Interesting. University of Idaho charges each student $221 in an athletic fee, which provides $2 million, or 10% of the total athletic revenue. They enroll almost 12,000 students. So I wonder how all the non-athletes would feel about having that fee raised to support a larger athletic department? 35 players on a baseball team is a drop in the bucket for tuition revenue.
The great fallacy of college sports is that there is a cost to schools for tuition. Alabama has 640 athletes in its 22 sports programs. They probably do not give even 2/3 a scholarship but if they do that is roughly 400 or 75 to 100 per class if you factor in redshirting.
The reality is the tuition is zero because it is unlikely that more than 2 or 3 of these kids would find themselves in the same classroom at any time except Intro to Writing with 125 other kids. If the athletes went away the finances of the university would be unchanged from a tuition perspective.
The dorm rooms have value, and so does the food and other support expenses. But at a place like Alabama the $125 MM that the program takes in more than covers that.
I think you are right, but like many businesses, if you have one executive responsible for expenses (the AD) and another executive responsible for revenue (admissions), then colossally bad business decisions can be made. I've seen this many times in my business career. The university president is not doing his/her job.