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Don't Call Them Non-Revenue Sports: The case for an accounting revolution to protect cash-flow-positive "non-revenue" sports

"… all models are wrong; the practical question is how wrong do they have to be to not be useful.” (George Box) Athletic departments at schools with under-enrollment have been caught in a bad-model trap, where the NCAA's accounting conventions lead them to make harmful economic decisions in the false belief they are cutting costs. Andy Schwarz (PCL, OSKR) works through why the accounting gets the economics so wrong, provides detailed examples from schools that have made mistaken cuts in 2020, and outlines a solution to avoid these errors going forward.

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"… all models are wrong; the practical question is how wrong do they have to be to not be useful.” (George Box) Athletic departments at schools with under-enrollment have been caught in a bad-model trap, where the NCAA's accounting conventions lead them to make harmful economic decisions in the false belief they are cutting costs. Andy Schwarz (PCL, OSKR) works through why the accounting gets the economics so wrong, provides detailed examples from schools that have made mistaken cuts in 2020, and outlines a solution to avoid these errors going forward.