North Dakota State University President Joseph A. Chapman has challenged all campus units to define a "next level of excellence" and to submit proposals to reach those goals. This challenge has resulted in a growing array of academic programs, an expanded research portfolio, and increased graduate and undergraduate enrollment. The assumption behind the challenge is that a university that looks more like its national land-grant university peers will better serve the citizens of the region.

In defining its next level of excellence, the NDSU Intercollegiate Athletics program is considering a possible divisional reclassification from NCAA Division II to Division I-AA. In October 2001, North Dakota State University (NDSU) retained Carr Sports Associates, Inc. (CSA) to conduct a feasibility study to evaluate the current status and potential reclassification of its Intercollegiate Athletics Program from NCAA Division II to Division I-AA. Within the context of that charge, the Consultants were asked to provide recommendations to reclassify to I-AA or to remain in Division II.

The process included on campus interviews with various NDSU stakeholders as well as reviewing University, North Central Conference, selected Division II and Division I institutions and NCAA materials. The NDSU Division I Leadership Team, representing various University constituencies, provided additional focus from an Institutional perspective. The Consultants also solicited input from coaches, Athletic Department and University staff.

This Study, Considerations for Division I Athletics at North Dakota State University, was presented to NDSU in January 2002. Members of the Carr Sports Associates, Inc. team returned to the NDSU campus on January 23, 2002 to make a formal presentation of the Study. The Study is presented in the following sections.

1. Introduction
2. Executive Summary
3. Study Assumptions
4. Policy Issues
5. NCAA Legislation Involving Division I-AA Membership
6. NCAA Division I Legislation Pertaining To Conferences
7. Implementation Issues
8. Title IX Compliance
9. Fiscal Issues
10. External Revenue Issues
11. Facilities
12. Personnel
13. Support Systems Analysis
14. Conclusions and Recommendations

Unless otherwise indicated all financial projections for NDSU are shown in FY 2001-2002 dollars including some adjustments for inflation in future years. Composite figures for NCAA II and I-AA members were generally obtained from the most recent documents or surveys available.

B. OBSERVATIONS AND COMMENTS

Using the Study outline as a guide, the following Observations and Comments summarize the most salient internal and external issues influencing NDSU's considerations for reclassifying Athletics from NCAA Division II to I-AA. The Consultants' Conclusions and Recommendations are provided and the end of this Executive Summary.

Policy Issues
When considering reclassification from NCAA Division II to Division I-AA, North Dakota State University must first address the issues of institutional mission, policy, and priority. The complexity of NDSU's decision is increased by the ever-changing dynamics of intercollegiate athletics. An example is that potential changes in Division II membership may create an environment substantially different from the one in which NDSU has taken justifiable pride in its competitive excellence.

NDSU is to be commended for developing an institutional strategic plan, which identifies Mission, Core Values, Vision, and Major Themes that touch every aspect of the University's internal function and its outreach. The Consultants recommend that NDSU's Athletic Program develop a related strategic plan for its direction and operation. The Consultants further recommend that NDSU give primary consideration to the total institution's best interests (not simply those of athletics) regarding NCAA classification.

NCAA Legislation Involving Division I-AA Membership
As a result of legislation that will be enacted in April 2002, a reclassification period of five years will exist for those institutions reclassifying from Division II to Division I. If NDSU submits an intent to apply during the 2002-03 academic year, its first year as an active Division I member would be 2007-08.

Assuming an intent to apply occurred during academic year 2002-03, the institution's first year of reclassification would be 2003-04. During that year, the institution must compete in a minimum number of contests against four-year institutions, utilizing a minimum number of participants. The institution currently would meet those participant and contest requirements. However, during the second year of reclassification (2004-05), the institution must be in compliance with all other Division I legislation. This would include scheduling 100 percent of its contests against Division I institutions in those sports the University utilizes to meet Division I sports sponsorship requirements. This would be a significant challenge for the institution.

The institution currently would not meet any of the three options under the Division I-AA financial aid requirements, in that it does not award a sufficient total amount of aid to student-athletes. Without regard to Title IX compliance and depending upon the sport(s), the institution would need to add at least six additional equivalencies to meet the option that appears to be the easiest for the institution to meet.

