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Sports Subsidies Soar

January 19, 2010

Money is harder to come by in virtually all realms of higher education these days, and competition for funds is likely to grow. So at a time when many colleges and universities are freezing salaries and positions and even furloughing employees, it is likely to disturb employees on some campuses that institutional subsidies for sports programs are large and growing.

That analysis is possible thanks to data on sports revenues and expenditures collected and published last week by USA Today. The newspaper asked universities that play football in the Football Bowl Subdivision, the National Collegiate Athletic Association's top competitive level (formerly Division I-A), for four years' worth of the financial disclosure forms they provided to the association as part of its regular survey of sports finances. The NCAA's own report on the data provides information only in the aggregate, but by publishing the data for virtually all public universities that play big-time football -- most private institutions and a handful of publics declined to make their forms public (see below) -- USA Today has made it possible to look at the situations at individual sports programs.

While the picture looks different depending on the institution, a few broad patterns are evident and worth highlighting:

  • The vast majority of sports programs -- even those that purport to support themselves -- receive significant financial backing from their institutions to operate. Of the 99 institutions in the table below, all but four -- Louisiana State, Ohio State, and Purdue Universities, and the University of Nebraska at Lincoln -- reported receiving at least some revenues in the 2007-8 fiscal year from one of four categories of "allocated" revenues: student fees, direct state or government support, direct institutional support (general fund money), or indirect institutional support (facilities, energy costs, etc.).
  • While 65, or two-thirds, of the sports programs reported having more operating revenues than operating expenses in 2007-8 -- meaning that they appeared to turn a profit -- just a quarter showed net profit after excluding the subsidy totals.
  • 44 of the 99 sports programs derived at least a third of their operating revenues from student fees, institutional support or other allocated sources -- and 27 derived at least half of their revenues that way. Among the highest: Eastern Michigan, Florida Atlantic, Florida International, Kent State, Miami (Ohio), Middle Tennessee, Ohio, Western Kentucky and Western Michigan Universities, the State University of New York at Buffalo, and the University of Akron drew at least two-thirds of their operating revenues from allocated rather than generated sources (ticket sales, fund raising dollars, television and other deals, etc.).

A few caveats warrant mention.

First, there is legitimate debate in college sports about whether it is reasonable or appropriate to demand that sports programs be self-supporting. Defenders of such subsidies often note that Ivy League and Division III colleges, whose sports programs are generally seen as being part of their institutions' broader educational missions, make no apologies about providing most of the financial backing for those programs, as they would for arts or music or other programs. The more that big-time sports programs are required or pushed to be financially self-supporting, some supporters of the programs argue, the more pressure they may feel to commercialize themselves.

Second, some of the "allocated" revenues that count in this analysis as "subsidies" can be seen as revenue that the sports programs would otherwise be generating on their own. The prime example of this is student fees, which many sports programs receive in exchange for providing free or discounted tickets to students -- tickets that, in some cases at least, they would otherwise be able to sell and produce revenue.

Still, the spiraling costs of college sports programs, and the sometimes surprisingly large and growing share of those costs that are covered with institutional or state dollars, have become a matter of concern on several campuses, and are almost certain to draw attention on others as higher education's fiscal crisis expands. The faculty at the University of California at Berkeley voted in November to require the sports program there to wean itself off millions of dollars in annual subsidies that had led to a $31 million cumulative deficit that university leaders forgave in 2007. The extent of the deficits became known only because of faculty digging into past sports budgets.

The issue of sports spending has already appeared on the radar screen at the University of Cincinnati, too, where a universitywide panel concluded that the university's current sports budget (which runs an annual deficit of $3.5 million) was insufficient for it to compete successfully in the Big East Conference, which it joined recently. To fully compete, the panel said, could require as much as $11 million more spending a year.

While the panel said it was essential for the athletics department to stop running an annual deficit, several of its ideas for doing so -- including raising student fees and having the university absorb some or all of the department's $24 million cumulative structural deficit -- would require a bigger commitment of institutional funds, at a time when Ohio's public universities, like many around the country, are facing more budget turmoil, not less.

"This has generated a lot of discussion about athletics vs. academics," acknowledged Sandra Degen, Cincinnati's vice president for research and a co-chair of the panel.

Like most public universities in California, San Diego State University has seen its state support cut sharply in recent years, and, promises from Gov. Arnold Schwarzenegger notwithstanding, more reductions are possible. Yet San Diego State has seen its subsidies for athletics rise from $11 million to $16 million in three years. A spokesman said in an e-mail message that allocations from the university's general fund had remained flat, and attributed the increase to a student fee increase designed to add women's lacrosse and keep the institution in compliance with statewide gender equity guidelines. "SDSU’s athletic budget allocations from the university’s general fund have actually remained flat," said the spokesman, Greg Hand.

