The Relationship of Athletic Department Expenditures on Academic and Athletic Outcomes

Abstract

Higher education institutions have been critiqued on the ever-increasing costs of intercollegiate athletic departments with little evaluation on how these expenditures impact athletic outcomes and academic outcomes on an institutional level. This quantitative study explored the relationship between estimated academic expenditures and APR, and recruiting expenditures, game and travel expenditures, facility and equipment expenditures, and coaching compensation expenditures and Directors’ Cup total points. The sample for academic expenditures on APR was 176 Division I public institutions from 2011-2017, while the sample for athletic expenditures on Directors’ Cup total points was 211 Division I public institutions from 2010-2017. A Hausman test indicated a random-effects regression analysis was appropriate for academic expenditures on APR and a fixed-effects regression analysis was appropriate for athletic expenditures on Directors’ Cup total points. Three random-effects regression models were conducted to evaluate the relationship between estimated academic expenditures and APR. The random-effects models indicated a significant positive relationship between academic expenditures and APR with no additional predictors, with athletic department control variables, and with athletic and institutional control variables. Recruiting expenditures, game and travel expenditures, facility and equipment expenditures, and coaching compensation expenditures were first evaluated independently with fixed-effects regression on their relationship with Directors’ Cup total points. Recruiting expenditures, game and travel expenditures, facility and equipment expenditures, and coaching compensation expenditures each had a significant positive relationship with Directors’ Cup total points. When all four expenditure variables were combined in a single fixed-effects model, game and travel expenditures was the only significant predictor. Game and travel expenditures was still the only significant positive predictor when adding in athletic control variables. Lastly, with both athletic and institutional controls, game and travel expenditures was the only significant predictor. The study supported previous research that found academic expenditures were positively related to APR scores, but conflicts with research that found academic staff as significant. The estimated academic expenditure metric can be used in future research to measure academic spending by athletic departments. With only game and travel expenditures as significant contributor to Directors’ Cup standings, it was possible that an extended season when performing well athletically was captured in this study rather than increasing expenditures directly contributing to athletic performance. Therefore, increasing expenditures may not directly lead to an increase in athletic performance.