‘Those small privates, they’re in a world of hurt’: Making sense of St. Francis’ decision to drop its athletic programs

One day after the miraculous NCAA tournament run of the Northeast Conference’s Fairleigh Dickinson ended, the NEC’s St. Francis (N.Y.) announced it was dropping its athletic programs. Not moving to Division II or III – killing them altogether.

St Francis, which is in Brooklyn, will be the sixth school to leave Division I in the past two decades. Division I has 363 schools this academic year.

In a wide-ranging letter posted online Monday that also named a new acting president, board of trustees chair Denis Salamone cited current higher ed challenges as the reason for dropping athletics. He mentioned “increased operating expenses, flattening revenue streams, and plateauing enrollment due in part to a shrinking pool of high school graduates in the aftermath of the pandemic.” Salamone’s letter said St. Francis is investing in new academic programs and expanding the “population whom the College serves, both locally and internationally.”

The letter also said the current challenges facing higher ed affect “particularly smaller liberal arts colleges in the Northeast.”

“Coming off a week that has served as a rallying cry for the entire Northeast Conference, today is a bittersweet day,” league commissioner Noreen Morris said in a statement Monday.

In September, St. Francis opened a new campus in Brooklyn; the site is close to the previous campus. TheRealDeal.com reported there was a deal for St. Francis to sell its old campus for close to $200 million, but that reportedly fell through.

The school had announced in May 2021 that it was moving and said the athletic department “will continue without interruption and are a part of SFC Forward’s vision.” The school acknowledged at the time that “while the new campus does not include a gym or pool,” it was “developing partnerships with nearby institutions” to share indoor facilities for practices and competitions. It said it planned to continue using off-site fields and outdoor spaces.

Instead, all of St. Francis’ athletic programs will disappear at semester’s end. Final exams for the spring term end May 12.

U.S. Department of Education figures show that St. Francis had 343 athletes last year. They represented just more than 15 percent of the reported full-time, undergraduate student population of 2,263 students. St. Francis reported that women made up 65 percent of its full-time undergraduate student population last year, meaning 21% of St. Francis’ 791 male undergraduate students were athletes.

St. Francis athletic director Irma Garcia hasn’t responded to an email request for an interview, and an athletic department spokesperson referred On3 to Salamone’s statement. The administration also referred to that statement, and acting president Tim Cecere hasn’t responded to an email requesting comment.

“That’s where this stress is coming nationally. It is the small privates,” a longtime college athletics administrator, who has been on St. Francis’ campus “many times” and who spoke on the condition of anonymity, said of the current Division I landscape. “They are struggling and they’re not going to admit it. They’re going to try to roll with it. They’re going to try to prop up that basketball program to make like they’re doing fine.”

‘If it’s a mission-oriented decision, I would applaud it’

St. Francis sponsors 21 athletic programs, and Salamone’s letter said the college will honor all of its current scholarships for student-athletes. But contracts for coaches and athletic department staff members will end at the conclusion of the semester. The school reported spending $1.6 million in total coaching salaries in 2022.

Andy Schwarz is an economist and partner at the firm OSKR in the San Francisco Bay area. In addition to general antitrust work, Schwarz has been a plaintiffs’ economic expert in O’Bannon v. NCAA  and  Alston v. NCAA, and has testified on the antitrust issues of college sports in the U.S. House. He wonders whether St. Francis is at or under capacity for its undergraduate students. If it’s not, its decision could potentially cost the school money if it can’t replace the tuition revenue.

“Bottom line is if St. Francis is like, ‘Look, athletics just doesn’t fit who we are and we don’t want to have it because it distracts us from our real mission’ – if it’s a mission-oriented decision, I would applaud it,” Schwarz told On3. “Like, great, you’re the University of Chicago, you recognized that you just don’t want to be in this game. You don’t want to offer D-I sports. But the way they characterized it is we can’t afford to offer D-I sports, and I strongly suspect that if we got a chance to look at their numbers, we would see some serious economic flaws. The main one would be, assuming that if you offer a 25 percent scholarship … that costs you money when it makes you money.”

Is St. Francis – the college, let alone the athletic department – in such a dire financial position that its leaders believe such a dramatic move is necessary for survival? That’s unclear, as representatives from St. Francis deferred to the statement, which highlights the school’s academic mission but also cites its increasing expenses and declining pool of potential enrollees.

‘We don’t know enough about what St. Francis is facing’

U.S. Department of Education data shows St. Francis reported $9.3 million in total athletic expenses in the 2022 fiscal year. St. Francis is a private institution, which means it’s exempt from public records requests. The Department of Education’s Equity in Athletics Data Analysis website provides limited financial data from athletic departments, including private schools.