The reports that the university submitted to the NCAA, replicated in USA Today's database, indeed show San Diego State's student fee allocations to athletics rising from $5.3 million in 2004-5 to $6.3 million in 2007-8. But the reports also show "direct institutional support" to athletics nearly doubling, from $5.3 million in 2004-5 to $10.1 million in 2007-8.

"We are well aware of the fact the increasing general fund allocations to athletics cannot be an option given California finances," Edith J. Benkov, director of French and Francophone studies and chair of the San Diego State University Senate, wrote in an e-mail message.

In addition to virtually all of the private institutions that compete in the Football Bowl Subdivision -- including universities like Duke, Notre Dame, Stanford and others -- several public institutions declined to provide their NCAA financial forms to USA Today. They include the three state-related institutions in Pennsylvania -- Pennsylvania State and Temple Universities and the University of Pittsburgh -- and the U.S. Naval Academy.

More up-to-date financial data on the institutional subsidies to sports programs could be available soon, as NCAA members were required to submit their 2008-9 financial reports to the NCAA last week.

Big-Time Sports Programs and Institutional Subsidies

  Total Subsidy, 2005 Total Subsidy, 2008 Total
Operating
Revenue,
2008
Subsidy as % of
Operating
Budget
Total Operating
Expenses,
2008
Profit/loss, pre-subsidy Profit/loss, counting subsidy
Arizona State U. $10,195,482 $11,678,755 $54,833,180 21.30% $54,296,002 $537,178 -$11,141,577
Arkansas State U. 3,084,406 3,329,116 8,392,852 39.67% 10,388,098 -1,995,246 -5,324,362
Auburn U. 982,349 5,195,136 89,311,824 5.82% 69,841,200 19,470,624 14,275,488
Ball State 10,513,606 10,042,675 22,125,129 45.39% 19,441,780 2,683,349 -7,359,326
Boise State U. 6,466,612 9,149,761 25,578,051 35.77% 25,607,867 -29,816 -9,179,577
Bowling Green State U. 11,055,482 10,971,257 19,387,291 56.59% 17,789,360 1,597,931 -9,373,326
California State U. at Fresno 5,354,106 6,432,445 27,530,567 23.36% 28,856,248 -1,325,681 -7,758,126
Central Michigan U. 11,841,935 13,824,715 21,103,460 65.51% 21,636,204 -532,744 -14,357,459
Clemson U. 1,639,758 3,936,484 59,180,652 6.65% 60,050,712 -870,060 -4,806,544
Colorado State U. 6,329,144 9,894,238 23,759,185 41.64% 23,953,191 -194,006 -10,088,244
East Carolina U. 9,839,851 12,056,711 29,268,128 41.19% 27,625,195 1,642,933 -10,413,778
Eastern Michigan U. 17,135,653 21,396,376 24,971,850 85.68% 25,153,393 -181,543 -21,577,919
Florida Atlantic U. 11,453,831 11,081,707 16,574,905 66.86% 16,275,735 299,170 -10,782,537
Florida International U. 12,131,586 15,691,580 20,230,654 77.56% 18,475,489 1,755,165 -13,936,415
Florida State U. 4,796,773 6,590,629 73,458,494 8.97% 65,583,105 7,875,389 1,284,760
Georgia Institute of Technology 2,534,562 4,855,809 54,511,968 8.91% 54,800,099 -288,131 -5,143,940
Indiana U. 1,700,460 1,426,911 57,155,333 2.50% 50,920,826 6,234,507 4,807,596
Iowa State U. 3,765,158 4,051,768 38,621,346 10.49% 38,642,012 -20,666 -4,072,434
Kansas State U. 2,949,040 3,189,559 49,113,706 6.49% 41,362,747 7,750,959 4,561,400
Kent State U. 12,373,580 13,384,016 18,106,791 73.92% 18,891,134 -784,343 -14,168,359
Louisiana State U. 0 0 85,018,205 0.00% 81,150,829 3,867,376 3,867,376
Louisiana Tech U. 4,816,297 8,114,039 14,656,982 55.36% 14,631,914 25,068 -8,088,971
