Since the thread about sports scholarships has kind of morphed into a discussion about Title IX and the efficacy of dropping football, I thought I would put up some data on that topic to see if we can move that discussion to a thread dedicated to the purpose.
This is a report on revenues and expenses in D1 from 2004-2016.
https://www.ncaa.org/sites/default/files/2017RES_D1-RevExp_Entire_2017_Final_20180123.pdf
A simple perusal of that data shows that like it or not, without the money generated by football college sports would look vastly different than it does today at most schools. Among the autonomous schools (the Power 5 conferences), average revenue (after expenses) from football is 19 million a year. Men’s basketball in those conferences generates 2.8 million a year after expenses. In the FBS Group of 5 schools, only a handful of schools admit to making money, and most lose a huge amount (average of 1.5 mil a year). Still, the revenue generated before expenses by Group of 5 football is roughly double what is generated by all other combined sports at those schools. Among FCS schools, football seems to generate about 40% of revenue before expenses, and loses about as much after expenses as the average baseball team. Women’s basketball, and every other sponsored sport ni Division 1, loses money.
Another interesting point is that all levels in Division 1, men’s sports are tagged with expenses that are 200-400% higher than expenses allocated to women’s sports. Assumedly much of this has to do with the expenses of running a stadium/weight room/training staff.
guessing there’s a financial difference between schools. For example Duke basketball is leagues better than their football team. I’m sure the ACC requires all schools to have football, but I would bet strictly from a net $ perspective Duke would be better off without football and chopping 85 female scholarships and a bunch of money losing sports off their payroll. D1 athletics are very complicated and the “arms” race seems to not benefit typical students that much IMHO. When maryland moved to the big 10 (big 12 now?) that had to stink for their olympic sport athletes that have insane travel now. Anyway the whole D1 athletics at Universities thing doesn’t make a lot of sense to me so I’m biased. I get the body mind aspect of students that get exercise and play sports but not so much the spectator part of it being important for education.
I think there is still some blue smoke and mirrors going on. Football is eating all the costs but are they getting all the revenue too? The parking fees, the merchandise fees? Do the teams that use the stadium for games (soccer, lacrosse) have to ‘rent’ the stadium from the football team?
But however they do it, they make it work and feel sports adds to the university. Does the history department make money or is it just part of the cost of running a university?
academic departments are under pressure to make money or break even; how? the history department (at least at a big public U. I know) gets revenue based on how many unit hours with the HIS prefix they take. STEM prefixes generate more revenue per unit. But yes, at least some big time D1 schools do look at revenue for the academic departments based on student credit hours taking their classes each semester. The boom in adjuncts as teachers at large D1 schools is also a way to have the history department “make money”. So there’s probably more market forces at work in public schools than privates.
Unfortunately public schools also are at the mercy of their legislature. the Dean Dome at UNC holds like 20, 000 people but they can’t rent it out for rock concerts because the state doesn’t want alcohol sold there and most bookers of large venues want to be able to sell booze.
https://www.cbs17.com/news/local-news/new-law-allows-alcohol-sales-at-collegiate-sporting-events-doesn-t-include-on-campus-venues/1269128381
the best argument I’ve heard for D1 sports is the licensing for the logo which is owned by the University not the sport. Also, paying sports teams to wear their logos. So presumably more , better sports makes the logo trademark licensing office more money.
But that’s what I’m saying, @anon. The football team is eating all the costs but may not get all the credit. The History dept may get ‘credit’ for having 200 students registered for ‘HIS’ classes, but is it getting dinged for having half those student on financial aid, for using interlibrary loan more, for a class that is held in the science auditorium? The football budget has to cover the scholarships, the uniforms, the trainers. My daughter got 2 credits for her sport, but I’m not sure her coach got credit for that in her budget (I don’t think the academic depts were ‘charged’ or ‘credited’ at her school).
I think if schools posted a budget like this for academic departments, there wouldn’t be many in the black.
I fully understand Alabama having football or Texas or the top 25 that are profitable with it. I do not understand Bowdoin (or even Duke) having it.
Bowdoin football lost 40% of all athletic department money, not singling out Bowdoin, I just think for a lot of schools having a football team financially doesn’t make sense.
In Top 20 D1, football and men’s basketball subsidize the other sports that is clear. I do get alabama football is hugely profitable. UC Berkeley’s athletic department ran up $400 million in debt mostly for football.
https://www.californiagoldenblogs.com/2017/1/5/14172010/california-golden-bears-athletics-debt-service-finances-revenue
https://www.dailycal.org/2018/01/17/central-campus-take-chunk-cal-athletics-debt/
I think you both make some good points, although I disagree with @anon145 on the relative revenue generated by Duke football v basketball. I would bet football still generates more, although certainly the disparity is probably closer at places like Duke, UNC or Syracuse than anywhere else in the P5. You have to remember that a large chunk of revenue comes from conference tv deals, and to date, football deals have made a lot more money. The ACC did just sign a combined deal for both football and basketball in 2018, so now the revenue streams may even out a bit. But up until that point, the scale was just different.
Which kind of leads to the larger point I was trying to illustrate. Right now, at least in D1, athletic departments are built around football. It has to be that way because football bends the curve on participatants, expenses, interest and revenue. You can stop a program certainly, and maybe you should for a lot of reasons. But if you do, then it is more than a simple matter of cutting or redistributing scholarships. It would require a whole different way of running the athletic department at most places.
One other point to consider is separating revenue from profit. In most economics discussions the focus is on making money, and profit measures how well an entity is doing. In collegiate athletics they aren’t out to make a profit or even cover expenses, just offer a service to students and alums. But increasing revenue allows them to spend more while perhaps only losing a little more than a much smaller program. That is, if my school only wants to spend $4m on athletics but the mediocre FB team can sell five or six dates of 40-50K seats I can spend all the FB money plus the $4m. Without FB my biggest revenue source might be basketball with 12 dates of 9k seats which lowers both the cost (85 fewer scholarships) but also the base budget of the program by 150k tickets.
^ yeah, that was what I was trying to get at in my completely clueless about accounting/finance kind of way.
^^ I think you still need to consider net cash generated (which may be very different than “profits”). If in order to generate the 6 x 50k revenues you need to spend $500k, then $200k will need to come out of the $4mm. What you have is a football program and $3.8mm to spend on other sports vs $4mm to spend on other sports. That may still be a desired outcome for the school for many reasons, but in that simple situation, FB is not subsidizing the athletic department, but is a competitor for the $4mm the school is willing to spend on sports.
The reality though is that FB generates much more than direct revenue from tickets and its share of any TV deals. A bunch of those have been listed above. What has not been listed is that it is a huge platform for alumni fund raising. As an alum (and fundraiser) for a far from football powerhouse, the Game, (along with reunions) are a big focal point for fundraising efforts. I would assume most college are rational actors when assessing the economic cost/benefits of their FB programs. What will be interesting to see is if they will begin to take into greater consideration the health risks to the student athletes as we find out more about brain related injuries and other health risks directly related to FB.