Update on College Athletics Profitability

[atlcomedy]

A follow-up to a discussion this spring about who's winning financially from athletics.


http://sports.espn.go.com/ncf/news/story?id=5490686

COLUMBIA, Mo. -- Count college sports among the sagging economy's latest victims.
A newly released NCAA report shows that just 14 of the 120 Football Bowl Subdivision schools made money from campus athletics in the 2009 fiscal year, down from 25 the year before.
Researchers blame the sagging economy and suggested that next year's numbers could be even worse.
The research was done by accounting professor Dan Fulks of Transylvania University, a Division III school in Lexington, Ky. It shows the median amount paid by the 120 FBS schools to support campus athletics grew in one year from about $8 million to more than $10 million.
The NCAA doesn't release individual schools' revenues and expenses. But Fulks confirmed that Alabama, Florida, Ohio State, Texas and Tennessee are among the select group that made money. So is Missouri, which reported generating $2 million in profits from campus athletics in 2009.
NCAA interim president Jim Isch, who spent 11 years as the association's chief financial officer, called the latest numbers less a reflection of "runaway spending" in college athletics than a reality of the country's larger economic crisis.
He noted that most schools typically plan for future expenses several years in advance, which in this case meant fiscal projections that didn't account for a prolonged recession.
The gap between the haves and the have-nots appears to be growing. The largest reported amount of revenue generated by an athletics program was $138.5 million -- nearly three times the median of $45.9 million. The top-spending program reported $127.6 million in annual expenses, with a similarly sized gap from the median.
"The top end ... still does not have to rely on institutional subsidies," Isch said. "But those that do are falling further behind."
Sixty-eight FBS schools reported turning a profit on football, with a median value of $8.8 million. The 52 FBS schools that lost money on football reported median losses of $2.7 million.
The breakdown for basketball programs at those 120 schools was nearly identical, though the median values for profitable programs ($2.9 million) and money-losing ones ($873,000) were smaller.
The fiscal fortunes of major college athletic programs without football teams were even worse. None of the 97 schools in that category reported making money from athletics, with median losses of more than $2.8 million.
Fulks pointed out that many schools funnel profits from football and men's basketball -- which for the top schools can mean millions in Bowl Championship Series payments and NCAA tournament payments -- into lower-profile sports that can't rely on season ticket plans, TV packages and well-heeled donors.
More teams generally means larger subsidies from the school.
"Football and men's basketball are the only two sports you have any chance of making money," he said. "If you start splitting that up between 30 or 40 sports, you start losing money."
As public universities throughout the country struggle with double-digit tuition increases, employee furloughs, teacher layoffs and enrollment caps, scrutiny of those institutional subsidies for athletics are increasing.
In Iowa, the Board of Regents voted unanimously in March to order school presidents at Iowa, Iowa State and Northern Iowa to come up with plans to scrap -- or dramatically decrease -- such sports subsidies. Campus leaders are expected to report back to the Iowa regents next month.


Copyright 2010 by The Associated Press