as good as they should be" (Leonard, 1997, p. C5). In fact, only 9% of the NCAA's 902 schools are actually in compliance with the substantial proportionality standard of Title IX (Porto, 1998).

Why are so many universities failing to comply with a law that has applied to them for almost three decades? The answer is quite simple: overspending. Walter Byers, former chief executive of the NCAA from 1951 to 1987, states "the costs of Title IX and the entry of women into the 'big time' should not be blamed on today's highly publicized financial problems of college sports. At the heart of the problem is an addiction to lavish spending" (Byers, 1995, p. 247). Many universities are pouring large amounts of money into the potentially revenue producing sports of football and men's basketball while failing to keep their budgets in the black. Byers notes:

Most Division I NCAA members run consistent sports deficits, which must be paid off by subsides from state legislatures, booster donations, or fees levied on all their students. But along the way these colleges continue to pay excellent salaries to various university officials, coaches, and athletics department staff. (Byers, 1995, p. 11)

The model currently in place is described as commercialized sport, where resources are used on potentially revenue generating sports. Indeed, market demands for television and ticket revenues necessitate additional spending on these sports. Consequently, the argument that football, due to the large number of participants and high sport specific expenses, is the obstacle preventing substantial proportionality appears to be valid. However, supporters of this model of college sport argue that football and men's basketball raise the revenue that is necessary if schools are to support non-revenue sports. This argument is disputed by data from the work of Richard Sheehan (1996). Sheehan, while studying the economics of big-time college sports concluded that "although football generates substantial revenue, only about 30 schools of the 103 NCAA Division IA football schools make money…and the rest struggle to break even" (Sheehan, 1996, p. 276-277). In fact, 62 of the 103 schools in Sheehan's analysis lost money in 1994. Sheehan added "although collegiate football generates tremendous gross revenues for their schools…along the way those revenues are matched dollar for dollar with costs" (Sheehan, 1996, p.306). The findings of a study by Padilla & Baumer (1994) agree. They reported that for every million-dollar increase in expenses on football and men's basketball at Division I schools, an increase of only $50,000 is given to non-revenue sports (Padilla & Baumer, 1994). Additionally, a study by Mahony and Pastore (1998) indicated that although athletic budgets for both men's and women's athletics rose between 1973 and 1993, the annual growth of women's sports budgets was significantly less than that of men's (Mahony & Pastore, 1998). These findings hardly support the position that commercialized men's basketball and football is supporting the non-revenue sports at most universities.

It has been argued that the universities that generate traditional net revenue can be blamed for creating the overspending enigma in college athletics. Schools like Notre Dame, Penn State, Michigan, and Nebraska continually set high expenditure levels that destroy the balance sheets of most of the schools attempting to compete with these perennial profit makers (Byers, 1995). Indeed, compliance with Title IX continues to lag because small revenue schools try to compete with universities that enjoy large annual profits. In turn, these universities contend that failure to provide equal opportunity for women's athletics is due to economic constraints brought on by the Title IX legislation. Actually, nothing could be further from the truth, with the 'big-time' universities' addiction to high levels of spending lying at the root of the current economic dilemma within college athletics.

The NCAA claims that intercollegiate sport is an educational experience and an avocation for their student-athletes (NCAA, 1997). Despite this claim, this organization is failing to mandate that equal educational opportunity be provided for women. Few, if any, would support a business class that limited female participation to the first 38% that enrolled if the undergraduate population consisted of 50% females, but this is exactly what most schools are doing to their female student-athletes. In fact, many schools have enrollments that are about 50% male and 50% female, but approximately two-thirds of their athletes are men and two-thirds of their budgets are devoted to men (Porto, 1998). Obviously, athletic departments are limiting the educational opportunity of women simply because women's sports fail to create the revenues that some male sports produce.