NCAA Legislation Pertaining to Conferences
Parallel and equally important to NDSU's considerations for reclassification to I-AA is conference affiliation. One of the most important issues for the institution when deciding the appropriate conference is the championships that the conference sponsors. Typically, if the conference sponsors a championship, the conference champion will receive automatic qualification into the NCAA Tournament. As previously described, the NCAA is considering a proposal increasing the reclassification period to five years. Essentially, it would be five years from the time of the first declaration before the institution becomes an active member of a Division I conference.

Once the institution declares its intent to reclassify from Division II to Division I, it would be eligible for NCAA championships in Division I as an at-large team in five years in all sports. It would be eligible as an automatic qualifier from an existing conference in 7 years in sports other than men's basketball; men's basketball requires 13 years.

The Consultants believe that the above proposed automatic qualification legislation concerning men's basketball is excessive and it is reasonable to expect some reduction in the number of years. NDSU must be prepared to wait 5 years to be eligible for a Division I Championship for all sports other than men's basketball; automatic qualification will require additional years.

Implementation Issues
If NDSU decides to reclassify to Division I-AA, its plan of implementation will address the key issues of NCAA reclassification, selecting the best timeline for reclassification, establishing conference membership, scheduling athletic contests and determining the transition's impact on recruiting student-athletes.

NCAA reclassification to Division I-AA will require a five-year period during which NDSU's teams will not be eligible for NCAA Championships. This will challenge the institution in the key areas of recruiting and retaining quality student-athletes and coaches as well as support from constituents. If NDSU decides to move quickly, the timeline for implementation could begin as soon as 2002-2003.

Scheduling the correct number of athletic contests against Division I opponents is a requirement for Division I-AA membership; conference membership facilitates meeting those standards. The limited number and distribution of Division I institutions in NDSU's geographic region further complicates this matter. For example, neither North Dakota nor South Dakota has any Division I schools and Minnesota has only one; those same states total sixteen schools in Division II.

The Consultants conclude that the most difficult aspect of making the decision to reclassify to Division I-AA is establishing an athletic conference relationship with respected peer institutions located within a reasonable distance of each other. Therefore, NDSU should immediately begin to assess its options for conference membership. Possible options should be in place before making the decision to reclassify to I-AA.

The Consultants further conclude that since the impact of the NCAA period of reclassification is the next most significant issue of a move to Division I-AA, NDSU must gain support now from its staff, student-athletes and constituents for the long-term benefits of the move to Division I-AA.

Title IX Compliance
With respect to Title IX, NDSU already offers the minimum number of sports required for Division I (14). If the move to Division I is realized, indoor and outdoor track will be counted separately, and NDSU will have 16 sports under Division I rules. In 2000-2001, the Consultant found a 12.3% difference between the participation rate of women student-athletes and their enrollment in the student body. The Consultant also found a number of high school sports in North Dakota and Minnesota that are not offered by NDSU. A University survey also showed some interest in women's tennis, which is currently not offered by NDSU. Although NDSU is attempting to closeout its Action Agreement with OCR by using "unmet interests and abilities" under the third test, the Consultants recommend NDSU contemplate using the first test (proportionality).

Division I has specific minimum amounts of athletic financial assistance that must be met and maintained as a criterion for membership. NDSU is currently in compliance with Title IX as it pertains to athletic financial assistance. However, if the institution elected to maximize the number of football scholarships allowed for Division I-AA football, a comparable number of women's scholarships will have to be added.

Most of the remaining 11 Title IX program components were equivalent. Recommendations include adding one assistant coach and renovating two locker rooms in the Bentson Bunker Fieldhouse. The other areas will require substantial increases in budget if the move to Division I is realized, particularly in travel.

Fiscal Issues
The Consultants were asked to review the financial issues pertinent to NDSU's readiness for reclassifying to I-AA. To facilitate this activity, NDSU's current financial position was benchmarked with data from selected peer institutions and conferences. This data coupled with other pertinent information aided the Consultants in developing a set of revenue and expense considerations as well as projected scholarship levels for I-AA. Revenue related data clearly shows that NDSU is no different than most NCAA Division II and I-AA athletic programs in that it relies heavily on institutional funds in the form of student fees or university support. However, its percentage of total revenue from student athletic fees (12%) is less than both the Division II and I-AA averages of 21% and 22%, respectively. While NDSU's FY 2002 total revenue budget ($5,124,388) is approaching the I-AA average, there is still a large disparity between that total and the Big Sky Conference FY 2001 average of $6,212,971.

