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<p>Well, let’s look at some schools at different levels. Williams (D3), Harvard (D1 in most sports, but with no athletic scholarships per Ivy League rules) and Michigan (D1) all have programs that many in the athletic world would regard as exemplary at their respective levels–all at the higher end of expenditures at their respective levels, too, though not necessarily the highest. </p>
<p>Williams fields 32 varsity teams (16 men’s, 16 women’s) in which 796 individual athletes participate (442 men, 354 women, representing 38.2% of the student body), at a total cost of $4.8 million. As a D3 school, Williams spends $0 on athletic scholarships. It spends $1.67 million, or about 1/3 of its athletic budget, on coaches’ salaries. It reports football revenue of just $316,003, so I assume that means the rest–$4.5 million or so–is mostly subsidy, either built into student tuition and fees or from other general fund sources. If that’s the case, it means Williams is subsidizing varsity athletics to the tune of about $5,700 per student-athlete, or about $2,250 per undergraduate per year. At Williams, then, intercollegiate athletics is a somewhat expensive undergraduate EC, but one in which a high percentage of undergrads participate.</p>
<p>Harvard fields 35 varsity sports (18 men’s, 17 women’s), in which 1,016 individual athletes (590 men, 426 women) participate, representing 15.3% of Harvard’s undergrads. (Let’s assume for the sake of simplicity they’re all undergrads; a few could be grad students, but probably not enough to worry about). As an Ivy League school, Harvard also spends $0 on athletic scholarships, yet its total athletic budget is $18.9 million, or roughly 4 times the size of Williams’, despite Harvard’s having only 4 more teams and roughly 26% more student-athletes. Why the big difference? Well, Harvard spends $5.7 million on coaches’ salaries, more than triple the amount Williams spends. Harvard spends just under $1 million on recruiting; Williams spends $23,000. Taking Harvard’s claim of $2.26 million in football revenue at face value (seems high to me, and it may include some allocated subsidies), that leaves about $16.6 million to come from other sources (i.e., mainly subsidies), which means at Harvard the subsidy-per-athlete would be about $16,339 (much higher than Williams), and the athletic subsidy-per-undergrad is about $2,500 (in the same ballpark as Williams). So clearly Harvard is investing more in recruiting, in coaching, and lavishing more on its athletes, who represent a smaller but non-trivial percentage of the student body as a whole.</p>
<p>Michigan follows an entirely different model. It has fewer varsity sports (23) and fewer varsity athletes (780, including 399 men and 381 women, or just 2.8% of the undergrad student body). Its total athletic department budget is $122.5 million, which is 6.5 times Harvard’s and 25 times Williams’. Of that, $1.48 million is spent on recruiting (surprisingly, only 1.5 times Harvard’s level) and a very substantial $16.2 million is spent on athletic scholarships ($8.85 million to men, $7.3 million to women). Coaches’ salaries account for $13.5 million–2.4 times what Harvard spends on coaches, but only 11% of the athletic department budget (at Harvard coaches’ salaries are 30% of the budget). Where does all this money come from? Football, mainly; Michigan hauls in $70 million in football revenue and another $9 million from men’s basketball, while football expenses are only $23.5 million and men’s basketball expenses are only $5.1 million, which translates to a $50 million surplus from those two sports combined. Of course, some sizable fraction of the $37 million in expenditures “not allocated by gender/sport” are attributable to football and men’s basketball, but then so are the bulk of the unallocated revenues from things like royalties on Michigan-logo clothing and paraphernalia and conference distributions from broadcast revenue. Bottom line, Michigan’s mammoth athletic program is fully self-supporting, with no subsidies from student tuition and fees, taxpayer funds, or university general fund revenues; in fact, in many years the athletic department pays over a surplus to the university’s general fund, in addition to paying the tuition of all the scholarship athletes. Total expenditures per student-athlete are very high, about $156K per, though that figure is misleading because it includes expenditures on things like advertising and promotions as well as security, parking, concessions, and janitorial services at some very large events, like 110,000-strong football games that more than pay for themselves. Athletic expenditures per undergrad are about $4,500, a little higher than Williams or Harvard but same order of magnitude, and considering that at Michigan that’s coming entirely from self-generated athletic department revenues, there’s no financial harm in it, as far as I see.</p>
<p>All of these seem pretty sustainable to me (at Harvard and Williams because the schools’ endowments and general financial capacity are so large), though obviously very different models. Where it really gets out of whack is in some of the “mid-major” conferences, e.g., the MAC where schools are trying to field competitive BCS-level football programs and competitive NCAA tournament-eligible basketball programs but just don’t have the fan base or the revenue to make it self-sustaining. In many cases, 70 to 80% of their athletic budgets are subsidized, often to the tune of $15 to $20 million/year in subsidies at schools that are pretty resource-poor to begin with. Ouch! That’s where priorities need to be questioned.</p>