So what can be done to alleviate this discrepancy? The model called for in this paper, which adds monetary value to women's sports, is a possible solution. By making women's sports 'revenue generating', schools will have no choice but to downsize their football and basketball programmes and shift resources to women's sports. There have been many demands for reform in the past decade, including a call for the NCAA to return to an 'amateur model' and leave the current 'commercialized' model described earlier. The amateur model is much like the NCAA Division III system currently in place, where athletes do not receive compensation for their services and coaches are hired and compensated as educators. NCAA attempts at reforming itself in this period have included the 1993 Knight Commission reform initiatives, which called for more presidential control of intercollegiate athletics (Braziel, 1997). However, despite a decade of continuous calls for reform, very little has been done to decommercialize college sports.

Donna Lopiano, Executive Director of the Women's Sports Foundation, argued "the commercialism in women's sport, as long as it does not compromise the welfare of student-athletes, is not only a good thing but is also essential to develop a viable, quality, marketable women's sport product" (as cited in Branch & Crow, 1994, p. 13). The purpose of this study was to explore if a revenue sharing plan through the Sears Director's Cup could provide the monetary motivations for schools to include women's athletics in the commercialized model of college sports. It was hypothesized that a revenue sharing plan based on a schools finish in the SDC would provide the market forces necessary for institutions to increase the opportunities and funding of women's sports in order to compete for the large dollars available in a NCAA Championship Fund. Additionally, it is argued that the inclusion of women's sports into the commercial model may also aid institutions in complying with Title IX.

The principal policy implication of striving to comply with Title IX forces athletic departments to make difficult decisions in order to expand athletic opportunities for women, while trying to preserve athletic opportunities for men, and trying to keep budgets in the black. Within this context, the Title IX Policy Interpretation of 1979 states that a college must effectively accommodate its students' athletic interests and abilities. To comply with this 'athletic interests and abilities' clause an institution must satisfy one part of the three-part effective test. One of these sections requires that a school meets a substantial proportionality standard between men's and women's sports. This standard requires that the percentages of male and female student-athletes be substantially proportional to the percentages of men and women in the undergraduate student body (Porto, 1998). The Office of Civil Rights recently defined substantial proportionality to mean that the proportion of female athletes should be within 2 percentage points of the proportion of female undergraduates (Hawes, 1999). If complying with the second portion of the test, a college should be able to demonstrate a 'history and continuing practice' of expanding athletic opportunities for women. Failing both of the above tests, a school could still comply if it showed that its existing sports, 'fully and effectively' accommodated the interests and abilities of its current students (Porto, 1998).

The Policy Interpretation three-part effective accommodation test is still the legal standard that determines if a college is complying with Title IX requirements. Indeed, some schools have sought to comply with the substantial proportionality standard by establishing new teams for women and eliminating men's sports. However, few schools, such as Washington State, University of Washington, the Universities of Kansas, Utah, Massachusetts, and Stanford are among the 9% of large budget schools that currently comply with the substantial proportionality standard of Title IX (Porto, 1998). Instead, most colleges seek instead to satisfy either part two or part three of the effective accommodation test where there are no concrete rules to measure compliance.

Title IX also requires schools to comply with other standards as well. The first of these requires that schools award financial assistance based on the number of male and female athletes at the school. The total number of athletic scholarships must be substantially proportionate to the ratio of male and female athletes (Grant, 1999). The second standard requires other benefits and treatments afforded sports participants to be equivalent between genders, but not necessarily identical. The following components are observed for Title IX compliance (Grant, 1999): 1) Equipment and supplies; 2). Scheduling of games and practice time; 3) Travel and per diem allowances; 4) Opportunity to receive academic tutoring; 5) Opportunity to receive coaching: assignment, and compensation; 6) Locker rooms, practice, and competitive facilities; 7) Medical and training facilities and services; 8) Housing and dining facilities and services; 9) Publicity; 10) Support services, and 11) Recruitment of student-athletes.

There is not an easy answer available to college athletic directors when trying to achieve compliance with the law because every available option carries a burden as well as a benefit. The proposed model outlined in this paper gives universities financial incentives to fund women's sports by rewarding universities that are committed to excellence and success in their women's sports. Such a model would theoretically require schools to decrease their overspending on men's 'revenue generating' sports and aid schools to comply with the substantial proportionality test of Title IX.

