The University of Maryland’s road from the ACC to the Big Ten began one year ago, when a committee appointed by President Wallace Loh recommended reducing the number of athletic teams from 27 to 19. Although Loh’s decision to approve this reduction was cited, by him and others, as a devastating loss, it’s important to understand that 27 teams was a high number for the ACC. At the time, only North Carolina and Boston College maintained more teams, and the median for the ACC was 20.5. Maryland also had the third-highest number of athletes, trailing Virginia and North Carolina.
Eliminating the eight teams wasn’t simply a matter of reducing athletic department expenses. Loh’s committee noted it would also increase the school’s per-student “investment” in the remaining athletes. With 27 teams, Maryland ranked last in the ACC in per capita spending at $72,997, about 56% of the conference leader, Florida State, at $128,700. By dropping down to 18 teams, the committee said, Maryland would go from 13th to 5th in the ACC with $107,850 in per-student spending, a nearly 48% increase.
Like all government-run educational institutions, Maryland athletics is not about making a profit–since there are no owners–but rather maximizing consumption. This is why raising the per-student spending ratio was so important to Maryland’s administration. It’s no different than a public school district measuring itself by per-student spending. It’s a useless metric in terms of measuring educational outcomes, but it’s an easy proxy for bureaucrats to measure the relative consumption of resources.
The key idea is that spending should never decrease. Maryland is joining the Big Ten to gain access to more resources. It’s erroneous to suggest, however, that additional Big Ten funds “solves” Maryland’s budget deficit. The deficit itself is a fictional construct. Maryland is a large bureaucracy with funding from multiple sources. Although the athletic department is not “self-sustaining,” Maryland could cover any shortfall from one of its other funding sources. Indeed, the annual shortfalls observed by the Loh committee were covered by transfers from a reserve fund under the control of the athletics department’s foundation. Political considerations discouraged the transfer of funds from other sources.
But ultimately, there’s no revenue problem at Maryland, but a spending problem. The school could have easily cut additional teams and athletes and run a “barebones” ACC program. For comparison’s sake, Wake Forest, the ACC’s smallest member, spends about $41.3 million on 410 athletes on 18 teams. Maryland’s existing revenues could have easily covered a similar budget. Again, for political reasons, the school didn’t want to go that route. Hence the decision to seek out a cash infusion from the Big Ten.
There’s no reason to believe Maryland won’t simply resume overspending in its new conference. If anything, spending is likely to get more out of control as the Terps “spend to compete” in a more prominent football conference. There’s already political pressure to reconstitute the eight teams eliminated after last year’s report–all programs that spend money without bringing in any significant revenue. Major college athletics is ultimately a quantity-over-quality endeavor.
This is yet another example of the sports business cycle in action. Maryland went through a period of malinvestment, which necessitated a liquidation, but now thanks to “easy credit” from the Big Ten, it can go right back to malinvestment. This new cycle should last long enough to ensure Loh and the present group of administrators avoid blame for when the next downturn occurs, which may not be for another decade.