College Sports Empires

College Search & Selection
1

<p>Fortune magazine had an article, in the October 29, 2007 issue, about U Florida and their rise to prominence in the big time college sports scene - having won national championships in football and basketball in the same year.</p>

<p>The article talks about their athletic department boosters that fund more than a third of the U Florida’s athletic department revenue. “Gator Boosters” include 13,000 members (annual fee is $50 minimum) and include 892 “Bull Gators” (contributing at least $12,000 annually)! That’s quite impressive. </p>

<p>The largest college athletic deparment budgets, by revenue are:</p>

<li>The Ohio State University, $104.7 M, Big 10</li>
<li>University of Texas, $97.8 M, Big 12</li>
<li>University of Virginia, $92.7 M, ACC</li>
<li>University of Michigan, $85.5 M, Big 10</li>
<li>University of Florida, $82.4 M, SEC</li>
<li>University of Georgia, $79.2 M, SEC</li>
<li>University of Wisconsin, $78.9 M, Big 10</li>
<li>University of Notre Dame, $78.2 M, Independent</li>
<li>Texas A&M University, $70.9 M, Big 12</li>
<li>Penn State University, $70.5 M, Big 10</li>
</ol>

<p>The great thing is that these large athletic departments are run as non-profit foundations. Since they’re non-profit, they can accept donations, and donors can write donations off on their taxes. Unfortunately, Congress is looking to change these rules because of complaints that donors are getting something in return, in the form of better seats, perks, etc…and the govt. wants their share.</p>

<p>U Florida’s department has operated in the black and “during the past 17 years”; and “has donated some $40 million to the university, $6 million of that this year alone.” Now, that’s something where “It’s Great to Be A Florida Gator!”</p>

2

<p>Interesting... do you happen to know which of these athletic depts are required to be self-supporting (i.e., no revenue from the state or tuition/endowment $)? </p>

<p>It's the law in Texas, and I assume most other states as well. Changing the donation rules could have interesting effects.</p>

3

<p>^ Good question. The article said: "As is the case at many schools with competitive Division I sports programs, Florida's athletic department is organized as a separate not-for-profit foundation, with its own budget."</p>

<p>I assume the top ones are self-supporting. But, the article mentioned that most athletic departments don't generate enough revenue to cover all expenses...where that shortfall is made up is, I assume, in state subsidies or tuition.</p>

4

<p>I'm surprised the University of Nebraska isn't on this list - we have the highest sell out record in NCAA football and HUGE athletic support here.</p>

5

<p>No doubt Nebraska is huge in NE, but NE is a small state.</p>

<p>Maybe get Warren Buffett to make a huge donation...he can easily afford it, and he's an alum for chrissakes. ;)</p>

<p>I imagine a lot of this revenue comes from selling college sports merchandise in larger markets.</p>

6

<p>Most athletic departments run at a deficit, and the costs are made up by the universities in question. It is the rare athletic department that generates revenues for the university at large. </p>

<p>Note that one-year numbers are often distorted by capital campaigns. The University of Virginia, for instance, has numbers influenced by building its new basketball arena.</p>

7

<p>
[quote=]
I assume the top ones are self-supporting. But, the article mentioned that most athletic departments don't generate enough revenue to cover all expenses...where that shortfall is made up is, I assume, in state subsidies or tuition.

[/quote]
</p>

<p>You touched on one of the biggest ironies with the largest programs... the ones that have the largest budgets are typically the ones that aren't allowed to spend a cent of tuition revenue or state support on athletics. It's actually the smaller schools with less high profile programs that have no other choice but to use institutional funds to fund athletics since, as you said, they don't generate enough revenue to cover expenses. (Although some may argue that even though the larger programs are not directly competing for academic funds they become a distraction due to their huge size and need to keep raising funds on their own.)</p>

8

<p>
[quote]
The University of Virginia, for instance, has numbers influenced by building its new basketball arena.

[/quote]
</p>

<p>Ahhh, that explains it...I thought UVA looked a little out of place.</p>

<p>Thanks, Tarhunt.</p>

9

<p>Warren Buffett and Susie Buffett's Foundation have done a LOT for the state already.</p>

<p>In fact, Omaha (the city I live in) started a program known as Bright Futures, which becomes active in 2009. It comprises several initiatives to curb high school drop-out rates (through after school programs, et al). But the cornerstone of the program is that it guarantees a four-year college education for any student below a certain social-economic level (Not set yet, though I believe it includes more students than most programs do). The initiative, since plans begun two years ago, has already raised over $250 million dollars (much of that donated by Mr. Buffett) and the Gates Foundation has offered to match their total fundraising amount.</p>

10

<p>
[quote=]
Most athletic departments run at a deficit, and the costs are made up by the universities in question. It is the rare athletic department that generates revenues for the university at large.

[/quote]
</p>

<p>Serious question - which do you think is less ideal? Having to use academic funds to fund athletic programs, or being self-supporting, but having to keep up massive revenue-generating programs that can potentially detract from the core academic mission (at least in the public eye - e.g, the 'football school' rep)?</p>

11

<p>JWT:</p>

<p>To me, the reason big time college athletics exist is marketing. The fact is, most flagship universities are "McSchools." They have differentiating factors, but they're hard to tease out for the average applicant. A big time football team is a differentiating factor. They say, "our school is large and worth noting." The Ivies, Chicago, and a few others can and do get away without big time athletics, but the Nebraskas, Oklahomas, etc. would have about the same name recognition as Montana and North Dakota without football.</p>

<p>Using general funds to support sports programs is probably a marketing fact of life for most schools. I don't have to like it to feel that it's necessary.</p>

12

<p>I would prefer the program to be self-supporting. </p>

<p>The schools on the list have really good academic reputations (despite being football powerhouses)...I think they've balanced athletics and academics well.</p>

13

<p>
[quote]
I would prefer the program to be self-supporting.

[/quote]
</p>

<p>So would I, but that's not realistic for most schools.</p>

14

<p>No surprise that Cal isn't up there =P</p>

15

<p>Most college athletes aren't football players - imagine all the D1 track, soccer, baseball, water polo, lacrosse, cricket, dodgeball, or whatever other random sports athletic depts run, that bring in hardly any money but otherwise drain money like crazy. </p>

<p>So even at athletic departments that don't break even, it may be that the football program is actually subsidizing part of what the university would have had to cover. </p>

<p>Alternatively, a lot of schools do take a loss through sports - see, for example, <a href="http://sportsillustrated.cnn.com/2007/writers/frank_deford/01/10/birmingham.southern/index.html%5B/url%5D"&gt;http://sportsillustrated.cnn.com/2007/writers/frank_deford/01/10/birmingham.southern/index.html&lt;/a&gt;&lt;/p>

16

<p>jbusc:</p>

<p>Thanks for the link. I enjoyed that. I think your words tend to understate the issue when you say, "a lot of schools do take a loss through sports." According to the article you linked, only a handful don't take a loss. So, the term "vast majority" may be appropriate.</p>

<p>Good for Birminghan Southern. Unfortunately, I don't think this would work for many other schools. I wish it would.</p>