A brief description of the Sears Directors Cup competition will lend meaning to the reform model hypothesized in this paper. The Sears Director's Cup (SDC) award was implemented in 1993-94 by the National Association of Collegiate Directors of Athletics (NACDA, 1999). The SDC competition is the first ever cross-sectional all- sports national recognition award for both women's and men's sports. The award was implemented to acknowledge institutions that had broad-based programmes and strong women's programmes (NACDA, 1997). Of the sports counted for the Sears Directors' Cup, 10 are men's sports and 10 are women's sports. The winner of the award is presented with a Waterford Crystal trophy at the NACDA Convention every June (NACDA, 1999).

There are a total of 20 sports counted in the standings. Institutions can use their highest scoring sports for 10 women's sports and 10 men's sports. The sports that can count in the standings include: Men-Baseball, Basketball, Cross Country, Football, Golf, Gymnastics, Ice Hockey, Lacrosse, Soccer, Swimming and Diving, Tennis, Track and Field, Volleyball, Water Polo and Wrestling. Women's sports include: Basketball, Cross-Country, Field Hockey, Golf, Gymnastics, Lacrosse, Rowing, Soccer, Softball, Swimming and Diving, Tennis, Track and Field, and Volleyball. Coed sports used include: Fencing, Rifle, and Skiing (NACDA, 1999).

Points are awarded based upon an institution's finish in the sport's NCAA Championships and are based upon the size of the championships bracket. The USA TODAY coaches poll is used when determining point distributions for Division I football teams because the NCAA does not sponsor a football championship. The largest size counted is a 64-team bracket. First place for all sports within all brackets is 100 points (See Table 1 for point breakdowns).

The hypothesised model in this paper employs an economic revenue sharing system that mirrors the existing NCAA Revenue Sharing plan and distributes funds in a manner that is similar to the economic system currently used by the NCAA when distributing its Basketball Fund. The 1997-98 $55 million Basketball Fund, one of six NCAA revenue shared funds, was distributed to conferences based on the conferences performance in the Division I men's basketball championship over a six-year rolling period (for the period 1993-98 for the 1997-98 distribution). A conference receives one unit share for each game an institution in that conference participates in. Conferences with participants in the championship game are awarded five units. In 1996-97, a unit share was worth approximately $67,385 within a total of $50 million distributed (NCAA, 1999). This large pool of NCAA basketball fund money has motivated many schools to participate at the Division I level in men's basketball. The reason so many schools compete in Division I basketball as compared to Division I football is that basketball programmes require less expenses while simultaneously offering the potential to cash in on the large amount of money available in the basketball fund. Sheehan notes that for schools like Robert Morris and Coppin State, an NCAA basketball tournament bid is "like winning the lottery in terms of publicity and revenue…and this lottery ticket is relatively cheap" (Sheehan, 1996, p. 335). The monetary motivations that stimulate schools to overspend on men's basketball will be the same motivations that may stimulate schools to decrease lavish spending and allocate resources to women's sports that are cheaper to compete with than men's sports.

Economic data from the Equity in Athletics Disclosure Report (1996) was utilized for the case study of the Pacific 10 (Pac-10) conference. The variables analysed included each programme's overall budget, men's programme budget, and women's programme budget. The economic data, along with 1997-98 Sears Directors' Cup competition point distribution, was used to generate the variables of overall points, cost per point, and the percentage of points from men's and women's sports. Bivariate correlations were used to explore the relationships between these study variables.

Variables for analysis in the proposed Sears Director's Cup Revenue Sharing Plan were generated using data from the NACDA (1999). The formulation of each of the variables used in the model is explained in great detail below. Descriptive statistics were used to investigate the effectiveness of the revenue sharing plan.

Strong positive correlations were found between women's SDC points and overall SDC points, which illustrates the importance of women's sports in winning points for the Sears Directors' Cup competition. The analysis of the PAC-10 conference indicated that women's points earned was highly correlated (r=. 96, p < .01) to points a school received in the SDC (see Table 2). The analysis also indicated that the amount of points a women's team earned in the SDC is highly correlated to the expenses spent on women's programmes (r=. 82, p < .01, See Table 2).