St. Francis’ $9.3 million in reported expenses includes $3.4 million in athletically related student aid but “not a dollar of the tuition that those students are paying” to the school, Schwarz said. This accounting practice can lead to athletic department-related expenses being overrepresented and revenues being underrepresented, since many athletes, including those on partial scholarships, still pay to attend college. That money is revenue for the college, even if it’s not listed as revenue for the athletic department.

“We don’t know enough about what St. Francis is facing, but if they’re saying, ‘This is $9 million we don’t want to spend anymore,’ they are almost certainly not spending $9 million,” Schwarz said.

Schwarz said there’s also the potential that St. Francis or its athletic department receives donations related to athletics that it might not receive in the future. That type of information isn’t publicly available for a private school.

Those are some of the questions OSKR seeks to answer when it reviews the finances of athletic departments, such as those at Hartford or UAB. Hartford’s men’s basketball team won the America East Conference’s automatic bid to the 2021 NCAA Tournament, then the administration announced a month later the school would drop down to Division III by September 2025. The Hawks are competing as a D-I independent this academic year.

At the highest level of Division I, Ohio State and Texas each reported $225 million in total athletic department expenses in the 2022 fiscal year. Northern Kentucky and Texas A&M-Corpus Christi earned automatic bids to the 2023 tournament from so-called “one-bid leagues,” but they reported between $15 million and $16.5 million in annual athletics expenses. As with St. Francis, those schools don’t play football. In short, St. Francis is one of the least-resourced Division I athletic departments in one of the nation’s most expensive markets.

“St. Francis could’ve and should’ve done this years ago, but they tried to live that. They tried to make it work,” the longtime athletics administrator said. “The pressure that’s now coming, I wouldn’t say a lot of schools are going to react like St. Francis did for the same set of reasons, but those reasons are surfacing. Yeah, I think there is going to be a canary in a coal mine, when Hartford – they said ‘no more’ at the Division I level. I mean those types of schools … those small privates, they’re in a world of hurt and I mean a world of hurt with where this thing is headed.”

St. Francis recently projected an increase in enrollment

Two years ago, St. Francis said it anticipated “more than 3,500 enrolled students by 2026,” which was a projected increase of roughly 30 percent (or 800 students) from the fall of 2020. This spring, which is roughly the midpoint for the 2026 enrollment projections it announced in 2021, St. Francis cited “plateauing enrollment” in the letter that nixed its athletic department. That’s why Schwarz wants to know if St. Francis is at or under capacity.

If St. Francis athletes, who make up about 15 percent of the student body, aren’t replaced with a similar number of non-athlete students, then its academic costs will be spread over a smaller number of students.

“What are you going to do with your faculty? So are they going to then lay off 15 percent of the faculty?” Schwarz asked, rhetorically. “That sounds like a death spiral to me. Now maybe that’s what they are. Maybe they’re literally like, ‘We’re going bankrupt next year unless we do something crazy, so let’s roll the dice here.’ ”

The Brooklyn Daily Eagle cited a source who said St. Francis owes roughly $100,000 to the bus company it has used to provide transportation for its basketball programs.

The demographics of St. Francis’ student body

Men made up 49.6 percent of St. Francis’ athletes last year and 35 percent of the total undergraduate students. If its athletes aren’t replaced at a one-to-one ratio with new students, women will make up almost 68 percent of the overall undergrads.

Maybe, Schwarz wondered, St. Francis administrators think the school’s path to survival or success is by offering academic programs that better fit its student body rather than sponsoring athletics. “That can be totally true,” he said, “but we don’t know.”

The elimination of athletics could also potentially impact the enrollment decisions of some non-athlete students. This is where the makeup of St. Francis’ student body could matter. OSKR’s study of the incremental benefits and costs of football, bowling and rifle programs at UAB cited findings that “males, African-American students and students who played high school sports were more influenced by athletics outcomes in their choices for higher education than other students.”

“For all we know, they know all this and they did an amazing study,” Schwarz said, considering the potential decision-making process that led to Monday’s announcement. He later added that “my hunch is that (if) they surveyed the campus population, it would’ve leaked a little earlier.”

What percent of St. Francis athletes would have attended another college if they didn’t have the opportunity to play their sport? And if after all of St. Francis’ current athletes graduate or transfer over the next three to four years, will it have more students or fewer students than it would’ve had if it still had athletics? Some institutions add athletic programs – which often offer partial scholarships – to increase enrollment, which provides additional revenue.

“It costs you almost nothing to educate a student – student (number) 5,000 – if you’re educating another 4,999 students,” Schwarz said. “You have to have the same amount of faculty. Literally, if you’re not having to offer new courses to add another hundred students, you can add those hundred students and their tuition money is just free.