The NDSU Athletic Budget will need to increase to compare with the average Division I-AA or Big Sky Conference program. NDSU's current budget of $5,124,388 is 6.5% or nearly $356,000 less than the average Division I-AA program and 18.7% or $1.18 million less than the average Big Sky Conference program's total expense budget.

As the pro forma developed for this Study indicates, a decision to reclassify to I-AA would require a sizable increase in scholarship spending. Simply, a strategic plan for additional athletic scholarships over the five-year transition period would be critical to the financial and competitive success of the Bison sports teams.

External Revenue Issues
Additional financial matters related to NDSU's readiness to reclassify to I-AA and not covered in depth in the Section XIII, Support Systems Analysis, include fundraising, marketing and promotions, radio and television and ticket sales.

By Division II and I-AA standards NDSU's Athletic fundraising programs are quite mature. Divided into Annual Giving (Team Makers) and Major Gifts (Development) these two units are projected to contribute 20% of the Athletics total revenue in FY 2002. A continuation of this heavy reliance on external donor support will require some redesign of each fundraising area, regardless of NCAA classification. First, annual giving levels have remained constant since 1992 and should be examined and restructured to maximize revenue and ensure equity. Second, annual donor activities should be expanded regionally and further formalized while taking full advantage of resources offered through the Alumni Association and NDSU's agri-business outreach. Third, noticeably absent during the Consultants' analysis was a formal case statement and "Moves Management" process for Major Gifts activities. The upcoming University capital campaign further necessitates the prioritization and strict presentation of Athletics Major Gifts needs.

Prior to reclassifying to I-AA, Marketing and Promotions as well as the other External Operations units (Development/Advancement, Ticket Operations and Sports Information) develop and implement respective comprehensive business plans. Moreover, these plans should synergistically support the Athletic Department's overall revenue, customer service and public relations goals.

NDSU's broadcast rights agreement provides NDSU Athletics with sizeable revenue and an array of radio, television and other exposure opportunities. This exposure also positively affects the University's ability to attract students, connect with constituents and generally promote NDSU. Regardless of NDSU's NCAA classification, it should strive to continue and enhance its broadcast agreement.

NDSU's average ticket sales (gate receipts) revenue also outpaces the averages for both Division II and I-AA. Even though this bodes well for a move to I-AA, total annual gate receipts fluctuate substantially each year. This difference, especially in single game receipts, is primarily due to the alternating home and away football dates with the University of North Dakota and the inconsistent number of annual home and away football games. Regardless of NCAA classification, Athletics should develop a football "scheduling criteria" that reflects the Department's financial goals.

Facilities
The athletic facilities at a university demonstrate the institution's commitment to excellence. They can also be a reflection of the creativity and resourcefulness of the local community to provide synergistic solutions to common needs. In recent years, NDSU and the city of Fargo have cooperated to build two outstanding facilities: the Fargodome for football and Newman Outdoor Field for baseball.

The Consultants found most of NDSU's Athletic facilities to be in good condition overall, but much improvement and expansion is needed. Primary attention needs to be given to the Bison Sports Arena (BSA). Built in 1970, the BSA has begun to show its age and is physically stressed. It has become over-utilized and space has been carved out of original designated areas to accommodate additional women's sports, required Support Systems and year- around training or practice.

The Consultants recommend that Athletics, in concert with the University Master Plan, expeditiously complete plans for the proposed renovation of Bison Sports Arena. Strong consideration should be given to creating indoor training space for sports like softball, baseball, soccer, golf and track. These two improvements are important regardless of NCAA classification.

Personnel
Using recent benchmark data, it appears that NDSU's current total personnel numbers are comparable to those of the closest I-AA conference, the Big Sky. However, NDSU's Total Athletic Staffing number (48) is misleading since a non-salaried volunteer fills an Administration position and (3) Support Staff positions are funded by an agency outside the Athletic Department. It could be assumed that some or all of these positions would not be provided if Athletics had to fund all four positions.

The number of Bison coaches (25) is a little lower than the Big Sky's mean of 30. This is noteworthy since the average number of sports sponsored within the Conference is 16.4 and is consistent with NDSU's 16 sports when Track, Outdoor Track and Cross Country are counted as separate sports for meeting Division I requirements. While the number of NDSU's coaches and sports are similar to those in the Big Sky, current data shows that NDSU's average salaries for its head and assistant coaches are considerably lower.

