Does College sport remain solvent?

Great Debates
1

I was in a fierce debate last night about whether or not College football actually pays it’s own way. I don’t really care about private schools, they can do whatever they like, but I have a hard time believing the Minnesota Gophers (or any college team for that matter) make enough in revenue to justify the enormous expense of new stadiums, massive amounts of personnel and scholarships thrown at the feet of great athletes but poor students.

The other man contended that the value of your diploma depends not only on the quality of the education, but the prestige of the school, aided by a good football team. Also donors make up a large share of the costs of the stadiums and such just as that University depends on alumni for its new Math department.

I simply remained unconvinced the bottom line for the team is in the black and that they in fact use tuition and taxpayer money for essentially recreational programs.

In the end there was a lot of emotion, a lot of hand waving, a lot of shaky analogies, but very little fact. So I turn to you Dopers for the cold hard facts. Does College sport in general and College football in particular stay solvent?

2

It really depends on which school you are talking about, but the top Division 1 schools definitely make a big profit with their football teams. The University of Texas, for instance, takes in no money from the school and actually generates enough profit to contribute to the academics. Their annual profit is around $50 million.

Further, I don’t necessarily think that the prestige of the school is aided by sports program so much as sports may attract more students to the school which allows them to be more selective which then aids to prestige.

3

It is common knowledge around here that the University of Iowa football program earns enough in revenues to pay the bills for itself and most of the other sports without much if any tax payer assistance. They earn it through ticket sales, merchandising, corporate sponsorships, and generous booster and alumni contributions.

I’ll try to find a cite today. But I would expect that a top tier team (USC, Michigan, Ohio State, LSU, Florida, etc,), which Iowa would love to be, would do even better.

4

The top football programs tend to pay for themselves and more, but… the rest of the money tends not to go into the school. It gets shuffled back into the sports department. Which is good for sports departments but not neccessarily for the rest of the school, because donations tend to get spent in visible athletics.

5

I’ve always thought it is a false distinction to separate sports off as not being a part of the overall university “experience” and see it as in some way a distinct profit center. I got a degree of flack from someone in one of these threads before when I mentioned that one of the reasons I picked my law school over another where I received an offer (an Ivy) was the better sports and in particular football at the school I attended (Vanderbilt).

To me, the football is as much a part of the university as the theater (for non-drama students), the dorms, the dining facilities. This doesn’t mean, of course, it is not often given too great emphasis, but I also don’t have a huge problem with it not being a money generator.

6

Almost every major college football program makes money, and a lot of it. Keep in mind that even a crappy team like the U of Minnesota gets money every time one of their Big Ten colleagues goes to a bowl game. Those revenues are split among the conference. Same with TV revenue during the regular season.

Some of the profits go to academic programs (or the school’s general fund) but most of it goes to fund other sports programs that don’t make money, like virtually all women’s sports, and golf and tennis and swimming, etc.

IMO, the ones who really get screwed in the deal are the 90+% of the football players who will never get a chance to play professionally, but still practice five days a week and play on another, plus spend the offseason in the weight room. Some of the most miserable students I knew in college were football players in their Junior or Senior year who were backups. If they could afford to, they would forfeit their scholarships and become full time students, but the peer pressure from family and students kept them on the team.

7
8

Ohio State’s Athletic departmenr donated $9 million to the renovation of the school’s main library. I think they are turning a profit.

Library Donation

9

Two key points contribute substantially to the solvency of college athletics:

  1. Revenue received by colleges is exempt from taxes if it can be shown to futher the “academic mission” of the school. Over the past 30 years, political pressure and a few legal tussles have extended this exemption to cover revenue received from TV broadcast rights, stadium naming rights (Congress actually passed a law naming this as a tax exemption), and shoe/apparel deals. Similarly, the IRS tried to tax revenue received for in-stadium advertising, but colleges followed not-for-profit underwriting rules to have this reclassified as “sponsorship”, which is tax-exempt. Even coaches’ contracts–if peppered with the correct legalese–can be treated under better tax terms than the standard employer-employee contract.

  2. Colleges have tax-emept status for donations, so boosters can write off donations to the school’s athletic program as a charitable deduction. Congress has ruled that this tax break extends even to quid-pro-quo “donations” such as the purchase of season tickets and luxury skyboxes (though only 80% of these can be deducted, and because of details in the accounting the actual percentage can be lower).

Needless to say, these two points–colleges don’t have to pay tax on a lot of their income, and donors can deduct more of this spending against their earned income–gives college athletics a huge financial advantage over, say, progfessional sports.

10

Yeah, because Harvard, MIT, and Sarah Lawrence have such awesome football teams.

