Universities compete for students by spending a ton of money on non-teaching perks like fitness centers and stadiums. Like it or not, prospective students ARE attracted to schools with new, fancy dorms and climbing walls. Universities HAVE to play this game or they lose enrollment.
As a side point - watch for these sorts of non-academic expenses to rise in k-12 education too, as the voucher/charter/choice movement grows momentum. There are pros and cons to forcing schools to compete for students and it isn’t always pretty.