To continue at a championship level at either Division II or Division I-AA, a combination of full and part-time positions to adequately staff NDSU's 17 Support Systems along with extra coaches will be needed.

All personnel adjustments should be phased in using a prescribed reclassification timeline and all positions should contribute to the Department's organizational design, mission and strategic priorities.

Support Systems Analysis
In the context of evaluating NDSU's potential to reclassify its Athletic Program from NCAA Division II to I-AA, the Consultants provide an analysis of NDSU's 17 Support Systems along with recommendations for their further development. If NDSU does not currently have the capacity to move to I-AA, they were asked to offer recommendations for the further development of the University's Division II Athletic Program. These Support Systems currently exist within the Department and/or are a requisite for a broad-based Division II and I-AA championship level program.

By industry standards, NDSU's collective Division II Support Systems are quite mature and well prepared for a move to I-AA. However, to consistently sponsor a broad-based championship level Division II athletic program, the Consultants do recommend enhancements for most of the seventeen Systems. Enhancements are more extensive for I-AA, especially in the area of additional personnel.

The completion of the proposed expansion/renovation of the Bison Sports Arena will have a consequential impact on various Support Systems' ability to effectively provide services required for both Division II and I-AA Athletics. Those Systems most reliant on new facilities include Academic Services, CHAMPS/Life Skills, Equipment Operations, Strength & Conditioning and Video Operations.

C. CONCLUSIONS AND RECOMMENDATIONS

The Consultants' Conclusions and Recommendations were developed from studying the issues and costs related to the reclassification of NDSU Athletics from NCAA Division II to I-AA. These actions will strengthen the continued advancement of NDSU Athletics in the context of the institution's mission, priorities and resources.

1. Market Assessment
   A thorough review of the results from comprehensive, structured research on the external market's potential support is essential to allowing NDSU's leadership to make a well-informed decision on the critical question of reclassifying Athletics from Division II to I-AA.
   • Prior to making a decision regarding reclassification to Division I-AA, NDSU must empirically assess the potential of support from campus, community, NDSU alumni and other traditional markets.

2. Financial Support
   Institutions in NCAA Division I-AA as well as Division II struggle to produce sufficient external revenues to fund a broad-based athletic program and they rely heavily on institutional funds. A successful move to I-AA will be achieved only through a collaborative effort of all parts of the University.
   • If the decision is made to reclassify to I-AA, it is imperative that an institutional consensus is reached as to the goals and objectives of the University's Athletic Program and that the program is adequately funded.
   • Athletic Annual Giving (Team Makers) plus Athletic Development, the University Foundation and Alumni Association must further formalize their working relationship. They should assess potential external financial support for Division I-AA Athletics as part of the planned University Capital Campaign.
   • A thorough cost-benefit analysis for all Athletic fundraising programs and activities should be performed prior to a decision to reclassify to I-AA. To maximize revenue-generating opportunities, all Team Makers priority seating assignments and Annual Giving levels should be reviewed and updated to ensure equity.
   • The procedures for identification, cultivation and solicitation of all Athletics Major Gifts should be reviewed for their efficiency and effectiveness.
   • NDSU Student Activity Fees for Athletics are quite low when compared to the average of I-AA programs. Therefore, a reasonable increase in student fees appears to be one method of partially funding a move to I-AA.

3. NCAA Reclassification Period
   The proposed NCAA legislation will establish a five (5) year period for reclassification from Division II to I-AA, during which the institution's teams will not be eligible to participate in NCAA Championships. This limitation will have a significant psychological and operational impact on NDSU, its Athletic Program and constituents.
   • NDSU should focus considerable effort on describing the short-term requirements of the NCAA reclassification period and gaining support from its staff, student-athletes and constituents for the long-term benefits of the move to Division I-AA.

4. Potential Timeline for Implementation
   If NDSU decides to reclassify to I-AA, the University will determine the appropriate timeline. Under NCAA rules soon to be adopted, the most expeditious timeline possible is as follows: if the Institution submits its intent to apply during the 2002-03 academic year, it will begin a five-year reclassification period and the institution's first year as a Division I member would be 2007-08.
   • Regardless of the timeline for reclassification followed by NDSU, the University must begin to prepare for Division I-AA by conducting necessary planning, fund raising, facility design and improvements, Support Systems enhancements, Title IX adjustments and staffing additions.