“The analogy I always talk about is on a cruise ship. Like, if you live in L.A., like near Long Beach or if you live in Fort Lauderdale, where all the cruise ships leave from and you have a local zip code, they will often offer you these very, very cheap last-minute things, like, ‘Look, we have 10 unbooked state rooms on this booze cruise.’ They’re able to separate the Midwesterner who’s waiting to save up their money for the honeymoon and charge them full price (compared to) a local, who’s like, ‘Yeah, fine. I’ll do a weekend booze cruise, whatever.’ And they charge them almost nothing because it literally will cost them no more money to have the chambermaids make one more bed in the state room. And these guys will drink, so they’ll make money off the drinks and just getting them on the boat is worth it, if – and this is the big if – if they weren’t going to pay for it anyway.”

‘D-III probably would make them money’

Before Hartford’s current transition, Savannah State was the last Division I school to reclassify to a lower division. Savannah State now competes in Division II. The 2018-19 academic year marked the Tigers’ final season as a DI institution.

Since Savannah State’s final year in Division I in 2019, 11 institutions have moved into Division I, including five schools that joined for the 2022-23 academic year. Two of those 11 institutions, Merrimack  and Stonehill, compete in the Northeast Conference.

Before Savannah State’s decision to leave Division I, Centenary had been the most recent school to drop from DI, in 2011. Before that, it was Birmingham-Southern in 2006 and Morris Brown in 2003.

With OSKR, Schwarz presented an analysis and suggested revisions to the Hartford athletics feasibility study.

“They might say … we don’t want to spend a dime on athletics,” Schwarz said of St. Francis. “D-III probably would make them money (if athletes continued to enroll) because D-III, now they’re not giving any scholarships and they’re getting people to pay full price. … This is what I wrote in the Hartford study: ‘Can you get as many athletes if you don’t offer scholarships?’ If you’re getting 300 people when you’re offering them a 50 percent discount on your product, you shouldn’t assume that if you stop giving the discount that you’re going to still get 300 customers.”

It can be difficult to compare institutions – even those in the same conference – when trying to project which current D-I members could someday weigh decisions similar to Savannah State, Hartford or St. Francis.

“Each of those institutions are their own unique fingerprint in governance, location, history,” the administrator said of the DI landscape in general. “It’s just mind-numbingly huge.”

Morris’ statement said the NEC’s national profile was elevated in the past week because of Fairleigh Dickinson’s success and that its council of presidents “remain actively involved in membership expansion discussions.” There’s the potential for additional irony in that Fairleigh Dickinson, whose men’s basketball team stunned Purdue in one of the greatest upsets in the history of college athletics, recently added athletic programs.

‘This is a really interesting case study’

The letter from Salamone said the board of trustees granted St. Francis president Miguel Martinez-Saenz his request for personal leave Sunday, the day before the school’s announcement. Martinez-Saenz has an educational background at FBS institutions: He received his B.A. from Florida State, as well as his M.A. and Ph.D. from USF.

The St. Francis men’s basketball team went 14-16 this season, which marked a winning percentage (.467) not too far below the program’s all-time winning percentage (.486). The Terriers had five winning records this century, with the last coming in 2014-15 (23-12); that was one of just two 20-win seasons since 1955-56.

This season, St. Francis played most of its men’s and women’s basketball home games at the Activities Resource Center (referred to as The ARC) at Division III Pratt Institute, which also is in Brooklyn. The ARC’s capacity is 650. St. Francis played early-season games at the old campus’ Pope Physical Education Center, capacity 1,200.

The Terriers’ men’s basketball team ranked 353^rd in the NCAA’s NET rankings. They are one of a handful of eligible DI programs that never made the NCAA tournament, and they were ranked in the AP poll only during the 1955-56 season.

“With all the infrastructure now, and when I say infrastructure, I’m talking about health and well-being, counselors, academic, sports medicine … all of that is compacting and it is compressing those programs that rely in large part on subsidies,” the longtime athletics administrator said. “That is where this thing is going to crack the shell open. You have it splitting already at the P5 level. Can you imagine the pressure on institutions outside of the P5?”

In January, the NCAA Division I Transformation Committee released its final report. The committee provided recommendations as part of a “new holistic model,” including that all D-I schools provide scholarship protections, medical coverage for athletic-related injuries for at least two years after graduation and degree completion funds within 10 years for any full-scholarship athlete.

In the eighth and last of the frequently asked questions listed on the St. Francis athletic department’s website regarding the announcement, one question asks, “Will the College ever consider reinstating athletics?”

The answer: If the College returns to a stronger financial position, it is possible.

“This is a really interesting case study,” Schwarz said. “I’d love to know the truth.”