Until 1978 football was like every other sport in the NCAA. It was organized into three divisions.
Division III for schools not wishing to award athletic aid.
Division II for schools wishing to award aid but at a low cost level and offering few sports.
Division I for schools with broad based athletic programs (read lots of sports) willing to offer a lot of scholies.
The NCAA had a contract with ABC (and later others) for football (it was THE cash cow for the NCAA). Schools were limited in number of national appearances (5 in two years) and every conference was guaranteed at least one regional appearance every two years. Revenue went into two pools. Pool one was to the televised schools per appearance. Pool two was divided among all Division I schools.
In 1978 Division I was divided into I-A and I-AA. To be I-A you had to either offer a broad based program (ie. 12 sports) or meet minimum attendance requirements. The attendance requirement was there to "save" well supported football programs at schools that didn't have 12 sports.
I-AA was actually a nice compromise for the time. There were over 180 schools playing Division I football at the time. There were only 13 bowl games at the time. Unless you were a member of the Big 8 (Orange), Big 10(Rose), Pac-10(Rose), SWC(Cotton), SEC(Sugar), WAC(Fiesta, then in 1978 Holiday), or Southland (Independence) conferences you were not guaranteed access to a bowl. Division I leagues like the SWAC, MEAC, Big Sky, Ivy, Missouri Valley, PCAA (Big West), MAC, Southern, Ohio Valley, and Yankee (A-10) you were very unlikely to send a team to post-season.
I-AA offered a playoff for those schools. Scholarships were capped at 75 compared to 100 (later 95) for I-A. Many of the Division I leagues already had scholarship caps ranging from 0 in Ivy to 85 in the MAC, MoValley, etc.
Many leagues opted to remain I-A (notably MoValley, Southland, Southern, Yankee, Ivy)
The bigger schools chaffed at sharing the pot of gold (ABC-TV) with over 1. At the end of the 1981 season they eliminated the sport sponsorship element, making it purely attendance based. That knocked I-A down to right at 100. A year later the rest of the MAC got it's house in order (with help from a lawsuit to enjoin enforcement against them) and I-A was at 105 members.
The new I-AA schools were made the following promises.
1) They would have access to television through the ABC contract but would only be paid based on appearances instead of sharing the big check and would be guaranteed a minimum number of regional appearances.
2) They would be able to continue to schedule I-A schools.
3) I-AA would be a division for schools wanting to play high scholarship football.
4) They would have access to a playoff.
Promise #1 was broken in 1983 thanks to the United States Supreme Court striking down the NCAA football television contract. The NCAA was out of the TV business and I-AA was guaranteed one tv appearance, that being the title game and then in most years only because televising the game was made a requirement for bidding on the NCAA basketball tournament.
Promise #2 was when a new rule was adopted for 1989. I-A schools could no longer count a win over a I-AA toward bowl eligibility. From 1981 to 1988 two schools had moved to I-A (not counting the MAC schools that yo-yo'd into I-AA for one year). One was Akron, who had their eyes on MAC membership. The other was La.Tech who made their move partly in response to the proposed legislation. Once the rule was adopted two more schools dashed up, Nevada and Arkansas State, two schools that traditionally relied on playing at least one regional I-A school every year and found those games in danger. After that the dash was on.
Promise #3 was broken when Division III tired of having to recruit against Division I schools like Dayton and Georgetown that played Division I in all sports except football and played Division III football. Shortly after Dayton won national title #2 in 1989 the push was on to get them out of Division III. A couple western schools were playing Division II football. At the request of Division III, the NCAA adopted a new rule requiring football be played in the same division as basketball and in turn nearly forty schools were pushed out of Division II and Division III (mostly III) and into I-AA (including UAB who opted to go on to I-A). Nearly one-third of Division I-A was now non-scholarship programs.
While Promise #4 was kept it was dimished a bit while the SWAC and MEAC pulled out of the playoffs to participate in their own game, the Heritage Bowl. The MEAC has since returned to participation in the playoffs.
The sad fact is that the reasons for creating I-AA initially are gone.
-We no longer have 13 bowl games for 180 schools, we have 28 and potentially 31, for 117 soon to be 119 schools.
-There is no shared revenue from a national TV contract. Each league cuts its own deal.
-I-AA is no longer the exclusive preserve of high scholarship football one-third of the schools are strongly limited in the aid they can give and another handful are like Tenn-Martin, Richmond, Prarie View (and until a few years ago Western Ky) that are in high scholie leagues but awarding well under the limit.
-The schools are still impaired in their ability to schedule I-A schools, both because only one game in four years can count toward a bowl and because now the smaller I-A's must schedule five I-A home games and no longer have a spot available to schedule them.
There may yet be a purpose for I-AA, but as a home for high scholarship football it is an abject failure.
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