Universities across the country spend thousands, if not millions, of dollars funding athletic departments, keeping facilities up-to-date, and paying coaches. Yet, how many of these universities are in the “red” after the NCAA releases its financial reports? Factors that could cause these universities to be in the red for certain years are facility upgrades, coaching changes, and decrease in ticket sales. How do schools recuperate from these financial downfalls?What can be done to guarantee that it doesn’t happen in the future? Researcher Jim Moran stated that only 20 publicly funded universities in the United States make a profit. Moran also found that the highest paid employee in 48 of the states are either a college football or basketball coach.1 Perhaps the cost of athletics is out of control - you make the call.
Rutgers University is a prime example of a university that continues to pour money into its athletic programs and report a budget deficit. It’s been nearly eight years since the university embarked upon a massive upgrade to it’s football field. A football stadium that cost $102 million to do nothing.1 The former athletic director, what is his/her name? Insert here, at the time preached the stadium renovations would help a dying program become self-sufficient again. However, nine years later and nothing has changed. In fact, the school continues to report a deficit for athletics at around $32 million.2 Athletic directors at these schools defend their spending by stating the money is spent to keep up with other universities. Of these schools that are losing money the median loss was $11.4 million.1
On the opposite side of the struggling school spectrum are powerhouses like Alabama, The University of Texas and The University of Oklahoma. These universities belong to the “Power Five” conferences and are known to be the wealthiest conferences in the NCAA. These programs have benefited from skyrocketing television contracts, booming endorsements, and big spending donors willing to spend the dough. “However many smaller departments in these conferences are also losing more money than ever, as athletic directors choose to outspend rising income to compete in an arms race. These are costing some of the nation’s publicly funded universities and students millions of dollars. On the contrary rich departments such as Auburn have built lavish facilities, invented dozens of new administrative positions and bought new jets all at the university's expense. However failure to profit is not inevitable for athletic departments in the “Power Five” conferences, which includes 48 public universities.” Of the universities that made a profit the median gain was $8.4 million.1
A vast majority of the 4,000 plus universities and colleges in the United States have athletic departments that are losing money. Most of these schools are NAIA or NCAA Division II or III, so their football and basketball programs (two main sports) don’t appear on live national TV. These same schools don’t have athletic apparel companies running to them for endorsements and they don’t come close to generating millions from ticket sales.2 In fact, most count on the free admissions tickets to show up to fill the stands. According to the NCAA, only 24 university athletic departments actually turned in a profit at the end of each year.3
We all know college sports is a big business, but unfortunately it doesn’t seem to matter whether they are making a profit or not. People pay crazy amounts of money to watch these events and as long as it’s the “big” thing to watch athletic departments will continue to fight and move forward in the red or not.
1Madsen, N. (2014). Jim Moran says only 20 colleges make a profit from sports.
Retrieved from
2Hobson, W., Rich, S. (2015). Playing in the Red. The Washington Post. Retrieved from
http://www.washingtonpost.com/sf/sports/wp/2015/11/23/running-up-the-bills/?utm_term=.d835ef5aae45
3Burnsed, Brian. (2015). Athletic Departments that make more than they spend. NCAA. Retrieved from http://www.ncaa.org/about/resources/media-center/news/athletics-departments-make-more-they-spend-still-minority
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