Crisis and Asymmetry in the Modern University: Athletics and Institutional Fragmentation at the University of Michigan

Abstract

1. ABSTRACT This paper examines how universities allocate resources across internal units during periods of fiscal crisis. While fiscal constraint is often understood to produce uniform institutional contraction, I argue that retrenchment is instead selective, reflecting internal fragmentation rather than organizational unity. Drawing on theories of institutional fragmentation and competitive dynamics in intercollegiate athletics, I conceptualize college athletics as a semi- autonomous enterprise unit embedded within the university but governed by distinct financial and competitive logics. To evaluate this argument, I conduct a quantitative case study of the University of Michigan from 2015 to 2025, using inflation-adjusted financial data to compare trends in general fund and athletic expenditures before and after the COVID-19 fiscal shock. The analysis combines descriptive trend analysis with regression models testing for structural breaks in spending trajectories. The findings reveal a clear divergence: while the general fund experiences disruption and slower recovery, athletic spending rebounds rapidly and grows at an accelerated rate, increasing its share of total institutional expenditures. These results demonstrate that crisis response is not structured by institutional coherence, but by internal differentiation across units with distinct incentive structures. These findings challenge the conventional framing in public budgeting literature (most visible in cutback management scholarship) that fiscal constraint operates as a disciplining force producing coordinated institutional contraction. Instead, crisis reinforces existing asymmetries, privileging units insulated by distinct revenue streams and competitive logics. These findings suggest that policy approaches to higher education finance must account for internal fragmentation, rather than treating universities as unified actors.