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NCAA report shows more college athletic programs losing money

Seth Goddard/FlickrSchools, such as UC Berkeley, often subsidize athletic departments with millions of dollars in funding.

A new report from the National Collegiate Athletics Association shows that Division I athletic programs are spending more money than they earn and are becoming increasingly reliant on their colleges and universities for financial support.

The report comes amid increasing pressure for athletic programs to wean themselves from university subsidies. At the University of California Berkeley, a panel of faculty and alumni blasted the university for its spending on athletics in a report earlier this summer.

California's public flagship campus has injected between $7 million and $14 million per year into intercollegiate athletics to bridge the gap between the program's costs and revenues, the result of a "lack of budgetary controls" within the department and the "competitive spending race" within the national system of intercollegiate athletics, the report's authors said. 

The new NCAA report sheds more light on that national context. Overall, for Division I athletic departments, total expenses for the last fiscal year increased faster than revenues that were generated by the departments, such as ticket sales and alumni contributions. In other words, colleges are subsidizing sports more.

In the Football Bowl Subdivision, formerly known as Division I-A, the number of athletic programs with surpluses for the 2009 fiscal year dropped by nearly half, from 25 in 2007 and 2008 to 14 in 2009. 

That same subdivision saw the median amount of revenue generated by the athletic departments increase by only 5.8 percent, while median total expenses increased by 10.9 percent.

NCAA's leaders are chalking up the numbers in the new report to the effects of a slumping economy.

"While some might be quick to claim that the increases are the result of runaway spending, the more likely scenario is that due to the economy, institutions did not realize anticipated revenue to keep up with fixed costs,” NCAA Interim President Jim Isch said in a story on the organization's website. 

Isch was the association’s chief financial officer for 11 years before stepping in to replace the late Myles Brand last September. 

Here are a few other quick factoids from the report:

  • Football and men's basketball revenues remain stable: In the Football Bowl Subdivision, between 50 and 60 percent of football and men's basketball programs have reported surpluses for each of the last five years.
  • Tickets and gifts make up most of athletic revenues: Together, these two items made up about half of the total revenues that were generated by the athletic departments in the Football Bowl Subdivision.
  • Salary, benefits and athletic scholarships are the largest expenses: These make up nearly half of the total expenses for the Football Bowl Subdivision. The report's author, Transylvania University Accounting Program Director Daniel L. Fulks, attributes these to market forces. "The efforts to control athletic costs are frustrated by a lack of control over the largest two expense lines," he writes.
  • Programs are less self-sufficient: The Football Bowl Subdivision schools saw a substantial drop in self-sufficiency. Revenues generated by the athletic department made up 72 percent of expenses in 2009, compared to 76 percent the year before.
  • Football Championship Subdivision programs fare worse: No athletic programs in this division, formerly known as Division I-AA, reported surpluses in 2009. Only 2 percent of football programs, 6 percent of men's basketball programs, and 2 percent of women's basketball programs reported surpluses.

The NCAA report does not single out individual institutions, but you can get an overview of your institution's athletic revenues and expenses through the U.S. Department of Education's Equity in Athletics Disclosure Act website.

 

Filed under: Higher Ed, Daily Report

Comments

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superceasuri's picture
That's pretty sad, because in my poin of view the athletic programs are essential in colleges and schools. I live in Romania..and here.. the don't spend 1leu (3.7$) on college athletic programs..because they don't care at all. Ceasuri Ceasuri de mana
Jayson FLA's picture
With the amount of revenues that these teams generate there should not be any shortfalls. They give NOTHING to the starving players and obviously squander $Millions on coaches salary and nonsense. I can only imagine how big the TV deals are that they have too. Keep the great posts coming, Jayson Affiliate Marketing Tips

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