Marshall U. 6,974,362 9,204,910 23,103,224 39.84% 23,575,610 -472,386 -9,677,296
Miami U. (Ohio) 14,462,096 16,665,051 23,307,295 71.50% 23,320,946 -13,651 -16,678,702
Michigan State U. 3,154,288 3,536,893 81,390,686 4.35% 83,444,368 -2,053,682 -5,590,575
Middle Tennessee State U. 11,386,377 14,737,696 19,656,265 74.98% 19,656,265 0 -14,737,696
Mississippi State U. 3,588,585 4,710,861 30,440,090 15.48% 30,432,972 7,118 -4,703,743
New Mexico State U. 8,074,837 16,103,229 25,379,586 63.45% 28,298,002 -2,918,416 -19,021,645
North Carolina State U. 2,398,416 3,380,687 45,632,223 7.41% 43,892,285 1,739,938 -1,640,749
Northern Illinois U. 10,634,413 15,435,450 23,342,006 66.13% 22,448,970 893,036 -14,542,414
Ohio U. 10,713,478 14,591,522 19,450,560 75.02% 20,297,059 -846,499 -15,438,021
Ohio State U. 5,429 0 115,737,022 0.00% 114,264,848 1,472,174 1,472,174
Oklahoma State U. 4,174,287 4,644,017 98,874,092 4.70% 89,801,118 9,072,974 4,428,957
Oregon State U. 6,567,352 10,199,008 52,875,339 19.29% 52,128,314 747,025 -9,451,983
Purdue U. 677,093 0 64,253,784 0.00% 59,217,169 5,036,615 5,036,615
Rutgers U. 19,881,954 22,237,281 52,012,491 42.75% 51,748,813 263,678 -21,973,603
San Diego State U. 11,161,382 16,874,292 32,118,251 52.54% 31,405,858 712,393 -16,161,899
San Jose State U. 9,179,715 11,931,024 18,816,240 63.41% 17,386,449 1,429,791 -10,501,233
State U. of New York at Buffalo 14,397,205 17,001,122 21,859,641.00 77.77% 21,854,374 5,267 -16,995,855
Texas A&M U. 839,348 3,264,000 92,476,146 3.53% 77,426,317 15,049,829 11,785,829
Texas Tech U. 5,185,154 5,881,749 52,599,785 11.18% 51,275,866 1,323,919 -4,557,830
Troy U. 6,593,246 9,139,826 14,327,947 63.79% 14,327,947 0 -9,139,826
U.S. Air Force Academy 8,417,045 16,579,598 30,604,249 54.17% 31,174,646 -570,397 -17,149,995
U.S. Military Academy 7,664,306 10,484,048 29,398,220 35.66% 24,888,651 4,509,569 -5,974,479
U. of Akron 10,272,310 13,813,933 18,711,948 73.82% 18,858,092 -146,144 -13,960,077
U. of Alabama 2,550,605 9,457,262 123,769,841 7.64% 123,370,004 399,837 -9,057,425
U. of Alabama at Birmingham 9,106,614 12,399,602 22,430,831 55.28% 21,509,018 921,813 -11,477,789
U. of Arizona 4,206,016 5,469,311 49,241,506 11.11% 46,211,393 3,030,113 -2,439,198
U. of Arkansas at Fayetteville 1,429,833 1,518,452 66,174,916 2.29% 64,632,499 1,542,417 23,965
U. of California at Berkeley 5,184,678 7,451,464 64,333,065 11.58% 64,282,315 50,750 -7,400,714
U. of California at Los Angeles 2,535,330 2,856,743 66,088,264 4.32% 66,088,264 0 -2,856,743
U. of Central Florida 13,756,337 18,676,064 39,715,730 47.02% 38,825,507 890,223 -17,785,841
U. of Cincinnati 5,642,852 10,699,504 32,281,546 33.14% 36,369,715 -4,088,169 -14,787,673
U. of Colorado at Boulder 3,162,568 7,836,559 52,631,896 14.89% 48,368,255 4,263,641 -3,572,918
U. of Connecticut 9,526,832 11,185,218 55,218,003 20.26% 55,025,374 192,629 -10,992,589
U. of Florida 3,753,327 4,431,187 106,607,895 4.16% 98,775,583 7,832,312 3,401,125
U. of Georgia 3,028,878 3,073,606 85,554,395 3.59% 71,993,533 13,560,862 10,487,256
U. of Hawaii 1,862,355 9,822,971 37,427,263 26.25% 35,133,798 2,293,465 -7,529,506
U. of Houston 12,437,318 17,547,745 30,988,450 56.63% 30,988,450 0 -17,547,745
U. of Idaho 6,638,118 7,673,036 15,208,208 50.45% 15,610,442 -402,234 -8,075,270
U. of Illinois 4,708,707 4,202,696 67,818,403 6.20% 63,458,807 4,359,596 156,900
U. of Iowa 3,632,198 2,287,795 81,515,865 2.81% 71,602,594 9,913,271 7,625,476
