July 27 – August 1, 2009: Six Part Series: College Sports and Money

The Orlando Sentinel investigated the finances of major-college sports with a six-part series:

Monday, July 27, 2009: Recession is changing face of athletics. A 2008 NCAA study showed the average net operating deficit among FBS schools was $8.9 million in 2006, a figure that rose 25 percent in two years. The article noted the significant increase in salaries of football and basketball head coaches and their assistants, despite the economic recession and decreased money generated through external support (donations, booster clubs, ticket sales, licensing, merchandising, broadcast rights and conference revenue sharing). In addition, at most colleges, athletics are subsidized with money from the universities and student fees: for example, 46 percent of the University of Central Florida’s $35.5 million athletic department budget is derived from student fees.

Tuesday, July 28, 2009: Who is footing the bill for sports?. The University of Central Florida’s (UCF) athletic budget is $35.5 million, with $16.2 provided by student fees. Part of the expense is a new football campus on stadium, of which UCF President John HItt stated, “it has really boosted a sense of community and cohesion.” The paper asks, “how much longer can athletic departments count on the same level of subsidies?” Knight Commission on Intercollegiate Athletics co-chair, William “Brit” Kirwan, stated: “I know most universities across the country are struggling to make ends meet. So I think in this fiscal environment if there ever was a time when we could make some major change in the financial models, I think it’s now.” At UCF, in-state undergraduates pay $12.68 per credit hour to fund athletics; at Florida International University, the cost is $14.21; and, at the University of Florida, students pay $1.90 per credit hour. The average Division I-Football Bowl Subdivision athletic department received 26 percent of its total revenue from subsidies, up from 19 percent in 2004. Data indicate that the gap between college sports’ “haves” and “have-nots” is growing. Schools that don’t fill 90,000- to 100,000-seat football stadiums on autumn Saturdays and don’t play in conferences that receive automatic bids to Bowl Championship Series games are at a particular disadvantage.

Wednesday, July 29, 2009: Cash starts at the top in NCAA. The difference in revenues between the haves and have-nots in major college athletics is most easily demonstrated by the scheduling of football games. Those who control the home games control the television inventory. Those who control the television inventory control the cash. Those who control the cash AND the home games are most likely to control who wins and loses the games. In practice, the schools who are members of the six conferences (Atlantic Coast Conference, Big East, Big Ten, Big 12, Pac-10 and Southeastern Conference), whose football champions receive an automatic bid to the Bowl Championship Series (BCS)– are the institutions that are most likely to pay significant ain pull mounts of money to invite non-BCS schools to earn victories. With the poor economic climate, the have-nots may be more tempted to seek big payouts for tough road games against BCS schools. “You have to really think about how much injuries and team morale can be hurt by playing too many of those games for money,” said Eastern Michigan University athletic director Derrick Gragg.

Thursday, July 30, 2009: Coaches still lining up for rising pay. The University of Alabama will spend $6.5 million this season to head football caoch Nick Saban and his assistants. If the Crimson Tide reach the Southeastern Conference championship and a bowl game, the school will be paying its coaching staff at least $464,285 per game, more than 32 Football Bowl Subdivision programs spent on their entire teams in 2007-08. “We have really gotten ourselves into a situation where we’re paying crazy amounts of money to people for coaching games and sports,” Stanford University athletic director Bob Bowlsby said.

Friday, July 31, 2009: Money an issue in pull for college football playoff. The Sentinel looked at the argument of a college football playoff through the current financial conference revenue-sharing structure, through which the current BCS conferences are currently able to dictate and reap the benefits from the financial terms at the cost of non-BCS instituitons. “Conferences have to ask themselves if the hundreds of millions they share 12 ways should be shared 120 ways,” said Steve Hogan, chief executive officer of Florida Citrus Sports. “Most have trouble with that scenario.” A study by Brigham Young University assistant economics professor Richard W. Evans found the BCS conference automatic qualifiers have taken at least 93 percent of the overall bowl revenue in seven of the last 11 years in the BCS era, earning $1.87 billion in bowl money since 1998. Non-BCS conference members have earned a combined $196.4 million during that span, less than last year’s total alone of $218.85 million for the BCS automatic qualifiers. And, because home football games account for nearly 24 percent of the revenue of major college athletic programs, BCS conferences are not eager to risk their scheduling muscle or the possibility that a playoff system results in lost luster for the regular season.

Saturday, August 1, 2009: Colleges look to create revenue as slashed budgets don’t cut it. In an effort to save money, schools around the country have eliminated athletic media guides, cut travel costs, reduced office supplies, tightened recruiting budgets. But the actions have not created money. So, new marketing ideas have led to enhanced revenues for a few major college athletic programs. The Chick-fil-A Kickoff Game on September 5 will feature a football contest between the University of Alabama vs. Virginia Polytechnic Institute and State University (Virginia Tech). The commercial sponsorship for naming a regular season game is yet another example of college athletic departments seeking new ways to generate revenue to support growing expenses. The University of Georgia recently signed an 8-year, $92.8 million contract with International Sports Properties, a marketing company that will own the rights to Georgia’s stadium signage, Internet properties, radio network and coaches’ shows. “Intercollegiate athletics has started down a very slippery slope on commercialization and I think it’s going to be harder and harder to make the claim that this is amateur athletics,” William Kirwan said. “You now have the lawsuits on use of student likenesses with the video games. We’ve got billboards up wherever there’s a blank spot on the wall.” In 2008, for the 25 Division I-A schools whose athletic departments didn’t lose money, the average profit was $4 million, Fulks said. The average loss among the remaining schools was $10 million, and the worst 10 percent lost between $18 million and $30 million.