5. Division I-AA Membership Requirements
   If NDSU's "Intent to Apply" is submitted to the NCAA during academic year 2002-03, the institution's first year of reclassification will be 2003-04. During the second year of reclassification (2004-05), the University must be in compliance with all other Division I legislation, including scheduling 100 percent of its contests against Division I institutions in those sports that are used to meet Division I sports sponsorship requirements. This will require significant changes in philosophy and will present financial and competitive challenges for NDSU.
   • NDSU currently would not meet any of the three options under the proposed Division I-AA financial aid requirements. NDSU would need to add at least six additional scholarships to meet the most favorable option.
   • To comply with I-AA membership requirements, NDSU will need to develop and implement a plan for scheduling and awarding athletic related financial aid.

6. Title IX
   NDSU has been very thorough in assessing its compliance with three basic parts of Title IX: Participation Opportunities (sports sponsored for men and women student-athletes), Athletic Scholarships and Athletic Program Components. However, it is prudent for NDSU to review its current compliance position as well as to determine any changes required by a move to I-AA.
   • Although NDSU is attempting to closeout its Action Agreement with OCR by using "unmet interests and abilities" under the third test, the Consultants recommend NDSU contemplate using the first test (proportionality).
   • Regardless of its decision on reclassification to I-AA, NDSU should implement the Consultants' recommendations in support of its Title IX efforts.

7. Competition and Support Facilities
   NDSU's Athletic Facilities are a silent statement of the University's commitment to excellence and are critical for the continued success of NDSU Athletics at any level of NCAA competition. While many of the facilities used by NDSU are outstanding, Bison Sports Arena, the cornerstone of Athletics' facilities is undersized and outdated.
   • The University should move ahead expeditiously with plans for the renovations of Bison Sports Arena as well as creating indoor training space to accommodate many of the Bison sports teams.

8. Conference Affiliation
   The most difficult hurdle to cross prior to making the decision to reclassify to Division I-AA is that of establishing a mutually beneficial athletic conference relationship with respected regional peer institutions.
   • NDSU should begin immediately to assess its options for conference membership by conducting informal interaction with leaders of selected institutions. Viable options should be in place before making the decision to reclassify to I-AA.

9. Support Systems
   By industry standards, NDSU's collective Division II Support Systems (infrastructure) are quite mature. However, to sponsor a broad-based athletic program competing consistently at the championship level in Division II or I-AA, several of those Systems must be further developed.
   • NDSU should implement the recommendations for Division II contained in Section XIII, Support Systems Analysis, before reclassifying to I-AA.

10. Constituents Advocacy
    If NDSU decides to reclassify to I-AA, the University will need well-informed constituents as advocates for this initiative, assisting in benchmarking NDSU's program with appropriate models, and in fostering relationships with potential future rivals and/or conference member institutions.
    • The President and Director of Athletics should utilize the Division I Leadership Team along with other NDSU and community leaders to become familiar with NDSU's facilities and Support Systems and then tour the campuses of selected I-AA institutions while attending some of their major home athletic events. The perspectives of these leaders should provide NDSU a vital resource to guide the Athletic Program's reclassification.

COMPREHENSIVE RECOMMENDATIONS

North Dakota State University has made great strides in strengthening its programs and in its overall growth. However, with its expanded emphasis on institutional advancement and creative partnerships with its constituents for the future, the University has positioned itself to achieve new levels of excellence and recognition. Therefore, the Consultants conclude that reclassifying Intercollegiate Athletics from Division II to I-AA is consistent with the overall institutional reclassification of the University. The Consultants recommend that the University begin the transition process, but only after it has achieved the following:

• Establish an institutional consensus that the reclassification from NCAA Division II to Division I-AA is consistent with the University's mission, priorities and resources.
• Conduct a formal Market Assessment documenting sufficient interest in new external revenues in Division I-AA which, when combined with potential increases in student fees and other institutional support, will provide adequate funding.
• Implement a strategic plan for the reclassification of NDSU Athletics built on a broad-based, participatory planning process using the above-referenced market study and the key recommendations of this report.
• Secure an acceptable conference membership before making the decision to reclassify to I-AA.

Based on North Dakota State University's mission and vision, Carr Sports Associates, Inc. concludes a reclassification to Division I is warranted. If NDSU determines that remaining in Division II Athletics is in its best interest, they recommend there should be strong public statements affirming the continued support for the Athletic Program from all levels of the University's leadership.

For more information contact Athletic Director Gene Taylor, 231-8985