Can Sports Save Small Colleges?

If you’ve been paying attention to college sports this summer, you’ve probably heard a lot about the Atlantic Coast Conference’s football TV deal with ESPN, and how it is adding Stanford, the University of California at Berkeley, and Southern Methodist University. Or you may have heard about how the University of Oregon will soon be playing teams like the University of Maryland, since it is joining the Big Ten. Or maybe about the millions — yes millions — of dollars some college athletes are now earning in name, image, and likeness deals.

Behind the chaotic changes lies the promise of transformative amounts of money for colleges.

This is what college sports looks like in the national media: face-painted tailgaters, stands filled with tens of thousands of screaming fans, outrageous scandals, burning couches, and lots and lots of money. This world of high-stakes sports has indeed left its mark on higher education. Over the last few decades, colleges with mammoth athletics programs have leveraged them to compete with the most selective academic institutions in the country and to draw away thousands of students from smaller local colleges. Institutions like Oklahoma State and the University of Cincinnati are posting record enrollments, while their regional neighbors struggle to fill classes.

The world of big-time sports, however, is worlds away from the experience of many college athletes, especially those in the NCAA’s Division III programs. Division III athletes make up 40 percent of all college athletes spread across more than 400 institutions. These member institutions vary dramatically in size, from under 300 students to over 25,000. Eighty percent of colleges in Division III are private. Perhaps most importantly, these colleges do not provide athletic scholarships.

Picture the scene at my institution, the University of Lynchburg, where our baseball team just won the Division III College World Series. The players arrive back on campus with a police escort and ring the victory bell at our bell tower. They receive no scholarships, no financial perks, no special treatment in the classroom, no priority in getting schedules, and no exposure from televised games. What they do receive, however, is a chance to achieve greatness, and the opportunity to make the sport they love a part of their college experience.

“More and more families are focused on transformational, high-impact settings for their students’ college experience,” says Jon Waters, the athletics director at Lynchburg. “We have been able to develop a dynamic and immersive athletic experience that balances national-level success on the field with a quality academic and service-based experience.”

Indeed, as Bill Fahrner, president and owner of Credo, a higher-education consulting group, puts it, “D-III athletics can be a differentiator to attract a wider pool of students and retain them at higher rates. The opportunity to compete with coaches who instill life lessons is a winning combination.” And so, even as D-I programs steal students away from smaller institutions with the promise of giant tailgates, these smaller colleges have found in sports a vital lifeline. Instead of enrolling fans, they are enrolling aspiring D-III athletes.

While the average percentage of athletics participation at Division III institutions is 26 percent, at some small institutions, the percentage is much higher. At Springfield College, in Massachusetts, 34 percent of students are D-III athletes, while Saint Joseph’s College of Maine reports an athletics-participation rate of 51 percent. Without these athletics programs, and the students they attract, these types of institutions would most likely take a steep hit in the brutally competitive enrollment market. Even some very highly ranked small institutions, such as Williams College and Hamilton College, report high rates of athletics participation (35 percent and 30 percent, respectively).

While athletics programs have long been considered in the revenue equation, most of the attention has been on whether larger programs were making money, or at least breaking even. This question has led to some fascinating drama. In 2020, Stanford announced that it was planning to cut 11 of its 36 sports programs for financial reasons. Less than a year later, the university reversed its decision and kept the programs. According to a statements from then-president Marc Tessier-Lavigne, the programs were saved by “vigorous and broad-based philanthropic interest in Stanford Athletics on the part of our alumni.” The Jerry Maguire quote, “Show me the money,” comes to mind.

Small colleges also stand to benefit from right-sizing their mix of sports. In the heart of the pandemic, while other institutions were considering cutting sports programs, Fairleigh Dickinson University, in New Jersey, decided to grow from 19 athletic teams to 21 by adding men’s volleyball and women’s lacrosse. According to ESPN, the university brought in an outside economist with expertise on the college-sports business model to show that sports should be judged not on cost alone, but on their potential to drive tuition revenue. Adding programs can be particularly helpful for institutions with excess capacity in housing and class seats, where there are low incremental costs to adding students. New sports are especially valuable if they are popular but don’t require large investments in new facilities and equipment. They become “amenities” that boost an institution’s appeal.

