Has The College Death-Spiral Started?

Maybe.

Wouldn't surprise me. 

Though I don' know where Hayward got the idea that football is a money-maker for second-tier and lower programs...it's my understanding that that's not particularly clear. Hm. But, come to think of it, I'd be surprised if, overall, they weren't plausibly beneficial (in the broadest sense) to schools. If they weren't, it'd be pretty hard to explain their near-universality.

Anyway. 

This could be good for universities and students and the country. 

Universities are going to be forced to cut the fat. Those that do it right are more likely to actually survive. And that means cutting bullshit like the massive "diversity" bureaucracy, grievance studies and other genuinely useless majors, and the massive administrative and quasi-administrative apparatus in which universities are drowning. It also includes much of the humanities if they don't get their shit together--which, inter alia, means: depoliticizing themselves. 

I'm fairly sure, for example, that I could take my own school and--knowing exactly nothing about university administration--cut it down by 20% and make a respectable institution out of it. Of course that's the sort of thing people say when they don't understand the problem their shooting their mouths off about...and yet behold, I so shoot. Now, I'll bet there are side constraints I don't know about. But as for carving out a school at which kids could get a good education--I think I could do it. It might not be able to survive without women's studies et al., "kinesiology," and all those classes where they show movies, and the ones in which the students participate in leftist political activism and pretend it's education. But make me king of my university, and the kids who go through it in the few precious years we might have remaining before our glorious flameout would get a by-God education by God.