America Is an Olympic Powerhouse, College Sports Rules Could End It

(Bloomberg) -- America’s dominance in the Olympics is primed to take a hit with a shakeup in how college sports are funded pushing schools to cut programs.

“I do worry about, as a whole, about our Olympic movement, if we don’t figure out a better way to fund Olympic sports,” said Martin Jarmond, the athletic director at the University of California, Los Angeles, said at Bloomberg Power Players New York. “Is there going to be a cliff with Olympic sports?” 

College sports are a crucial feeder system for the US Olympic team. That’s especially the case for sports such as track and field, swimming and wrestling that the US has dominated. UCLA is helping to host the Olympics in 2028, with the Olympic Village housed on its campus. 

But the world of college sports has undergone a significant shift in recent years after athletes won the right in court to make money off their name image and likeness.

So-called NIL sponsorship deals allowed athletes to sign marketing deals with brands. That morphed into groups of alumni and other supporters paying millions directly to players mostly in football and men’s basketball to recruit them and keep them at their schools.

The fallout is already happening. The University of Virginia ended diving, Cal Poly cut swimming and diving and Washington State University reduced its track and field program.

The US government, unlike most other countries, provides no direct support for its Olympic teams. At the 2024 Paris Games three quarters of team USA athletes and almost 85% of medalists were current or former college athletes, according to the Knight Commission on Intercollegiate Athletics.

“The financial realities are changing,” said Jarmond. “We need to really study what other countries do as far as how they fund Olympic sports and take those learnings from other countries and apply it to what we do here in the United States.”

Earlier this year, the NCAA and its major conferences settled a class action lawsuit brought by former athletes who had been denied the opportunity to take advantage of their NIL. 

As part of the deal, colleges are now permitted to directly pay their athletes. That comes to $20.5 million for this school year.

That extra cost of paying athletes is putting a strain on university budgets. The byproduct is that schools may not be able to afford programs that don’t generate much revenue.

“The financial model in college athletics is stressed,” said Nina King, Director of Athletics at Duke University. “If we opened our books to you, you would think it’s a joke. We need to figure out how to build something more sustainable.”

One option potentially open to universities is private equity, with a number of talks being held between schools and investors on how to potentially tap a new source of funding. However, most discussions have broken down, with a deal yet to be struck.

Ross Bjork, athletic director at the Ohio State University, said he’s not sure how private equity would work at a public university. It could work at the conference level because they are either non-for-profits or private companies. 

“Nobody can sit up here in today’s world and say you don’t need the money,” Bjork said. “Everybody needs capital. Everybody needs money. Everybody is trying to churn and burn through this new era of what it looks like to keep investing and support your athletes.” 

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--With assistance from Ira Boudway and Maxwell Adler.

(Corrects speaker spelling. Updated quote.)

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