A recent NCAA report stated that only 14 of the 120 athletic programs in the Football Bowl Subdivision made money. The Football Bowl Subdivision (FBS) includes all BCS conferences (PAC 10, SEC, Big 10, Big 12, etc) so odds are your favorite athletic program is losing money.
12% of college athletic programs are profitable.
Which college athletic sports are profitable?
According to the NCAA study, only two sports were reported by any university as being profitable:
- Men’s Basketball
Let’s take a closer look…
- There is a lot of discussion about football keeping athletic departments alive. Yes, football is one of only two sports (men’s basketball being the other) that ANY university reported as being profitable. At the same time, however, only 57% of football programs reported being profitable. Thus the other 43% of football programs are still part of the problem.
- Men’s Basketball
- As the only other profitable sport that any university reported, men’s basketball is also considered an important aspect of keeping college athletics alive. Once again, however, keep in mind that roughly 57% of men’s basketball programs reported being profitable, so there is a large percentage of men’s basketball programs losing money.
How do college athletic departments MAKE money?
Three items account for over 50% of revenues:
- Ticket Sales (17%)
- Alumni/booster donations (27%)
- NCAA/conference distribution (14%)
How do college athletic departments SPEND money?
Two items account for over 50% of expenses:
- Salaries and benefits (32%)
- Scholarships (Grants In Aid) (25%)
In case you are curious, here are a few other items as a percentage of total expenses:
- Facilities maintenance and rental (13%)
- Team travel (7%)
- Recruiting (2%)
- Equipment/uniforms/supplies (3%)
- Game expenses (4%)
The median expense per student athlete in 2009 was $76,000.
How much does a college athletic program cost each university?
Average assistance that each university gave to the athletic department was $10.2 million.
How do we improve college athletics moving forward?
There isn’t an easy answer although simple math tells us that a start would be to reduce costs and increase revenue. As witnessed by Cal’s initial decision to cut five sports, universities are less willing to keep athletic programs alive so it’s time for college athletic programs to be self sustaining.
While salaries and scholarships aren’t necessarily easy to reduce as they are driven by outside factors (salaries of competing positions, tuition costs, etc), the data indicates its the first place to look in terms of reducing costs. This could come in the form of fewer staff members per department/team, lower salaries for staff members within college athletics, or cutting athletic programs. As someone who has worked in sports business, I recognize sports already has low salaries (particularly lower level positions) but I recognize that in order for college athletics as we know it to continue changes need to be made. In my experience, there are opportunities for college athletics to become more efficient. What if conferences became responsible for marketing individual teams instead of the universities athletic departments? Or media rights were handled at the conference or NCAA level instead of the individual institution? I recognize a large percentage of expenses for salaries are on the field in the form of coaches so perhaps there need to be guidelines for coaching salaries in college athletics? Is it time to re-evaluate the scholarship model? Reduce scholarships? Offer various levels of scholarship based on academic standing, performance on team, etc? . Cutting expenses is always a tough task full of difficult decisions (see Cal), so I welcome any ideas in the comments.
The report doesn’t explicitly state what “NCAA and conference distributions” are but presumably its an athletic programs cut of any revenues generated by the NCAA or conference on their behalf (TV, radio, etc). What are some other ways to increase revenue? There is talk that a football playoff would generate significantly more revenue but is that the answer? What about individual conferences forming their own network (similar to Big 10 network)? Will that generate enough revenue for athletic departments? Can other sports generate significant fan interest? I think the15,896 people who showed up to UC Santa Barbara to watch a college soccer game say yes.
What do you think? I’ve really enjoyed reading the debates regarding college athletics and cutting sports programs so I welcome any ideas, or comments you have. What are some solutions for college athletics? Is there even a problem?
NCAA Study: http://www.ncaapublications.com/productdownloads/REV_EXP_2010.pdf