It seems that everyone pretty much takes it for a given that college athletics programs earn money for their respective universities, but no one really offers any supporting evidence. I have a friend, however, that claims he has done the research and only about 10 colleges ever make money in any year, with only one ever consistently doing well.
I attend Iowa State, where the athletics department claimed they were ‘90% self sufficient.’ It’s a roughly $27 million program, and gets $1.2 million from the university. But they say they make approximately $6 million for the university. So I don’t really understand how they aren’t 100% self sufficient.
I haven’t been able to find a place either on the ISU website or on google that could answer my question. Has anyone ever worked with a university athletics program and could offer some insight?
It’s a hard question to answer because revenue streams and expenses bleed into one another. Let’s take Notre Dame for example. Notre Dame’s football program fills up an 80,000 seat stadium at $50 per ticket six Saturdays each fall, has a contract with NBC to televise its home games, and has each of its road games televised as well, so it generates quite a sum of money. Plus, the bookstore, university parking lots, concession stands and souvenier shops on campus all make a killing on game day too. Notre Dame football is unquestionably a money maker, even after expenses. The question is, is the Notre Dame athletic deparment overall still a money maker after you factor in the costs and revenues from the sports where the costs greatly exceed the revenues? I can’t answer that question.
Now let’s go to the other end of the spectrum, my undergrad alma mater, Kent State, which is lucky to get 10,000 a game at $8 per ticket for its five home football games, and which gets a huge part of its revenue from the visitor’s share of its one game a year against a big time school, which this year is Michigan State. Kent State has successful men’s and women’s basketball team which I think pay for themselves, but the football team is a big money loser and therefor the entire athletic department must be heavily subsidized by student fees.
The $6 million is a completely separate number from the standard income and expenses. It is a “athletics by-product” number, mainly the school’s income from athletes who are not on scholarship. The contention is that they went to IU because of athletics, so they athletics department should get “credit” for their tuition and room and board as income. This is shaky at best.
We discussed this in my econ class a few semesters ago. At Michigan State, the athletics department is completely self sufficient. The men’s basketball and the football teams make enough money to cover all athletic costs.
From what I understand, it’s almost like the athletics department is run like a separate entity. No money given by the university, no money taken by the university.
The numbers I’ve seen correspond with your friend’s figures. About ten schools per year claim to break even or better on sports. That’s out of something like 1,000 NCAA institutions.
I work at the U of Minnesota, one of the biggest schools in the US and sports are a big loser here. They claim that football, men’s basketball and men’s hockey are money makers and everything else loses. Even those claims are suspect though. They tend not to count upkeep on the buildings as part of the Athletic Dept. budget. That’s Facilities Management. Security costs are discounted as well and so on. More dramatically, the costs of constructing stadiums and arenas are kept separate from the Athletic Dept. budget. The New Yorker had a piece about five years ago on how the U of Michigan lost millions on athletics despite drawing over 100,000 fans to each football game. Bottom line - sports are money losers for American Universities.
The University of Michigan makes 39,000,000 from football and 69,000,000 total.
It expenses 10,000,000 to football and 59,000,000 total.
Then they figure 11,000,000 for total student aid(I’m guessing the money ‘lost’ if all Athletic scholarships were spots filled by full tution students). And an additional 800,000 from recruiting.
So it looks like around a 2MIL loss total for athletics for the year till 6/30 2004.
However this year Michigan has scheduled more home games, which add about 4MIL a piece to the coffers and are expected to pull a surplus this year.
So It’s a pretty close line it appears for a Major football school to support all athletics with football, and for a less major football school probably a losing prospect.
On the other Hand, U of M’s newspaper claims they keep making money every year, so maybe it’s accounting sleight of hand.
I can say pretty confidently that my school makes no money from athletics, as all but football is free to attend (to anybody), and most who attend football games get in for free because of alumni status. So, except for businesses advertising on our football programs, the athletic department itself doesn’t bring in any money of its own.
You also have to factor in donations from alumni who donate because of the athletic tradition. Some are specifically earmarked for athletics, but not all, so tt’s a hard factor to quantify.
That SOUNDS so sane and logical, and yet it’s a questionable assumption.
In his book on college football, “The Hundred Yard Lie,” Rick Telander showed that alumni monetary contributions to Notre Dame went way UP during the five years that the hapless Gerry Faust was coaching the football team. In other words, people who care about academics at their alma mater give money regardless of how the football team is doing.
On the other hand, the wealthy alums who give big bucks to the athletic program often have little interest in funding any other area of the college. I mean, here in Texas, Bill Bob Oilman may dress in burnt orange and sit in a skybox for all the Longhorn football games, and may sign big checks to the Texas athletic department, but when the physics department needs money for lab equipment or computers, old Billy Bob couldn’t care less.
On the other hand, when James Michener made huge cash contributions to the University of Texas English departments (contributions that actually helped the student body), I doubt whether he cared that Mack Brown can’t beat the Oklahoma Sooners.
I’m curious as to why you think that everyone “takes that for a given”. Universities and their athletic programs are operated on a nonprofit basis. If an athletic program made too much money for too long, and accumulated too much of a reserve, it would get into trouble with the IRS. (Unless it refunded the balance to the university–but I don’t know of any university that regards its athletic programs as a cash cow for funding academic services. They aren’t supposed to make money.)
Again, see above. Judging from the Department of Education figures (linked in Wolfman’s post), most major college sports programs at least succeed in covering their operating expenses–facilities, equipment, recruiting, and coaches’ salaries.
Beyond that, the major expense for Division I programs is athletic scholarships–money paid by the athletic program to the university. For private universities, and for public universities which recruit heavily out of state, this is an enormous expense. If you factor in that cost, many sports programs will “lose money” in any given year. But it isn’t cash out the door; it’s cash to the university. Of course, if athletic scholarships weren’t filling up those slots, the university could admit other students. But many of them wouldn’t be from out of state, and many would require other forms of financial assistance at cost to the university.
Iowa State appears to be unusual among major state universities in that it can’t even cover its operating expenses and needs a subsidy from the university. No doubt this is because of its perenially crummy football team. (Of course, the football team will probably tell you that they’re perenially crummy because they don’t have any money.) But this situation is not typical.
UK’s athletic department makes enough money that they give money back to the university and can afford to make student admission to everything but basketball and football free.
I sort of wonder which sport is really paying the bills. Football brings in more spectators, but they get a LOT of money for seats at Rupp.
The book College Sports, Inc talks about this. It’s been a while since I read it, but the basic conclusion was that only a few very successful college sports programs break even, and even then, they don’t take into account things like the cost of building stadiums, because that usually comes out of the general fund. That leaves the obvious question of why colleges put up with the likes of Bobby Knight if they’re not even making money - the answer given in the book was that a big-time college sports program drums up applicants who are not necessarily academically inclined, but like the idea of associating themselves with a famous sports school. Why that is considered a good thing, I don’t know.
I agree that many sports alumni only give money to support the team. But there are certainly some who will give money to the school in general. The amount they give might be negligible, or it might not. I’m sure it’s pretty hard to quantify, though.