11

I have read that although football and basketball are revenue positive that the profits are just buried into other sports which eat it all up.

12

Yeah ok, but is there a much more obvious reason to go to school in Ann Arbor Michigan?

13

I have a feeling that a high percentage of these players never would have gone to college in the first place if it wasn’t for football. They get a degree and become part of the network.

14

This article list the top 10 “most valuable” programs. A very interesting read. We’ve had this same debate in my circle and never come to any conclusions.

If you look at the way they measure the value, most of the schools value comes from something called " how much additional money the county generated when the team played a home game" ( the community). This is, I guess, the gross revenue generated by the town. So the local community loves the football program. No surprise there.

Few of the schools gives more than a token amount ($1-3 mil) to the university except for the athletic programs. And these are the top money makers. I think this can put to rest the idea that football is helping to pay the expenses of the school directly. That said, I’m willing to bet that the football programs help bring the attention that in turn brings in the large donations.

15

You mean besides their excellent academic programs?

16

Seems there should be some better stats than have been provided here yet. The fact that at least 15 teams are profitable says nothing about all or even most pigskin/hoops programs.

Moreover, it may be very difficult to separate sports programs from the rest of the college. If an alum is a huge football fan, and as a result donates $50 million for an academic building, where does that appear on the athletics/college balance sheets?

I think that even if big time college sports programs don’t reap a ton of cash, they are quite valuable to the host institution in terms of PR.

17

Whenever I hear someone (often women’s studies professors) denouncing the amount of resources devoted to athletics, I think of how many sports programs are revenue positive or neutral (some). Then I think of the p/l sheet for the women’s studies dep’t and whistle casually while walking away from the silly debate.

18

I’ve got nothing but anecdotes, but I am inclined to say no, on average it’s probably not solvent. For every University of Texas there’s probably a couple like the University of North Texas. They took the fees for my art classes and used them to buy new equipment for the football team, while I had to spend more money to have supplies to complete my classes. It made me long for a sane college administration like the University of Arlington’s, they had the good sense to discontinue their poorly attended football program.

19

My band kids expressed similar concerns in high school.

I’m going to go out on a limb, Huerta and guess that this might be yet another issue you and I would approach from somewhat different directions! :wink:

20

You might be surprised.

Sure, I got my dig in to the effect that however little the athletic program contributes to the bottom line or to making the school better, the liberal arts faculty are on shaky ground making such arguments.

But I am sure there are many athletics programs where even the men’s football and basketball programs (basically, the only programs that could ever hope to turn a profit) are deep in the red and are being run for the wrong reasons. Some of these wrong reasons include giving rich donors the opportunity to live out jock fantasies (but then I ask myself – if this is what the donor wants, is it really “wrong?”).

Others have to do with athletic directors (or even school Presidents) wanting to make a name for themselves – if your team makes it to even the crappiest bowl game, or wins the 65th seed in the NCAAs even one year, it is reasonable to assume that those involved will have their little moment of glory for having put Bumblefreak State on the map for the first time. I’m especially not interested in supporting that kind of ego-burnishing given that administrators and coaches are notorious for using schools as stepping stones to bigger and better. Many is the rednecky jock coach who has sucked away college funds, and cut corners in the recruiting process, thus jeopardizing the entire program/school and its reputation, all in hopes of ditching his assistant coach position at Podunk A&M for a head coaching position at Pissant U. down the road.

I guess all of this disillusionment comes from the fact that as it becomes more of a competitive business, it gets further from what one typically likes (or I like) about sports – being able to identify with a team as representing, maybe not the average student from the student body, but at least a geographic region, or an identifiable group, and not just the best talent from random parts of Compton, Dallas, Pensacola, that recruiting (or money) can cobble together for a year or two in some random location before they go pro. Heck, with fantasy leagues, I can just randomly buy and sell my way to an all-star team. If I’m a U. Oregon alum, do I really have any basis for pride or satisfaction when my similar all-star team (few of them Oregonians or students in any sense of the word) wins something?

Read Raw Recruits if interested – I had already lost interest in anything UNLV (the ultimate factory) did, but there’s a book that will just make you question why anyone’s bothering calling it “college athletics.”

A final reason I look on claims that sports programs financially enhance the schools is that people become emotional and are easily duped by broad economic generalities about the benefits of sports – cf. the cities who have lost a bundle hosting Olympics, or the much-discredited claims that spending gov’t money to build stadiums/attract pro teams will lead to massive economic benefits (it rarely does, but politicians still fall for this crap because everyone’s an erstwhile wannabe jock, or because everyone loves the idea of having a field pass at a big game).