I might be missing your point, but if I am, it's not by a mile. I accept that you think schools will no longer shell out the dough needed to run an athletics program with scholarship athletes. But who is really shelling out the dough? The cost of attending UCONN has increased about 2000% since I graduated and they're still teaching the engineering students from the same books as when I was there. How much of that is due to having to keep up with the Jones'?
What if we blow up the system? How about we create a system for football and basketball like they have in Europe for professional soccer? Double the number of NFL and NBA teams to perhaps 50-60. Get teams in places like OKC, Austin, San Antonio, Portland, San Jose, Columbus, etc. Then, have the NFL and NBA teams scour the planet for 14 year old phenoms, carry the responsibility of educating them, teach them football or basketball, care for them medically. They could have 18U teams, 21U teams, a reserve squad, etc. You'd have a Premier League and a second division with relegation and promotion.
Would the colleges and universities drop all athletic programs for men and women? I doubt it. While my proposal would be a game changer, I feel colleges and universities would continue to offer athletic programs, albeit in a reduced capacity. I need to be convinced that that is a bad thing.