U. of Kansas 3,186,282 3,893,956 82,976,047 4.69% 65,748,366 17,227,681 13,333,725
U. of Kentucky 639,686 568,996 71,727,243 0.79% 71,079,982 647,261 78,265
U. of Louisiana Lafayette 3,232,589 6,066,824 11,499,015 52.76% 11,026,554 472,461 -5,594,363
U. of Louisiana Monroe 2,915,857 4,181,610 9,030,596 46.30% 9,242,021 -211,425 -4,393,035
U. of Louisville 4,685,393 8,408,683 56,540,896 14.87% 55,145,760 1,395,136 -7,013,547
U. of Maryland at College Park 7,500,191 11,299,546 59,624,100 18.95% 56,844,987 2,779,113 -8,520,433
U. of Memphis 4,657,928 10,161,144 34,379,023 29.56% 34,379,023 0 -10,161,144
U. of Michigan 0 58,817 99,027,105 0.06% 85,496,004 13,531,101 13,472,284
U. of Minnesota 9,039,997 9,410,450 68,951,691 13.65% 63,968,805 4,982,886 -4,427,564
U. of Mississippi 2,470,885 3,224,929 34,769,709 9.28% 34,769,709 0 -3,224,929
U. of Missouri at Columbia
2,804,250
2,657,770
55,566,932
-5.22%
51,779,677
3,787,255
1,129,485
U. of Nebraska at Lincoln 0 0 75,492,884 0.00% 74,981,110 511,774 511,774
U. of Nevada at Reno 8,122,873 9,479,118 24,383,923.00 38.87% 24,051,345 332,578 -9,146,540
U. of Nevada at Las Vegas 9,596,488 19,044,324 38,377,947 49.62% 37,934,266 443,681 -18,600,643
U. of New Mexico 8,107,987 12,010,006 35,979,959 33.38% 36,477,159 -497,200 -12,507,206
U. of North Carolina at Chapel Hill 5,515,513 8,051,919 66,148,186 12.17% 65,929,532 218,654 -7,833,265
U. of North Texas 4,315,679 4,691,283 10,243,090 45.80% 16,449,462 -6,206,372 -10,897,655
U. of Oklahoma 150,000 150,000 77,098,008 0.19% 76,945,882 152,126 2,126
U. of Oregon 1,369,845 1,168,411 56,623,901 2.06% 56,259,942 363,959 -804,452
U. of South Carolina 854,387 1,987,931 66,545,953 2.99% 64,516,437 2,029,516 41,585
U. of South Florida 10,276,888 12,821,262 34,935,813 36.70% 32,809,603 2,126,210 -10,695,052
U. of Southern Mississippi 7,466,994 6,913,343 18,712,687 36.94% 18,671,620 41,067 -6,872,276
U. of Tennessee 7,546,536 13,382,629 101,806,196 13.15% 100,507,146 1,299,050 -12,083,579
U. of Texas at Austin 3,027,310 1,832,229 120,288,370 1.52% 110,996,365 9,292,005 7,459,776
U. of Texas at El Paso 10,759,894 11,375,111 25,269,243.00 45.02% 25,707,421 -438,178 -11,813,289
U. of Toledo 10,542,525 10,550,952 19,082,009 55.29% 17,811,494 1,270,515 -9,280,437
U. of Utah 6,002,786 7,112,517 27,447,140 25.91% 27,928,663 -481,523 -7,594,040
U. of Virginia 7,973,032 11,119,358 64,396,612 17.27% 65,838,543 -1,441,931 -12,561,289
U. of
Washington
1,460,173 1,849,894 60,729,016 3.05% 57,330,671 3,398,345 1,548,451    
U. of Wisconsin
at Madison
5,454,018 5,262,870 95,118,124 5.53% 93,008,125 2,109,999 -3,152,871    
U. of Wyoming 10,638,025 13,233,339 24,547,609 53.91% 24,876,915 -329,306 -13,562,645
Utah State U. 6,137,955 7,813,467 13,496,893 57.89% 14,595,321 -1,098,428 -8,911,895
Virginia Tech U. 6,165,427 6,529,417 64,412,343 10.14% 59,157,745 5,254,598 -1,274,819
Washington State U. 7,563,143 9,090,504 39,621,060 22.94% 36,495,847 3,125,213 -5,965,291
West Virginia U. 2,780,626 3,652,315 54,262,716 6.73% 49,052,709 5,210,007 1,557,692
Western Kentucky U. 10,047,994 13,704,025 19,957,909 68.66% 19,957,909 0 -13,704,025
Western Michigan U. 14,201,835 15,478,356 21,990,723 70.39% 21,635,009 355,714 -15,122,642
Totals $627,735,906 $831,536,404 $4,657,324,391   $4,458,150,759 $199,173,632 -$632,362,772

Source: USA Today survey of NCAA reports

 

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