College Athletics Losing Money
Despite raking in billions of dollars in television, ticket, and licensing revenues, all but 14 of the 106 schools in the NCAA’s top athletic division (FBS, formerly IA) lost money in 2009. The median loss was over $10 million.
Jon Soloman of the Birmingham News summarizes the results:
[A] new NCAA report that shows fewer schools are making a profit on college sports during a down economy and increased spending. The result: Athletics departments rely more than ever on institutional subsidies.
The NCAA reports only 14 athletics departments from the Football Bowl Subdivision (formerly Division I-A) made more money than they spent in 2008-09, down from 25 in each of the previous two years. The average institutional subsidy for athletics in the FBS rose from $8 million in 2007-08 to $10.2 million in 2008-09, the most currently available year of data.
The NCAA study shows that the growth of average revenue generated directly by FBS athletics departments slowed to nearly 6 percent from 2008 to 2009, down from 17 percent growth from 2007 to 2008. Meanwhile, the growth of total athletics expenses ballooned to 11 percent from 2008 to 2009, nearly double from the previous year.
The gap between the “haves” and “have-nots” continues to grow considerably. The highest athletic revenue produced by one school was $138.5 million, yet the average FBS school produced $32.3 million. Similarly, the most money spent by one school was $127.7 million, compared to the average of $45.9 million.
The state of Alabama has at least four FBS programs: Alabama, Auburn, UAB, and Troy. South Alabama is trying to join them. Only Alabama is making money.
Given the ridiculous amounts of money football and basketball generate, how are these people managing to lose money? Basically, they’re spending it faster than they can bring it in:
How are they spending so much? The chart on page 21 of the report, too large and detailed to usefully reproduce here, gives some insights. 34.2% is going to salaries, 17.9% to coaches and 15.6% administrators. Scholarships are 16.1%. Game expenses account for another 20.5%. Facilities management, 15.0%.
In terms of revenues, a whopping 45.8% is generated by football and 13.3% from men’s and women’s basketball, combined. Men’s sports generate a median $22.56 million; women’s sports, $836,000.
The numbers are staggering.