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Rich Get Richer in Athletics

June 16, 2011

The gap between the “haves” and the “have-nots” in big-time college athletics continues to widen.

According to the latest National Collegiate Athletic Association report on Division I revenues and expenditures, released Wednesday, 22 programs in the Football Bowl Subdivision (formerly Division I-A) reported positive net generated revenue in 2010. (This happens when total generated revenue, excluding allocated revenue such as student fees and other institutional subsidies, exceeds university-paid expenses.) In 2009, just 14 such programs reported positive net generated revenue. NCAA officials estimate that the number of “self-sufficient” athletics programs may continue to increase in the coming years given the numerous multimillion-dollar broadcasting rights contracts that major sports conferences have signed recently.

The median net generated revenue for those FBS programs that reported a surplus was nearly $4.4 million in 2009 but rose to about $7.4 million in 2010. By comparison, the median net deficit for the remaining FBS programs (98 programs lost money in 2010) was nearly $11.3 million in 2009 and increased to around $11.6 million in 2010.

The FBS institution with the largest generated revenue brought in nearly $144 million, whereas the median generated revenue for FBS institutions was about $35.3 million. Daniel L. Fulks, the report's author and director of the accounting program at Transylvania University, writes that this gap “is indicative of the disparity in the FBS.” Another indication is the gap between the FBS institution with the largest total expense, about $130.4 million, and the median total expense for FBS institutions, about $46.7 million.

2010 Median Revenues and Expenses for Division I Institutions

  Football Bowl Subdivision Football Championship Subdivision Division I -- No Football
Generated Revenues $35,336,000 $3,289,000 $1,993,000
Total Revenues $48,298,000 $13,189,000 $11,077,000
Total Expenses $46,688,000 $13,091,000 $11,562,000
Net Generated Revenue -$9,446,000 -$9,189,000 -$8.597,000

Mark Emmert, the NCAA's president, noted that he was concerned by the disparity shown among FBS programs in this report.

“That gap in revenue, either from self-generated or institutionally allocated sources, is significant,” Emmert said. “Indeed, it is coming to redefine what we mean by competitive equity. This will undoubtedly be a discussion point at the August presidential retreat.” Emmert announced the retreat Monday, saying he would use it as an opportunity to meet with all of the Division I presidents and have them "vet issues affecting the collegiate model of athletics and discuss direction for the division for the coming years."

Most football and men’s basketball teams at FBS institutions continue to have net generated revenue exceeding expenses, with 58 percent of the former and 56 percent of the latter doing so. These percentages have remained relatively stable for the past seven years. Only one FBS institution had a women’s basketball team generate revenue in 2010. Institutions rely on revenue-generating teams to help pay for the operation of their other teams.

Ticket sales and donations constitute the largest sources of the total revenue for FBS institutions, with 23 percent coming from the former and 21 percent coming from the latter. Still, 20 percent of total revenue for FBS institutions is from direct and indirect institutional support, student fees and direct government support. Many critics of big-time athletics argue this type of institutional subsidy of athletics should be decreased.

Still, Fulks writes that “the efforts to control athletics costs are frustrated by a lack of control over the largest two expense lines.” Salaries and benefits of coaches and officials constitute about 33 percent of total expenses in the FBS, and athletics scholarships represent 16 percent. Fulks explains that the latter number "follows the national trend of tuition increases," while the former "appear[s] to be market driven.”

Football coaches still have the highest total compensation in the FBS, with a median of almost $1.4 million for a head coach and a total of nearly $2 million for all assistant coaches. Men’s basketball coaches have the second highest total compensation, with a median of $962,000 for a head coach and a total of $472,000 for all assistant coaches. Women’s basketball coaches came in third, with a median of $348,000 for a head coach and $331,000 for all assistant coaches.

The median expense per athlete remained at around $76,000 for both 2009 and 2010. The average number of participating athletes in a program also remained virtually unchanged.

Information about Other Subdivisions

  • No programs in the Football Championship Subdivision (formerly Division I-AA) or without a football team (formerly Division I-AAA) reported a surplus. The median negative net generated revenue for the FCS was nearly $9.2 million in 2010. The median negative net generated revenue for those Division I programs without a football team was almost $8.6 million. Both of these subdivisions saw losses increases in this figure from 2009.
  • Only 4 percent of FCS football teams, 5 percent of FCS men’s basketball teams and 1 percent of FCS women’s basketball teams reported net generated revenues for 2010. This figure has remained relatively consistent in recent years.
  • Only 5 percent of men’s basketball teams at Division I programs without a football team generated a surplus in 2010. No women’s basketball teams at these institutions generated a surplus.

 

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