This amenity benefit is most obvious with international-student recruitment. There are over 21,000 international athletes at institutions in the U.S. Between 2014 and 2019, the percentage of college athletes who were international students rose from 9.8 percent to 12.4 percent. Surprisingly, many of the countries that send the most athletes to U.S. colleges, including many countries in Europe, offer students free or highly subsidized education in their home countries. What their home colleges do not offer, however, is a chance to continue playing the sport they love at a competitive level. So, students come to the U.S. for that opportunity, and their tuition dollars help to shore up financial gaps for many institutions.

Overall athletic participation continues to grow, with the NCAA reporting that 520,000 students participated in championship sports during the 2021-22 season, an increase of nearly 30,000 in just one year, which more than recouped the pandemic dip. Division III saw the largest growth, adding over 17,000 athletes.

The biggest driver of this sports boom is football. College football programs not only have the largest rosters of players, which can create an immediate jump in enrollment, but they tend to attract fans of the sport as well. Many students see fall football games as a classic element of the college experience, and so adding a football program can provide a double boost. In the six seasons from 2015 through 2020, 27 institutions added football programs. At least 12 colleges are planning to start programs between 2023 and 2025, including Calvin University, in Michigan; Eastern University, in Pennsylvania; and New England College, in New Hampshire. Many of these institutions adding football are smaller, and could probably use a quick boost in enrollment and revenue.

Another aspect of athletics-driven growth is roster management. While D-I and D-II programs have roster-size limits at the national level, D-III does not. This allows coaches to recruit more players than they actually need to field their teams. Even if these extra players see limited or no playing time, they are still helping the institution’s enrollment and bottom line. The cost of carrying these additional players on the team is low, making it advantageous to carry large rosters.

Waters, the Lynchburg athletics director, is a believer in the benefits of sports expansion. “As an institution, we have taken a very intentional approach over the past five years to maximize our roster sizes for existing sports,” he told me, mentioning that Lynchburg has added five intercollegiate sports since 2019. This expansion has brought results on the field. The women’s swimming team won the 2021 conference championship, the equestrian team won back-to-back single-discipline national championships in 2022 and 2023, and the women’s golf program has finished second in the conference championship three years running. Quality athletics have helped draw students from a larger geographic footprint — the number of out-of-state students has increased by roughly 25 percent over the last two years.

Is creating new athletics programs and expanding enrollment and the number of athletes on campus a magic bullet for small colleges? Probably not. There are a limited number of viable new sports to add, especially if colleges only consider those that do not come with a high price tag for new facilities. Coaches can also expand roster sizes only so much before their programs become unmanageable, or until their players become disgruntled at the lack of playing time and transfer or drop out. The other factor to consider is campus culture. When institutions become dominated by athletes, nonathletes can begin to feel like second-class citizens, which can hurt retention. There is a limit to how far colleges can ride the horse.

At the same time, an enrollment-focused athletics strategy can be a big help to institutions on the margins, and can be particularly helpful in down markets. This could be critical as higher ed faces the much-dreaded “demographic cliff.” This rapid shrinking of the student-enrollment market is driven by both a 20-percent drop in birth rates between 2007 and 2020, and a predicted 9-percent drop in demand for higher education as the economy and student perceptions about college change. As colleges revamp their student-success programs, sports can help. Athletes tend to stay enrolled at higher rates than nonathletes — they have stronger reasons to stay at the institution. Sports teams can create a stronger sense of belonging, and coaches often serve as mentors and an additional level of support. Increasing revenue through retention can be just as important as raising revenue through adding new students.

As Fahrner, of Credo, describes it, “In addition to a positive impact on enrollment and retention, institutions with a healthy and vibrant D-III program also experience improved community relations, alumni engagement, visibility, and fund raising. Over all, institutional self-esteem is elevated with an energy that is palpable.”

Taking all of these factors into account, expanding athletics programs on small campuses is a net good. It assists institutions with enrollment and revenue while also enriching the experience for most students.

The trick, though, is not to become dependent on continuously expanding athletics programs for institutional health. You only have one opportunity to add a football team to your campus. If that becomes a Band-Aid that prevents your campus from creating a viable long-term revenue strategy, disappointment is likely to follow. Instead, expanding athletics should be seen as an initial step in building a more comprehensive plan.

The enrollment challenge for colleges is real, and comes with major consequences. Forty-four public or nonprofit institutions have either closed or merged since March 2020, and more closures are surely coming. Vulnerable institutions will need to pull every lever they have to maintain their financial health, and growth in athletics is one of them.