It is important to note that Stanford, UCLA, and Arizona, which finished first, second, and seventh respectively in the Cup standings, received over 50% of their points from their women's teams (Table 3). Table 3 indicates that the average cost per point for women's teams in the Pac-10 conference in 1996 was only $15,033, compared with the average cost per point for men's teams of $51,642.

The economic data provided indicate two premises about women's athletics in the SDC competition. Firstly, that women's sports do play an important part in winning points in the SDC, and secondly, that the higher a women's team budget, the greater the odds of winning SDC points. These premises provide the monetary market forces necessary for the model outlined below.

The SDCRSP would distribute funds from a newly created NCAA Championship Fund, and would combine monies from all of the NCAA championships and call for a NCAA championship for Division IA football teams. The 1998-99 NCAA budget indicated that the NCAA Basketball Fund distributed $55 million to Division I schools in 1997-98. The budget also calls for the distribution of close to $8 million in monies from other Division I championships. The SDCRSP is based on the assumption that a football championship could generate funds similar to the basketball championship mentioned above. Thus, for the economic analysis described in this paper a conservative figure of $110 million dollars is assumed to be available in the Championship Fund. Indeed, a football championship has been proposed for many years and has the support of many coaches and administrators (Branch & Crow, 1994).

The SDCRSP would award monies to individual institutions, not to the conferences, based on their finish in the SDC. Although the conference revenue sharing system insures that athletes do not get economic pressures to perform well, many schools in the SDCRSP would be reaping the benefits of competing in a conference with good broad-based programmes. Schools would thus need to take responsibility for their own programmes with a unit share given for each 10-point increment earned by an institution over a 5-year rolling period.

The SDC awarded 19,533 ten-point increments (195,337 points) for the 1993-98 competition. To determine the value of a unit share, the total number of ten point increments awarded over the five-year period would be divided into the total amount of monies available from the NCAA championship fund. The unit value for the 1997-98 model would be $5,631.28. Institutions would receive $5,631.28 for each 10-point increment achieved over the 1993-98 SDC. For example, Stanford, having won the SDC every year except 1993-94, received 4,814 points over the 5-year period. The 4,814 points would convert to 481.4 unit shares. Stanford would have received $2,710,898 in 1998 if the SDCRSP were in place (481.4 x $5,631 per share). Table 4 illustrates the monies that would be earned by the Pacific 10 conference if the SDCRSP were in place during the 1997-98 season.

Revenue sharing through the SDCRSP was found to provide monetary motivations that could potentially aid schools to decrease the lavish spending on the current revenue generating sports, which has lead to the need for reform. It can be argued that since women's teams have the potential to earn SDC points at less of a cost than men's teams, athletic administrators would immediately pour additional funds into these sports if the proposed revenue sharing plan was in place.

If this system were in place, institutions would continue to receive funding through the other NCAA funds as they currently do. However, in order to get a piece of the NCAA Championship Fund, institutions would need to be competitive in non-revenue and women's sports. The proposed plan would assist athletic administrators in complying with Title IX by providing market forces that demand an institution shift resources in order to be competitive in the Sears Director's Cup. Institutions would thus, theoretically continue to add women's sports opportunities that are less taxing on the overall budget than men's sports, while decreasing existing men's football and men's basketball spending because they would potentially be less profitable than a women's sport that had a chance to win in the Sears Cup. Under the Sears Director's Cup scoring structure, the top ten scoring sports for each gender are counted towards the competition. Therefore, it is anticipated that athletic directors would continue to add women's sports opportunities that are less expensive than are men's sports, in order to increase the school's odds of earning big points in the SDC competition.

The proposed model differs greatly from other calls for reform in that many previous reform proposals would require the NCAA to radically amend the existing commercialized model (Branch & Crow, 1994; Braziel, 1997; Byers, 1995; Porto, 1998). Although a true amateur or participation model of college sports is an ideal reform concept, the fact remains that the NCAA and powerful universities have too much at stake to decommercialise college sports. Thus, such calls have gone predominately unanswered by the NCAA. Alternatively, the model in the present study calls for the commercialism of women's sport in order to join the male commercialised model of sport. The SDCRSP would therefore, expand the commercial model of sport, use market forces to control the spending enigma, and make women's athletics a viable economic product at NCAA institutions.

Under the proposed model of reform, schools would continue to keep funds earned throughout their football and basketball programmes and conference tournaments. However, schools that wish to compete for the millions available in tournament monies would need to reduce overspending on football and men's basketball, and reallocate funds to women's and non-revenue sports. This shift in resources would complete the evolution of women's athletics into the 'big-time' and aid institutions in complying with the substantial proportionality standard of Title IX.

Table 1 

Sears Director's Cup Point Determinations

Bracket Size	64	48	32	16	12	8	4	2
Place
1st	100	100	100	100	100	100	100	100
2nd	80	80	80	80	80	75	50	50
3-4	60	60	60	60	60	50	10
5-8	40	40	30	20	20	10
9-16	30	30	20	10	10
17-32	20	20	10
33-64	10	10

  

Table 2

Simple Correlation's for PAC-10 Conference Sears Directors' Cup Points

Earned and Expenses

 

	OVERALL EXPENSES	WOMEN' EXPENSES	MEN'S EXPENSES	WOMEN'SPOINTS	MEN'S POINTS	OVERALL POINTS
OVERALL  EXPENSES	1.00
WOMEN'S  EXPENSES	-0.07	1.00
MEN'S  EXPENSES	.40	.48	1.00
WOMEN'S  POINTS	.21	.82	.69	1.00
MEN'S  POINTS	.19	.57	.77	.87	1.00
OVERALL  POINTS	.24	.71	.79	.96	.96	1.00

 Note: Budget figures from Equity in Athletics Disclosure Report (1996)

 

Table 3

PAC-10 Expenses, Cost per Point, and Percentages from Men's and Women's Sports

INSTIUTION	POINTS	MEN'S POINTS	WMN POINTS	COST PER POINT MEN	COST PER POINT WMN	PERCENT POINTS FROM MEN		PERCENT POINTS FROM WMN.
STANFORD	1053	451	602	$22,215	$8,626	43%	57%
UCLA	856	394.5	461	$33,299	$9,373	46%	54%
ARIZONA	667.5	276.5	391	$35,072	$8,617	41%	59%
USC	598.5	331.5	267	$24,827	$7,072	55%	45%
ARIZONA ST	561.5	270.5	291	$24,823	$12,074	48%	52%
WASHINGTON	445.5	130.5	315	$52,779	$12,042	29%	71%
CALIFORNIA	444.5	250.5	194	$33,791	$16,227	56%	44%
OREGON	318	156.5	161.5	$61,532	$15,957	49%	51%
OREGON ST	189.5	83.5	106	$71,508	$26,832	44%	56%
WASHINGTON ST.	105.5	27.5	78	$156,570	$33,508	26%	74%
AVERAGE	523.95			$51,642	$15,033	44%	56%

 

Note: Men and women's points in this table are raw scores earned by teams. The actual points earned by a team may be different because the top 10 scoring points for each gender were used in the final standings.

 

Table 4

Moneys Earned in SDCRSP for Pac-10 Institutions for 1997-98 year 

	5 YEAR UNIT SHARE TOTAL	SDCRSP 1999 1997-98 SDCRSP DISTRIBUTION	MONEY'S EARNED BY WOMEN	MONEY'S EARNED BY MEN
STANFORD	481.4	$2,710,898	$1,518,102	$1,192,796
UCLA	383.4	$2,159,033	$1,165,877	$933,156
ARIZONA	323.8	$1,823,690	$1,075,977	$747,713
USC	301.5	$1,695,680	$932,624	$763,056
ARIZONA ST.	272.7	$1,535,650	$798,538	$737,112
CALIFORNIA	238	$1,340,526	$589,831	$750,694
WASHINGTON	222.85	$1,254,931	$891,001	$363,930
OREGON	139.8	$787,253	$401,499	$385,753
OREGON ST	93.25	$525,116	$294,064	$231,051
WASHINGTON ST	60.4	$340,129	$251,695	$88,433

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